Canada has a good quality crop to sell

But markets are uncertain as geopolitics ‘trumps’ supply and demand

On average western Canadian grain farmers harvested a high-quality crop this fall, and lots of it, but they’re selling into an uncertain market where politics obscures supply and demand.

“Overall the crop quality is really, really nice,” Daryl Beswitherick, the Canadian Grain Commission’s program manager for national inspection standards, said in an interview Nov. 9.

Total grain production is slightly above average too.

“This would have been a record-busting crop a few years ago and now it’s just a little bit above average,” Cam Dahl, Cereals Canada’s chief strategy officer, said in a separate interview. “So average production keeps growing, growing and growing and yeah, it’s a good thing.”

Related Articles

One or two more rains at the right time might have resulted in the bumper crop some were expecting, Beswitherick said.

Eighty-five per cent of Canada Western Red Spring (CWRS) wheat, the West’s most seeded and highest-value wheat, is in the top two grades — 60 per cent is No. 1 and 25 per cent No. 2.

Manitoba did even better at 64 and 25 per cent No. 1 and No. 2.

Good harvest weather, unlike the 2019 harvest from hell in 2019, helped, Beswitherick said.

Why it matters: High-quality crops pay obvious benefits like higher returns for farmers, but are also easier to sell and store because there’s less need for blending and segregation.

In 2019, 43 and 35 per cent of CWRS graded No. 1 and 2.

“Last year the (wheat) grades were good,” Beswitherick said. “There definitely were falling number issues that weren’t revealed in the actual grade that caused some issues.”

There’s a direct correlation between poor falling numbers and sprouting and there was a lot of that because of a wet fall in 2019 across much of the West.

“There’s an old saying among farmers that whatever you don’t take off in August you’ll take off in October because September can be a wet month, but this year it was extremely dry and it was fantastic,” he said. “Even corn is done in Manitoba and even the sunflowers are almost done and typically it can be the end of December to try to get sunflowers. It has been an absolute dream and after last year everyone was very, very thankful for a nice fall, especially with COVID and everything else. The last thing we needed was a brutal harvest for producers.”

CWRS protein in Manitoba is averaging 14 per cent and 13.4 per cent Prairie-wide.

The 10-year Prairie average is 13.5 per cent.

In 2019 and 2018 it averaged 13.6 and 13.7 per cent, respectively.

“With the growing conditions that 13.4 you might have thought would be a bit higher,” Beswitherick said. “We got pretty dry and hot, but the protein didn’t go crazy… but it’s in line with the long-term average.”

However, as is the case almost every year, there are pockets of reduced quality, Beswitherick said. An early frost in northern Saskatchewan and Alberta downgraded about 14 to 15 per cent of the West’s wheat.

“When you get into southern Saskatchewan you get into some really hot, dry growing conditions, he said. “We saw some really thin, shrunken wheat, but again in pockets.

“As expected, the falling numbers are no issue this year. Everything is really, really high, which is… part of the registration system. We want varieties with good falling numbers.”

Before new milling wheats are recommended for registration, a prerequisite for commercialization in Western Canada, is they must meet standards for disease resistance, agronomy and end-use quality. As a result, if a western Canadian milling wheat looks good, it’s going to perform well during milling and in food making.

Around five per cent of wheat samples were downgraded to No. 2 due to fusarium head blight.

“About four per cent of the samples were downgraded across the Prairies for midge, but… over 25 per cent of the samples had midge present,” Beswitherick said. “It was about 15 per cent in Manitoba, 25 per cent in Saskatchewan and 32 per cent of Alberta where the samples had midge. Midge was very present this year, but with a tolerance of two per cent (for a No. 1 and five per cent for a No. 2) it really didn’t cause a lot of downgrading.

“There were a few that were over the five per cent. Some as high as eight, but those were few and far between. Midge definitely was present in the crop.”

There are new wheats available with midge tolerance.

A large, high-protein, good-quality wheat crop gives Canada a good story to tell, when Cereals Canada, which includes the Canadian International Grains Institute since the two merged earlier this year, starts its live, virtual new crop missions Nov. 20, Dahl said (see sidebar).

“It’s going to be a much easier story to tell,” he said, compared to 2019.

“Right now one of the key things international markets are looking for is reliability, because of the pandemic of course, and we have delivered that in spades.

“Throughout the whole pandemic this (grain handling and transportation) system has operated flawlessly. It’s not often that we say that about our system, but it truly is the case. It doesn’t happen accidentally. A lot of work has gone into making sure that happens. As a result we are reliably supplying record volumes of grain to the world. It’s a good thing. And prices are pretty decent to go along with it.”

Although Canada has more than 34 million tonnes of new-crop wheat to sell, and prices have been improving, the long shadow of geopolitics threatens to subsume supply and demand, Dahl warned.

“There is so much politics in play right now,” he said. “We don’t know what’s going to happen after Mr. Biden takes office (as president of the United States). Is he going to take a completely different tact (than president Donald Trump) with China, or is it going to be more of the same (with trade tensions)? That’s going to have a massive impact.

“I can’t imagine it’s going to be a 180-degree pivot and everything is going to be fine with China. That’s not where the United States is at right now. There’s a lot of volatility because there’s a lot of politics.”

Meanwhile, China is talking about banning Australian wheat imports, and, after several years of drought Australia has more wheat to sell.

Australia might start exporting more wheat to Indonesia, displacing some Canadian wheat.

“If it was just supply and demand… I think it would be predictable, but it’s not,” Dahl said.

About the author

Reporter

Allan Dawson

Allan Dawson is a reporter with the Manitoba Co-operator based near Miami, Man. Covering agriculture since 1980, Dawson has spent most of his career with the Co-operator except for several years with Farmers’ Independent Weekly and before that a Morden-Winkler area radio station.

Comments

explore

Stories from our other publications