Canadian farmers are excelling in several areas judging by the recent comments of our American neighbours.
Now, if they’d just stop using trade harassment to try to “level” the field.
We reported the U.S. Wheat Associates’ assessment of Canada’s solid lead over the United States in white wheat production and marketing in last week’s paper.
Asian millers like white wheat and demand is likely to grow. Australia now dominates the class, but the wheat industries in Canada and the U.S. both see an opportunity to take market share.
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The yield estimates for wheat and soybeans were neutral to bullish, but these were largely a sideshow when compared with corn.
It is interesting to note that the only incentive for growing hard white wheat in Canada comes through the market. The Canadian Wheat Board’s identity preservation program for the class pays a $2.50 per tonne premium and a small storage fee.
The U.S. has a federally funded incentive program that pays 20 cents US per bushel to a maximum of 60 bu. per acre. That works out to $7.35 per tonne with a maximum of $12 per acre. There is another $2 per acre payment if the grower uses certified seed.
Despite the attractive taxpayer-funded subsidy, American growers appear disinterested and willing to abandon the opportunity to Canada.
A recently published assessment of the Canadian and American hog industries points to another area of Canadian superiority.
Mildred M. Haley of the U.S. Department of Agriculture’s economic research service noted in December the superior productive capacity of the Canadian sow herd.
“In 1995, a Canadian breeding animal produced 1.9 more pigs per year than a U.S. breeding animal. By 2003, that gap had widened to 3.4 pigs per animal per year. The number of pigs per litter tells the same story. Canada’s breeding herd produces 0.4 pig per litter more than U.S.,” she wrote.
Haley attributes Canada’s lead to lower disease rates. The newness of much of Western Canada’s industry means diseases haven’t had a chance to take hold.
Also, the cold winters kill germs and wide distances between Canadian herds reduce the likelihood of disease transmission, she wrote.
Indeed, Haley’s assessment is that the rapid increase in Canadian hog exports to the U.S. has nothing to do with Canadian subsidies as the U.S. National Pork Producers Association alleges.
Rather, it is a natural reaction to a series of events, led not by a subsidy increase but by a subsidy decrease and superior production.
Canada ended grain transportation assistance in 1996, causing farmers to look for alternative uses for their feed grains. The U.S. hog industry about the same time started to move toward specialized production, splitting pig farrowing from pig feeding.
Some Canadian producers found a niche in supplying pigs to feeders in Iowa, where subsidized corn is even cheaper than Canadian feed.
Also during the period, the appreciation of the American dollar versus the Canadian dollar allowed American feeders and packers to bid more for Canadian pigs than Canadian feeders and packers.
It is hard to understand how the U.S. agriculture department can publish a report like Haley’s that argues Canada’s innocence in hog trade, but another arm of U.S. government, the commerce department, can impose preliminary antidumping duties on all live Canadian pigs.
We can only hope that Haley’s paper gets a fairer reading when the commerce department issues its final determinations on the countervail and antidumping investigations March 7.
The next day the U.S. International Trade Commission is scheduled to begin the final injury phase of the investigations.
