The Klarenbach Report: Ray Somerville

Let me tell you a story about Ray Somerville.

Ray Somerville was an ambitious entrepreneur with his sons creating and operating successful businesses, including grain farming, an auctioneer business, and a commercial trucking company under the Somerville Farms banner.

Ray and his wife Myrtle’s family of four sons and one daughter are well known in West Central Saskatchewan for their businesses, sports activities and their support of their communities.

Ray also played a significant role in western Canadian grain marketing and the growth of the Alberta feedlot industry. Perhaps, you are familiar with the story. If not, I will share my high-level understanding of the storyline.

To begin, we need to become familiar with the Canadian Wheat Board, which was a mandatory producer marketing board for wheat and barley in Alberta, Saskatchewan, Manitoba and a small part of British Columbia

The Wikipedia website states, “It was illegal for any farmer in areas under the CWB’s, jurisdiction to sell their wheat and barley through any other channel than the CWB. Although often called a monopoly, it was actually a monosony since it was the only buyer of wheat and barley. It was a marketing agency acting on behalf of Western Canadian farmers, passing all profits from its operation back to farmers. Its market power over wheat and barley marketing was referred to as the “Single Desk”.

Membership became compulsory in 1941 under the War Measures Act and violaters faced fines and/or incarceration.

The CWB managed the grain marketing system using a quota system with a series of arbitrary payments severely restricted the farmer’s ability to cash-flow their operation.

As a result, farmers like Ray Somerville would explore grain marketing opportunities in other provinces circumventing the CWB, in violation of the Canadian Wheat Board Act.

Ray invested in an Alberta feedlot to feed his own cattle. Often Ray could sell his barley to the Alberta feedlot at levels higher than the expected CWB price.

The CWB Act required Ray to sell his barley to the CWB and buy it back at prices greater than his sale price reducing, often eliminating the arbitrage opportunity between the Saskatchewan and Alberta markets.

Ray considered that CWB Act to discriminate against grain farmers and proceeded to sell his grain to his feedlot to feed his cattle.

Ray would truck tandem loads of barley to Lethbridge during the week while his eldest son, Bryan, still in high school, would take a load on Saturday.

Eventually, Bryan got stopped by the RCMP after seeing the Saskatchewan plates on the grain truck.

The RCMP visited the Somerville farm notifying Ray that he was being charged under the CWB Act. Myrtle was at home and refused to accept the papers, directing the RCMP to the field where Ray was conducting fieldwork.

Ray choose to defend himself against the charges. While the charges were being disputed, Bryan remembers carrying a letter for presentation to the RCMP permitting him to deliver grain.

Ray was successful in winning a Supreme Court of Canada decision opening up the interprovincial trade of feed wheat and barley.

This brought marketing freedom to feed wheat and barley growers, increasing their returns while allowing for the growth of the Alberta cattle and feedlot industry.

The growth of the cattle industry witnessed in southern Alberta’s feedlot alley would not be possible without Ray Somerville’s determination and perseverance in challenging the CWB Act.

Today, I remember to salute Ray in admiration of his tenacity and thank him for bringing marketing freedom to feed wheat and barley growers.

Take a look at this week’s Saskatchewan Feed Barley chart. What would the price be if the provincial border remained closed?

Trent Klarenbach, BSA AgEc, publishes the Klarenbach Grain Report and the Klarenbach Special Crops Report, which can be read at https://www.klarenbach.ca/