He delivered the grain before both companies declared bankruptcy, leaving him short C$165,000 they owed. Now Prybylski has no money to replace his old tractor.

Hundreds of Canadian farmers have received delayed payments for their crops or not been paid at all, as a growing number of grain-buying firms declare bankruptcy amid drought and low commodity prices, according to interviews with dozens of farmers, a government agency, and a review of bankruptcy documents.

Farmers are discovering they are not necessarily protected from the failures, revealing holes in Canada’s farm safety net.

The bankruptcies are adding to farmer troubles in Canada, the world’s top canola and No. 3 wheat producer, while they also brace for tariffs from the United States.

Prybylski, who farms in Willowbrook, Saskatchewan, is relying on a line of credit to cover the shortfall until he harvests the next crop in autumn.

“Where do we cut our expenses? Or how do we get more revenues to do the things we need to do?” Prybylski asked. As planting season approaches, he needs to buy fertilizer, seed and fuel.

Farmers can sell crops to companies that operate storage terminals, merchants and other farmers who fatten livestock. They are generally paid a few weeks after they deliver grain and have long incurred most of their costs, a problem for those who deliver to a buyer that goes broke before paying.

Canadian farmers have some financial protection through the federal government-run Canadian Grain Commission, which regulates crop transactions, oversees grain company failures and at times covers some of what farmers are owed by failed companies. The CGC pays compensation from bonds and other security that licensed companies are required to post.

The CGC managed four company failures in 2024, compared to zero or one most years, and the most since at least 2001, according to government data.

But some unlicensed companies have also failed, suggesting the troubles may be broader.

Farmer Christi Friesen said grain buyer Agfinity tried to delay paying her for three loads of peas, though it ultimately paid the C$75,000 it owed plus interest.

Agfinity declared bankruptcy on November 25.

“I needed to fight,” said Friesen, who farms 5,000 acres (2,023 hectares) of cropland in Alberta’s Peace region. “I kept being a pain in the ass.”

Discovering that some failing companies, such as Agfinity, are unlicensed, has alarmed farmers, as has finding out that some licensed companies are not fully insured.

The situation “has fully exposed that we are not secure,” said southern Saskatchewan farmer Cherilyn Jolly-Nagel.

Companies directly buying crops from farmers must, by law, be licensed with the CGC, with few exceptions. For legal enforcement, the agency must complain to the Public Prosecution Service of Canada, which then decides whether to take action.

The CGC has not made such a complaint in at least seven years, said spokesperson Christianne Hacault.

Other flaws in farmer protections are the CGC’s requirement that farmers report non-payment within 90 days, and licensed firms who fail to post adequate security, farmers say.

The CGC is holding consultations with farmers about its protection system, Hacault said.

“We know there are gaps.”

The federal agriculture minister’s office, which oversees the CGC, did not respond to a request for comment.

Agfinity owner Joseph Billett told Reuters that reduced sales due to smaller crops, farmers’ reluctance to sell at low prices and competition from imports of U.S. corn to feed cattle pushed the company over the edge.

“These three factors made profitability very challenging, and for us, impossible, these past few years,” Billett said.

Dust bowl

Farmers in the western half of Canada’s Prairies have grown stunted crops for four years due to dry conditions. In some places, farmers say they are facing the worst prolonged drought since the 1930s Dust Bowl.

Crop insurance claims between 2021 and 2024 shot up seven-fold compared to the previous four-year period due to drought-damaged crops, according to agencies in Alberta and Saskatchewan.

Numerous small grain companies, brokers and merchants are among Canadian crop buyers, unlike some countries that are dominated by global players.

In the United States, farmers also had low prices to deal with, but their crops had better growing conditions, allowing them to salvage revenue. Some states regulate grain companies so that farmers have protection against non-payment, but the situation varies state-to-state.

In Canada, some companies have avoided bankruptcy, but are still struggling.

Farmer-built North West Terminal in Unity, Saskatchewan, said in September it would stop buying grain at least through July to avoid losses.

In an interview, NWT CEO Jason Skinner said intense competition to buy reduced crops hit his company, though it has avoided bankruptcy.

“We’ve seen some significant headwinds and . . . margins that aren’t covering costs,” Skinner said.

In May, LSM Grain picked up two truckloads of red lentils, worth about C$50,000, from Saskatchewan farmer Kelly Arthurs, but did not pay him. The CGC revoked LSM’s license in July.

The company could not be reached for comment.

Arthurs complained to the CGC within 90 days of delivering his grain and was eventually compensated.

But 17 farmers owed a combined $842,000 by LSM waited too long and will not qualify for compensation, according to a bankruptcy document and the CGC. Prybylski is one of them.

Global Foods and Ingredients also went broke owing Prybylski money in the spring. He submitted his complaint in time to qualify for coverage, but only received 75 per cent of what he was owed because Global had posted insufficient security.

A law firm representing Global Foods did not respond to a request for comment.

Arthurs said he felt so much stress from months of fighting to get paid that he may quit farming.

“It’s time to retire.”

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The company owes $5.067 million to the 181 creditors listed in bankruptcy filings released Nov. 26. Many of the creditors are farmers who sold grain through Agfinity but were never paid. Employees out their last paycheques are also listed in the filing. Listed assets totalled $162,593.

MNP Ltd. has been appointed as the Licensed Insolvency Trustee. Creditors can contact MNP to complete a proof of claim prior to a meeting of creditors scheduled to take place via teleconference on Dec. 16. The meeting is a formality in the bankruptcy process, with the purpose of affirming the trustee’s appointment, appointing inspectors to the bankrupt estate and providing direction to the trustee.

While Agfinity had once operated as a typical grain broker — matching buyers and sellers through broker notes but never handling any money directly aside from their fee — in recent years the company began using grain purchase contracts where they took the payment from the buyer and paid the seller later. In a July blog post, Agfinity’s president Joseph Billett said the newer contracts were necessary to support cash flow due to narrow margins. However, the company was unable to generate enough trade volumes to match costs.

In a draft letter to be sent to creditors provided by Billett, he acknowledged mistakes made over the past year and offered “sincerest apologies for the pain and stress this situation has caused.”

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Agfinity, the Stony Plain, Alta. grain broker that Kitt sold his canola through, laid off employees and started the process of declaring bankruptcy in mid-October, according to former employees. The Agfinity website has switched to maintenance mode, its social media accounts are shuttered and calls go straight to voicemail.

“We were told (on Oct. 18) that they would be filing for bankruptcy that next Monday (Oct. 21) and that as employees we could expect to hear from a trustee who was going to give us paperwork to fill out to ensure we were paid for our last few weeks of work,” said Coco Dougherty, Agfinity’s former vice president of marketing and communications. However, Dougherty and other former staff contacted for this article had not received their final paycheques as of mid-November and were still waiting to be contacted by the bankruptcy trustee.

The company has not yet officially filed for bankruptcy, but “it should be any day now,” said Agfinity president Joseph Billett via email Nov. 19. In a draft letter to be sent to farmers owed money by the company, Billett acknowledged mistakes made over the past year and offered “sincerest apologies for the pain and stress this situation has caused.”

Kitt was out about $20,000 for his heated canola. Christi Friesen, a northern Alberta grain farmer who has been active on social media connecting farmers and shedding light on Agfinity’s non-payment issues said there are many others in the same position.

Graham Letts bought grain through Agfinity on several occasions over the years for his Westlock, Alta. livestock operation and appreciated the ease of the company’s online system. However, he noticed a change in recent years. While Agfinity had once operated as a typical grain broker — matching buyers and sellers through broker notes but never handling any money directly aside from their fee — the company started using new grain purchase contracts where they took the payment from the buyer and paid the seller at a later date. Letts recounted a situation where he bought grain and paid Agfinity the full amount, only to later hear that the farmer who made the delivery was never paid.

In a July blog post, Billett said the grain purchase contracts were necessary to support cash flow due to narrow margins. However, the company was unable to generate enough trade volumes to match costs. At the time Billett acknowledged Agfinity’s late payments and tarnished reputation, while also saying that grain purchase contracts would remain a necessary part of the business as it worked to overcome its financial difficulties.

With Agfinity headed to bankruptcy, it’s uncertain when farmers still owed money will be paid, if ever, especially as the company was never licensed through the Canadian Grain Commission.

Dougherty and two other former employees are working at launching a new brokerage firm, Grain Gateway Canada, but have run into some strangeness online.

Social media accounts and a website claiming to be Grain Gateway Canada briefly sprung up in early November before disappearing. A test version of the Agfinity buyers’ hub website was altered to show a Grain Gateway Canada logo and appeared to link the two companies. There were also reports of phone calls to farmers from people claiming to be with the new company.

Dougherty acknowledged Grain Gateway Canada would likely “wear the scarlet letter” of their past association with Agfinity but was adamant that there was no relationship between the companies. She was unsure why someone would be impersonating her fledgling company or attempting to link it to Agfinity but had documentation to back up Grain Gateway Canada’s independence.

“We feel that somebody is going out of their way to make it look like we’re doing something corrupt … and it’s just so disheartening,” said Dougherty, adding “it’s creating chaos, and panic and mistruths.”

—Updated Nov. 19 to include comments from Agfinity president Joseph Billet, updates throughout.

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“There’s still obviously a demand, but buyers are pretty well covered for the February-March timeframe. That’s a window where a lot of growers are looking to sell before the road bans come in April,” he said.

And that has led prices to soften before the roads do.

Feed barley prices on Agfinity.com ranged from $3.55 per bushel picked up in Mackenzie County to $4.65 picked up in Newell County.

In comparison, Prairie Ag Hotwire listed February feed barley for Alberta at $3.85-$5.01 per bushel delivered. For Saskatchewan the range was $3.41-$4.09 and in Manitoba, $3.94-$4.15.

Agfinity’s February-March feed wheat prices ranged from $4.50 in Mackenzie to $6.20 per bushel picked up in Athabasca County.

For all of Alberta, Prairie Ag Hotwire was $4.60-$6.40 per bushel delivered. Also, the website listed Saskatchewan from $5.09 to $5.75 per bushel and Manitoba was much narrower at $5.10-$5.15.

— Glen Hallick reports for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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Nelson Neumann, a grain trader for Agfinity, said barley supply was tight earlier in the month as buyers rushed to secure their feed before spring road bans, seeding season and poor weather conditions hampered deliveries.

“We saw markets rallying before road bans came into effect,” he said. “Supply was limited.”

Some producers wait until April to bring their grains to market, further tightening supplies.

However, barely prices have corrected off of earlier highs. “We’ve been seeing the markets softening up a bit as bidders are buying less aggressively.”

“I don’t feel like the floor will fall out,” said Neumann. Prices have leveled out from $265 to $270 per tonne delivered in Lethbridge.

As barley supplies continue to tighten, Neumman expects markets to remain consistent in months to come.

High barley prices, trade uncertainty and impending floods may see producers deciding to grow barley over corn and canola, which would improve supply levels.

However, feed wheat markets have softened as well, as buyers have coverage booked into summertime. “There’s lots of supply,” Neumann said.

— Marlo Glass writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market reporting.

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“I would say the buyers have adequate coverage for January, February, even a bit of March. And I would say we maybe have seen the (barley) price soften up a bit,” said Nelson Neumann, grain trader with Agfinity at Stony Plain, Alta.

Over the past week, Agfinity saw the feed barley price in the Lethbridge area weaken to the mid-$250s range, from $260 per tonne last week.

Feed wheat has been steady at $245 in the Lethbridge area and in a $235-$240 per tonne range closer to Calgary. However, Neumann hasn’t seen much movement of feed wheat as of late.

Winter so far has been fairly mild, which has allowed for smooth deliveries to feedlots and has helped to keep a cap on prices. If there was to be an extended period of cold weather, Neumann said, that could push prices higher.

Corn from the U.S. is still making its way into feedlots, according to Neumann. Most of it is from pre-bought contracts, but new purchases are still being made. The price had crept up over the last few weeks, though, as the Canadian dollar rallied.

“(The) corn price went down again a couple of days ago… so it’s an attractive option again. It can put a ceiling on the domestic barley and wheat pricing,” he said.

The feed market should stay stable throughout the next few months. While Neumann has been hearing from producers that there isn’t a lot of barley available, from his experience and from what the feedlots have seen, that isn’t the case.

“From what we’ve been seeing there’s plenty of (grain), especially feed wheat, available for the year,” he said, adding feedlots should be well supplied until this year’s harvest.

— Ashley Robinson writes for MarketsFarm, a division of Glacier FarmMedia specializing in grain and commodity market analysis and reporting.

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“We’ve seen bids in our office on feed barley jump up a decent amount,” said Nelson Neumann, a trader with Edmonton-area grain brokerage Agfinity.

He linked the strength to a combination of end-users looking to secure supplies ahead of the holidays and producers closing their bins in hopes of seeing better prices.

Looking past the Christmas and New Year’s period, Neumann expected movement would pick up. While increased deliveries could weigh on prices, “there will still be stronger pricing come January.”

Barley into Lethbridge was trading at about $260 per bushel in late December, while feed wheat was in the $240-$243 area, according to Neumann.

Corn imports from the U.S. were still displacing some domestic feed grains in rations, but Neumann said corn was looking more expensive, trading at roughly the same price as barley into Lethbridge.

While more wheat may have been downgraded into feed grades this year, some of the borderline grain is making it into the elevator system and getting bumped up to a No. 3 or even 2, said Neumann.

— Phil Franz-Warkentin writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.

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