The low Canadian dollar relative to the American is seen as a competitive advantage for Canadian grain exporters since grain exports are priced in American dollars.
But ProFarmer Canada president Mike Jubinville says the advantage needs to be put into perspective.
“While the drop in Canada’s dollar makes Canadian grain more competitive, it’s a short-term variable,” he said. “Ultimately I don’t think currency has a great deal of impact on making Canada that much more competitive. But when it changes so fast over a short period of time it takes industry time to adjust to it. When the Canadian dollar is low relative to the U.S. dollar, typically that’s because Canada is ‘commodity’ type country. If the Canadian dollar is down it means commodity prices are down.
“The best prices we’ve ever seen on canola ($14 a bushel) was when our dollar was at par or better relative to the U.S. dollar. And the very worst canola prices ($6) we’ve ever seen have been when we were at a 65-cent dollar.
“When the Canadian dollar is strong it is usually when commodity prices are strong and we’re selling at prices that are the most profitable,” Jubinville said. “And that’s the oddity that never gets talked about.”