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.
Naturally, pest-infested grain will be discounted, but there are less obvious reasons creepy crawlers affect the marketing of your grain worldwide. Farmers and grain companies strive to deliver grain that has zero or very little insect content. However, much of Canada’s grain is exported and bugs, actual or imagined, worm their way into market access issues.