Farmers can change quickly if market signals are right

There are many facets to agriculture but the farmers within it generally share a mindset in the ways they respond to market signals.

Canadian producers do not differ from their American cousins in that regard simply because the land or the weather is particularly unique. They differ because of public policy.

An Ohio-based research company recently pointed out that farmers in the United States are not producing the crops that consumers seek. It suggested that farmers would miss out on food market opportunities unless they dance quickly to consumers’ tunes. (WP, Sept. 17, page 3.)

Brett Sciotto, chief executive officer of Aimpoint Research, suggests that growers are willfully recalcitrant in not changing their operations to suit the market’s apparent demands. He suggests a move away from pesticides, chemical fertilizers, high-yielding corn and soybean economies will be necessary.

It sounds simple but reality is much more complicated.

The real answer to why farmers don’t move quickly to meet popular demands lies with the market. Despite what consumers tell pollsters and economists who come knocking at the door with questions about shopping-cart decision-making, the market doesn’t shift that quickly. And farmers do react quickly, when it is in their interests to do so.

Western Canadian farmers have long been the North American kings of farming diversity, with many growers planting pulse crops, various small cereals, canola, flax, soybeans, canaryseed, mustard and corn. They do all this often in near drought conditions with some of the shortest growing seasons among any commercial producers on the planet.

During the toughest times, in the 20 years prior to 2008, prairie farmers tried branching out into spice crops, organics, elk, bison, ostrich, miniature cattle, wild boar and anything else that could offer new opportunities for profit and spread risk. Some narrowed their short-term risk profiles and invoked a canola and snow rotation to maximize cash flow.

Those who were able to stick it out in highly diversified markets had success. Many ended up with four or five different crops.

But after the 2008 commodity market boom, many western Canadian farmers moved to a wheat and canola rotation and dropped organics. They rapidly reacted to market signals and economies of scale. It is more efficient to produce two crops than seven, if two will reliably pay the bills.

After 2014, growers once again began spreading their operational risk as margins tightened on wheat and canola. And, as Sciotto suggested, many are in fact seeking ways to reduce chemical use, as they always have, because chemicals cost money.

American farmers haven’t diversified their farms the way Canadian growers have because U.S. public policy has allowed them to remain as they are, heavy on corn and soybeans and the methods that maximize yields. Canadian growers don’t have the same financial backstop.

However, farmers will change their operations if market signals indicate the need.

American consumers and voters speak differently to pollsters and the popular press than they do with their wallets or ballots. Money and votes ensure that their government continues paying the difference between wholesale and true farmgate break-even prices.

Consumers can and will ask for changes in farming practices and foods, as they should. North American farmers will respond, and quickly, if market conditions allow them to be successful and sustainable when doing so.

Karen Briere, Bruce Dyck, Barb Glen and Mike Raine collaborate in the writing of Western Producer editorials.

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