WINNIPEG – What’s unfortunate about all the ruckus over Canada’s record grain exports to the U.S. this year is that the record is unlikely to ever be repeated.
Up until the end of May, Canada had exported more than 4.2 million tonnes of the major grains into the U.S. market, 3.9 million tonnes of which were in the form of wheat, durum and barley.
That’s more than two times what Canada has averaged in U.S. sales over the past 10 years.
It makes the U.S. Canada’s biggest export customer this year, displacing the usual contenders such as the former Soviet Union, China or Japan.
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In fact, member states of the FSU don’t even appear in the Canadian Grain Commission statistics. Exports to that region have been zip.
But not even the Canadian Wheat Board, which led the export charge into U.S. territory, thinks it can stake a permanent claim on high-volume sales across the border. And it’s not just because of the icy political climate.
“We think this year is an anomaly,” said spokesperson Brian Stacey. “This year was special because of a number of factors.”
- The U.S. was using hefty export subsidies and depressing world market prices in an effort to move its own grain offshore. If they had to compete against the U.S., Canadian exporters opted to do it on American turf where the spoils were higher.
- At the same time, adverse weather devastated its domestic crop. “If you look at the U.S. corn crop alone, the drop in production of U.S. corn was greater than the entire grain production of Canada,” Stacey said.
That created a huge demand for feed grains, notably Canadian wheat and barley.
- In a lucky break for some Canadian farmers, the disease fusarium head blight faked a drought when it killed their crop. That left them with some of the highest protein wheat in North America. Suddenly wheat that was virtually unsalable in Canada, commanded a premium price from American millers.
But this year, U.S. production is on the rebound, the government plans to reduce the support for export subsidies, and some of Canada’s more traditional buyers – at least for barley – are returning.
It could be that the furore, the investigations, and threatened trade action, will only accomplish what would have happened anyway – a reduction in Canadian exports into the U.S.
Pity.
