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.
A number of questions have been raised during the ongoing consultations on Responsible Grain. The new code of practice for Canadian grain production is now being developed by the Canadian Roundtable for Sustainable Crops (CRSC). Farmers ask, why is the industry doing this and why now? There are three broad drivers behind the development of Responsible Grain: to build public trust, support market access and prevent excessive regulation.
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.
The Canadian new crop missions for the latest growing season began as farmers across the Prairies struggled to get their crops out of the field. Following such a challenging harvest, the value of these wheat marketing visits to our leading customers around the world is evermore apparent. The missions are key to build and maintain relationships with our top trade partners, including China, Colombia, Japan and Nigeria.