Markets prefer certainty, and COVID-19 injected a substantial amount of uncertainty. The supply chain was disrupted and continues to struggle while governments have poured money into the economy to maintain stability. Inflation has been a byproduct of this supply chain disruption and government largesse. Costs have gone up, wages have escalated and shipping costs increased. Shortages have spurred price hikes and food has not been spared.
The newly launched What about Wheat? campaign is intended to promote the nutritional benefits of wheat and the positive practices employed by the farmers who grow it. Partners in the value chain-led initiative include Cereals Canada, the Alberta Wheat Commission (AWC), Saskatchewan Wheat Development Commission, Manitoba Crop Alliance, Grain Farmers of Ontario and the Canadian National Millers Association with support from Synthesis Agri-Food Network.
For more than 20 years, Cereals Canada has welcomed farmers from Alberta, Saskatchewan and Manitoba to its Winnipeg headquarters for its annual Combine to Customer program. The exception was 2021 when the COVID-19 pandemic forced its cancellation.
Canadian agriculture is dependent on trade. The productive capacity of the Prairies is many times that of the domestic market within Manitoba, Saskatchewan or Alberta and market access is a huge issue. Federal and provincial governments as well as various grower and industry groups continuously push for Canada’s fair treatment in global trade. The hardship necessary to secure transparent and reliable offshore market access has been a continual frustration even in the post-World Trade Organization era. A common lament is there is not enough domestic industry and the various levels of government should do more to promote investment to create opportunities. Herein lies the irony that free trade and market access do not exist within Canada.
The drought of 2021 affected crops across the Canadian Prairies and the Great Plains of the U.S. This significantly impacted crop yield and quality in the major barley producing provinces in Western Canada and the states of North Dakota, Idaho and Montana. To add insult to injury, many farms finally received precipitation in the middle of harvest. The hot, dry growing season produced very high protein content while the late moisture triggered significant pre-harvest sprouting.
The 2020/21 crop year was good for Canada’s barley industry. According to Statistics Canada, production hit 10.74 million tonnes, the highest level since 2008 when tonnage topped 11.78 million tonnes. The 2020/21 crop is also up 50 per cent from 7.11 million tonnes in 2014, a year that saw the lowest barley production in Canada since 1967.
“The battlefield is a scene of constant chaos. The winner will be the one who controls that chaos, both his own and the enemies.” —Napoleon Bonaparte
As Canada’s two national rail companies—Canadian Pacific Railway (CP) and Canadian National Railway (CN)—competed to purchase American rail line Kansas City Southern (KCS), Canada’s agriculture sector stood to benefit from the deal.
The announcement this June of the launch of free trade negotiations between Canada and Indonesia has put a spotlight on the Asian market. For Canadian wheat farmers and exporters, the prospect of greater trade with Indonesia is worth close attention.
There are two variables that dictate prices and are out of farmers’ control. First, governments everywhere have long meddled with agriculture and trade policy. The net impact has been to create enormous externalities—barriers that inhibit the laws of supply and demand from dictating prices. Canada, a large net exporter, has often struggled for market access and suffered diminished competitiveness against subsidized farmers. Countries such as China, India and the U.S. as well as the EU continue to restrict market access and some also offer farmer supports that distort the market. There is no indication this will fade.
