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By Geoff Geddes
That number dropped from 79 per cent
in the 1970s to about 27 per cent today.
“It shows you how more evolved produc-
ers have changed their game in approach-
ing international trade and supporting do-
mestic production,” said Turner. “As well,
Russia and the Black Sea countries are
leading wheat exporters now, something
that seemed far-fetched back in the ’80s.
That trend of new players in old markets is
not going to subside.”
Just as the players have changed, so too
have the numbers.
According to Caalen Covey, former
business development and markets
manager at the Alberta Wheat Commis-
sion, “over the last several years there has
been staggering growth in the worldwide
demand for wheat.”
That growth in demand has triggered a
corresponding rise in production, to the
point where we now have a global wheat
glut.
“Australia had a massive crop recently, as
did the United States over the last couple of
years,” said Covey. “Canada and the Black
Sea countries have been producing a lot as
well, moving supply well ahead of demand
and driving prices down somewhat.”
That doesn’t concern Covey, however,
who expects the situation to turn around
quickly. “The U.S. is already switching out
of winter wheat this year because of the
carryover from last year,” he said.
Like many countries, Canada has
boosted its quantity of wheat production,
but equally important is the improvement
in quality.
“The impact of massive investment
in Canadian logistical systems in recent
years is considerable,” said Dahl. “It starts
with how we store grain on the farm,
where aeration is now the rule rather
than the exception and grain bins feature
electronic monitoring.”
From Dahl’s perspective, the difference
between elevator systems 30 years ago and
what’s on the farm today is dramatic, as
are the benefits of that evolution. “Now
we can prevent mycotoxin infections and
maintain the right moisture level,” said
Dahl. “The large investment in infrastruc-
ture begins at the farm and includes in-
land facilities as well as upgrades to West
Coast capacity. Consequently, over the last
10 years we’ve significantly improved our
ability to deliver the right product to the
right place at the right time.”
In the past quarter-century, advances in
technology have left their mark on every
sector of the economy, and wheat markets
are no different. This has paved the way
for what some call the “commodity casi-
no,” where price information and news
flow continuously, margins disappear in
minutes and risk management is critical.
“I think many farmers are used to the
old system under the wheat board, so they
don’t manage risk the way they should,”
said Covey.
Because they’re used to delivering as
soon as possible, Covey said many pro-
ducers aren’t taking advantage of things
like forward pricing or timing sales,
which would allow them to avoid selling
everything in the fall when prices may not
be at their peak.
Fortunately for farmers and exporters,
the proliferation of new technology has
cut both ways.
“The commission has a new information
service called PDQ that provides cash grain
market price information and related statis-
tical data,” said Covey. “It enables farmers
in Western Canada to view regional grain
prices and gain a better understanding of
what’s happening in their area.”
The explosion of technology in this
century has led to other opportunities,
such as the development of cutting-edge
Canada Prairie Spring Red (CPSR) wheat
varieties for western Canadian farmers. In
co-operation with Cereals Canada, Covey
has created a marketing plan to take
advantage of the new varieties.
“We want to ensure that when produc-
ers raise varieties, there is a viable market
for them,” said Covey. “Working with
exporters, we are trying to align produc-
tion and increase the number of acres of
CPSR so farmers can derive the maximum
benefit from yield improvements.”
Although much has changed over the
last quarter of a century, Turner said there
has been one critical constant. “Canada
remains one of the largest wheat pro-
ducers in the world at close to 30 million
tonnes per year,” he said. “Going forward,
trade missions will be more vital than ever
to stress the quality of our wheat. Our
history as a consistent supplier of
good-quality grain is a big reason that
we’re still a top exporter.”
Still, the Canadian wheat industry can’t
afford to be complacent.
“We must continue to focus on what
markets demand,” said Dahl. “What
worked 20 years ago will not work now
or 20 years from now. We need to main-
tain a resilient industry that can adapt to
change.”
Massive growth in worldwide wheat demand over the past several years has triggered a corresponding bump in
production, but Canada has focused on increasing both production and grain quality.
Spring
2017
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