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.

These have been difficult times for the global brewing industry. While estimates vary, as the smoke clears, it appears world beer production was down between eight and 10 per cent in 2020, less than some early dire predictions of up to 14 per cent. Certain regions were particularly hard hit, such as Africa, Asia and Europe with output drops of 10 to 15 per cent. North and South America fared better with production down by two to five per cent. In China, the world’s largest brewer, production is estimated to have fallen by eight to 10 per cent, or 30 to 35 million hectolitres. To put this in perspective, Canada’s annual beer production is around 20 million hectolitres. In Japan, beer sales reportedly dropped nine per cent, while in Vietnam, which has a large population and strong beer culture, output is estimated to have fallen by a substantial 14 per cent.

In recent years, China has hastily established barriers to Canadian imports that have created trade uncertainty. Canadian farmers have begun to see Chinese policy for what it is, a fragmented approach void of certainty that spurns the norms of regional and international trade agreements. Simply put, trading with China is like bartering on the black market; there is no recourse if you are ripped off. In order to ensure the livelihoods of Canadian farmers are not tied to the whims of Chinese politics Canada needs to take advantage of new markets that embody rules-based trade. If this occurs, farmers can expect predictability, the main ingredient of good business and trade.