WINNIPEG (Reuters) — The swaying durum crops on Dave Marzolf’s farm look lush and even, bearing full kernels of the wheat used to make pasta. Some is made into couscous.
On a closer look, though, Marzolf’s durum kernels are infected with fusarium, a disease that produces a toxin known as vomitoxin and has forced him to sell the crop for animal feed.
“It’s garbage,” Marzolf said by phone from Central Butte, Sask. “Big crop, poor quality — now what?”
Durum, which thrives in desert-like conditions of dry, hot days and cool nights, is processed into semolina flour that is used to make pasta. Canada, the world’s top durum exporter, ships much of it to Italy, Algeria and Morocco.
Read Also
Working groups established to address challenges in the containerized and bulk movement of commodities
CN is working with the pulse and special crops sector on resolving challenges in shipping those commodities.
Vomitoxin and other problems resulting from excess rain have also spoiled crops in France, the European Union’s biggest durum exporter.
Expectations of a huge North American durum harvest weakened prices by one-quarter year over year, but industry officials have said they are likely to climb as harvest progresses and it becomes clear how much of the crop will not meet milling standards.
Canada’s 6.8 million tonne durum crop is its largest on record, topping last year’s harvest by 1.4 million. The 2.5 million tonne U.S. crop is the country’s biggest in six years, exceeding last year’s harvest by 250,000 tonnes.
However, much of it is unsuited for food production after fusarium spread in humid conditions. Millers aim to limit vomitoxin levels, which can affect flavour and processing performance and pose a risk to humans if ingested in high amounts.
“It wouldn’t surprise me if one-third of the (Canadian) crop would not be able to move into milling or food channels,” said Jerry Klassen, Winnipeg manager of crop trader GAP SA Grains and Produits.
However, pasta eaters may not need to swallow higher prices. The world durum supply is expected to rise by 1.3 million tonnes to 46.7 million in 2016-17, exceeding demand of 37.9 million, according to Agriculture Canada.
Top-quality durum sold at Saskatchewan grain elevators for C$251.87 per tonne as of Sept. 7, up more than $2 per tonne from a week earlier but 24 percent lower than a year ago, according to the provincial government.
Supply is enough now, but prices are likely to rise as the harvest progresses, Klassen said. The price spread has already widened between the top quality grade and third best to $100 per tonne, depending on the location in Canada, he said. Normally,it is $30.
In North Dakota, the biggest U.S. durum grower, quality looks good based on current samples but is likely to drop as vomitoxin-infected samples arrive from the northwestern part of the state, said Erika Olson, marketing specialist at the North Dakota Wheat Commission.
Cash prices in the state, which are down 14 percent year over year, are likely to strengthen this autumn as farmers hold off selling high-quality supply, she said.
“The question is, what is the level of the problem and how will the mills and elevators be able to deal with that,” said Jim Meyer, president of Italgrani USA, which owns mills and grain elevators.
The uncertainty has nudged cash bids higher for U.S. durum, and sharp increases may occur in certain locations, said Courtney Boryski, a trader at Hansen-Mueller in Nebraska.
North American millers, including Treehouse Foods and Ardent Mills, a joint venture of Cargill Inc., CHS Inc. and ConAgra Foods Inc., can mix varying qualities to meet the U.S. standard for vomitoxin.
“(But) you can only blend so much,” Olson said.
France’s farm ministry estimated last month that the 2016 durum harvest will be 1.4 million tonnes, down 20 percent. Quality problems in central France would mean that production suitable for food may reach only one million tonnes, one French durum broker said.
