It’s a great time to be a farmer in Western Canada, but don’t expect the good times to last forever, grain industry officials said during the Fields on Wheels conference in Winnipeg Nov. 9.
“This is truly a time of opportunity,” said Richard Wansbutter, Viterra’s vice-president of government and commercial relations. “I really think these are the best of times to be in agriculture.
“I guess my observation is simply that, enjoy it while you can.
“We do move in cycles and we’ve had a pretty good run the last four or five years.”
Wansbutter added however, that he’s optimistic given the growing world population and the demand for food and fuel.
“I have not seen an unhappy farmer in several months, unless he didn’t like his protein content,” said Keith Bruch, vice-president of operations at Paterson Global Foods. “But in net returns per acre we’ve never seen values like this before. It is a wonderful time to be a farmer in Western Canada on many measurements.”
The 1970s was a golden era in agriculture too, but it didn’t last, said Paul Earl, acting director of the University of Manitoba’s Transport Institute, which organized the meeting. Agriculture is cyclical, he said.
“Agriculture, over the whole sweep of human history, has never been, except in rare cases, really a high-return enterprise,” Earl said.
The need to feed nine billion people by 2050 will drive new technology in crop production, including genetically modified wheat, Bruch predicted.
“We think there will be increasing focus on cereals,” he said. “With the changes to the wheat board the motivation to start putting capital into that has increased. We’ll see the introduction of GM into wheat.”
Politics will continue to play a role in agriculture too, he said. Biofuel policies, especially in the United States, have boosted the price of corn, dragging the value of other crops higher, Bruch said.
“The world cannot afford to take food out of mouths and stick into cars,” he said. “There are options out there, but they’re still at the early stages of technology and I see that as opportunity for producers in Western Canada.”
Earl, who worked on farm policy for United Grain Growers and the Western Wheat Growers Association, agreed farming will continue to be influenced by politics.
“It’s always political because we all have to eat,” he said.
Canada needs policies to encourage further processing for Canadian crops, Bruch said.
“Grain handling and transportation are just a means to an end; they’re not the end in itself,” he said.
Exports, however, will continue to be important, Bruch said. That’s why federal government should continue to promote market access.
Higher Canadian Grain Commission (CGC) fees for grain companies are a concern too, he said.
“The prices they (CGC) are going to put on their services, to be frank, are out of sight and unrealistic to what the market would be able to provide for services that aren’t really required in the new (post-CWB monopoly) world,” Bruch said. “For us then it becomes a question of public good versus commercial cost. If that’s been thought through well enough it’s not being shown in the legislation.”
In an interview later Bruch said the CGC doesn’t need to do outward grain weighing and inspection and issue Certificate Finals guaranteeing export grain grades.
“What’s important is we give customers the quality they are asking for,” he said. “The important thing is the grain commission maintains the grading standard for Canada. So whatever is graded as No. 1 CWRS matches that grade standard. They (CGC) can maintain that standard and train the companies, but they don’t have to be the ones doing the inspection on it.”
Bruch expressed reservations about Canada’s wheat variety registration system. On the one hand it has created demand from Canadian wheat, but on the other there’s increasing demand to grow American wheats in Canada.
“The risk for me is that you begin to blur certain end-use characteristics of Canadian varieties vis-a-vis the U.S.,” he said. “Do you really want to blend the two systems or do you want to maintain ours, or do you at least want to give it a little bit more flexibility and creativity in varieties going forward?”