Abstract: Going against the Grain: Why Did Wheat Marketing in the United States and Canada Evolve So Differently?

Joseph Santos

Abstract

By the turn of the twentieth century, commodity futures exchanges were an integral part of large-scale commercial grain marketing in North America. However, during the First World War, the U.S. and Canadian governments suspended grain futures trading and assumed complete control of the North American grain trade in order to supply wheat to the Allies at fixed prices. The episode marked a shift toward comprehensive agricultural policies in both countries. By the Second World War, the countries marketed wheat very differently. The United States relied primarily on private commodity futures exchanges; Canada relied on the Canadian Wheat Board, which ultimately required producers to deliver wheat to the Board, eliminating wheat futures trading. I argue that the First World War and changes in the U.S. and Canadian world grain market positions shaped each country's interwar agricultural policies and fashioned, by the Second World War, very different wheat-marketing schemes. Interwar policies reflected the changing domestic and foreign consumption shares of each country's wheat production, as well as wheat production's importance to each country's economy. I focus on five interwar policy events and demonstrate how these events likely shaped U.S. and Canadian grain marketing by the Second World War.

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