Four of the five largest wheat exporting nations agreed at a one-day agricultural summit this week that there is no need for joint action to set prices for the wheat they sell to the rest of the world.
A communique from the meeting Thursday in Saskatoon, Canada, noted "recent improvements" in wheat prices, and declared that "there was no need to vary their national marketing policies," a statement indicating opposition to the establishment of an exporters' cartel.
"A wheat cartel makes no sense, economically or politically," Secretary of Agriculture Bob Bergland said at a press conference yesterday. "If we attempted it we'd have no way of enforcing it."
Although formation of a cartel was not on the agenda of the Saskatchewan meeting the administration recently has been under pressure from farm state legislators to consider an international scheme for putting a floor under world wheat prices.
At the same time, grass-roots sentiment in favor of pegging wheat prices to foreign oil prices has been on the rise. Bumper stickers demanding "a bushel of grain for a barrel of oil" have become popular in the midwest.
Bergland made clear yesterday that the administration opposes any artificial pricing policy, and he hinted that farm state senators who have been pushing for joint international action may be politically motivated.
"Some of their constituents are after $5 (a bushel) wheat no matter how they get it," Bergland said:
"We don't think $18 wheat will sell. [Other countries] will grow more, or they'll grow rice. It makes a good song and a slogan." The current spot price of what in Minneapolis is around $3.60 a bushel.
Attending the Saskatchewan summit, in addition to Bergland, were representatives of Australia, Canada and Argentina. France, the world's fourth largest wheat exporter, did not send a representative.
The communique indicated that little substantive progress had been made. The officials agreed that the major exporters should meet twice a year "to ensure greater coordination of decisions relating to the production and marketing of wheat."
There will be a follow-up meeting in June to discuss establishment of an emergency world wheat reserve. The U.S. government has submitted a bill to Congress to give the Commodity Credit Corp. authority to acquire up to four million tons of wheat for such a reserve in case of famines.
Unsold stocks of wheat in the major producing countries are estimated to be around 47 million tons. This is only about one million tons more than was on hand in 1971, prior to the poor harvests and record Soviet grain buying that seriously depleted world stocks.
Foreign wheat buying particularly by China, has been brisk recently and preliminary estimates for the coming food grain harvest is that it may be below that of the previous two years. As wheat exports increase and local stocks decline, prices tend to rise. Administration officials believe that as this happens unrest over low prices in farm country and demands for a wheat cartel will also diminish.