Canadian wheat exports are up but don’t try to say it’s because of the demise of the Canadian Wheat Board.
Trying to take a complex situation and boil it down to a simple yes or no based on that single factor would be a dramatic oversimplification, says Curt Vossen, president and chief executive officer of Richardson International.
“That’s why you’d never get me saying we’re selling more wheat now because the wheat board lost its monopoly,” Vossen said in an interview Apr. 1. “There are a whole bunch of different things at play. But it can be said with some fairness and objectivity that it certainly hasn’t hurt us.”
Last crop year Canada exported 23.9 million tonnes of wheat, including durum, narrowly surpassing the U.S. with exports of 22.3 million tonnes, according to International Grains Council figures.
Canada is forecast to export 21.9 million tonnes of wheat in the current crop year (2015-16), compared to 20.5 million tonnes from the U.S.
Canada was the world’s wheat basket in the 1920s and ’30s, but the U.S. has had that honour since the Second World War, although these days the supranational European Union is often the largest exporter.
The high U.S. dollar has priced U.S. wheat out of world markets, while making other countries, including Canada, more competitive. But there’s more going on. Diverse crop production gives Canadian farmers a competitive advantage, Vossen said.
“I think we’ve got ourselves in a enviable position in Canada,” he said. “Why? Because we’re not a monoculture. The United States, over the last 20 years, has become much more of a mono-type agriculture — corn-beans, beans-corn.
“We’ve got a truly diversified cropping base that gives us options.”
For example, moving an 80-million-tonne annual production of a single crop to a single type of market locks you into a single way of doing business, Vossen said, something Canada avoids and therefore more opportunities emerge.
“You do have a chance of moving that (more diverse crop) effectively to markets that look for value, that look for quality differentiation,” Vossen said.
This spring western farmers are expected to increase plantings of peas and lentils, but they’ll also seed big acreages of canola, spring wheat, durum, oats, and in Manitoba, soybeans and corn.
Cam Dahl, president of Cereals Canada, says Canada’s rise in wheat exports is a trend, not an anomaly. Vossen agrees. While Canada won’t always export more wheat than the U.S., which has so much farmland and a longer growing season, corn and soybean production continues to expand there, while plantings of other crops, including spring wheat, decline, Vossen said.
The United States Department of Agriculture predicts American farmers will plant 49 million acres of all types of wheat in 2016, down nine per cent from 2015 and the lowest since 1970. If the forecast proves accurate it would be the lowest harvested wheat acreage in the U.S. since 1910, G3 weather and crop specialist Bruce Burnett said last week.
“If the (U.S.) farmer keeps being fixated on that monoculture dominated by corn and beans it’s going to make them a less significant player on an ongoing basis in the wheat export marketplace,” Vossen said. “And that means other players, like Canada, can take some advantage of that to continue to diversify our options, so we never get ourselves to the place that we’re a one-wheat, monoculture… we can change gears,” Vossen said.
There was a time when Canadian agriculture was more dependent on wheat, he added.
“Now if wheat isn’t doing well they (farmers) can switch gears,” Vossen said. “And that gives them options. And options for any business are always a good thing. I don’t see that in the United States yet.”
Like Canadian farmers those in the U.S. grow what they think will earn the most net revenue, Vossen said. But there are factors, such as equipment, that make it less easy for some American farmers to grow crops other than corn and soybeans. For example, small-grain sowing requires an air seeder instead of a planter.
“You’ve got all those dynamics going on,” he said. “I think it’s good for us. We stay under the radar screen. We produce the things we produce. We give ourselves options and then you’re able to move on a short-term basis.”