The Canadian Global Crops Symposium began here in Winnipeg today with an itinerary of big name Canadian and international agriculture trade luminaries. Through the day I’ll be updating this post with what’s going on.
FARMER ORGANIZATION FOCI
Leaders of four farm and agriculture-based organizations have been laying out their concerns for the future as part of a series of speeches and a panel discussion.
Greg Porozni unveiled the nature and concerns of Cereals Canada, of which he is the first chair. Terry Youzwa, Canola Council of Canada chair, explained how the canola industry is laying out its 26 million tonnes by 2025 challenges the industry to encourage the demand and ensure that the transportation infrastructure is there to handle that and other Prairie crops. Nick Sekulic, the chair of Pulse Canada, talked about his organization’s focus on boosting value and profit in exports, and trying to avoid just focusing on boosting volumes. Right now Grain Farmers of Ontario chair Henry Van Ankum is speaking.
PIVOTING FROM SHORT SUPPLIES TO MORE COMFORT – BUT NOT THAT COMFORTABLE YET
Bill Cordingley, managing director and head of Food and Agribusiness and Advisory for Rabobank International in the Americans, provided a generally bearish outlook for crop markets in 2014-15, but noted that stocks now are not comfortable enough to be considered generally burdensome if normal crops are produced this year. And he noted that political crises and strife, like that in Ukraine, is worrying the markets.
He, like Greg Page of Cargill earlier, noted that Canada’s “just-in-time” grain industry, with little elevator storage but lots of on-farm storage, can do very poorly in years of transportation problems like 2013-14. Cordingley said the industry doesn’t need to throw out the system because of one bad year, since it is a highly efficient system in most other years – better than in most countries – but the government needs to keep in mind the vulnerability when formulating governing legislation for the industry.
WHY DO THE JAPANESE BUY CANADIAN MALT BARLEY?
There are lots of places the Japanese can go to buy malt barley. So why are they often buying Canadian malting barley?
That was a question Dr. Kensuke Ogushi of Sapporo Breweries tried to answer, sketching out how exacting Japanese demands for quality, its brewers’ needs for tight specifications and a desire by the Japanese to spread out their risk by sourcing from multiple markets is behind Japan’s steady demand for Canadian malting barley. The Japanese go beyond buying crop and actually help develop specific crop varieties to be grown in crucial suppliers like Canada.
GREGORY PAGE OF CARGILL ON CANADA
Cargill Inc. executive chairman Gregory Page gave the first big speech at the conference, explaining why Cargill likes Canada so much. It’s in Cargill’s top-five countries to invest in in recent years and it’s invested about $1 billion in the last 10 years. Those investments “accelerated” because of the end of the CWB monopoly, but Cargill was already heavily invested in Canada.
Fast said Cargill intends to keep investing in grain handling, canola crush and refining, and ag products production. Canada is a good country in which to do business, he said, and has “low political risk,” which is attractive to a global multinational like his that has to deal with instability elsewhere.
Page repeatedly noted Canada’s fortune to have an agriculture sector dominated by rain-based farming systems. In places like the U.S., crop production often relies upon irrigation, often using depleting aquifers. “Canada’s reputation as a rain-fed, reliable supplier will become increasingly important,” Page said.
Page highlighted the assault on GMO crops in the U.S. and said the last two years have seen an enormous loss of public support for GMOs.
FAST MONEY FOR CANADA GRAINS COUNCIL
International Trade Minister Ed Fast was the first speaker at the conference, giving the Canada Grains Council $100,000 to support its travels to work out grain trade snags and snarls with American and other foreign grain trade partners.
He also described the importance of international trade to the Conservative government, which has made it a clear priority since taking office in 2006. He also discussed the differences between Canada-South Korea free trade, which was negotiated in order to stop the loss of that market Canada had been suffering as other countries like the United States made bilateral free trade deals first. That deal was an attempt to “play catch-up” and to preserve that as an export market for Canada.
The CETA deal with the European Union, for which the fine print is still being written, is an attempt to gain a “huge opportunity . . . to get a leg-up, first mover advantage over the United States.” With the EU-US free trade talks still not concluded, Canada getting a deal first was important.
I (Ed White talking here) remember the anxiety in some Canadian export trade circles a couple of years ago when the Canada-EU talks bogged down and the U.S. began theirs. There was big worry that if the EU focused on the U.S., they’d forget all about little Canada. So there was a lot of drive to get a deal done before the EU and US got obsessed with each other. Among export ag industries a huge breath of relief could almost be felt as the Canadian deal was announced in the past year.
Last week I was down in Washington and I heard from U.S. and EU ag trade people and they described negotiations there, and it didn’t sound like any deal there will come quickly. They’re embroiled in a serious scrap over protecting “Geographical Indications,” which is place-specific names for products like Rocquefort cheese. But the Americans fear EU producers will try to expand GIs to cover all sorts of generic stuff everyone makes, like Provolone cheese. Canada has agreed to respect European GIs that are legitimate, but the list of those has not yet been finalized.