This year’s Cereals North America conference, coverage of which you can get on our website at www.producer.com, was set to deal with lots of perennial grain industry issues: rail logistics, international trade, supply, demand and weather.
The conference was scheduled for Oct. 28-30 in Winnipeg.
There’s nothing new in these broad subject areas, but I’ll be listening for analysts’ takes on the crucial change that’s happened in the crop and commodity markets in the past year: the death of the long-term commodity bull market.
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China’s grain imports have slumped big-time
China purchased just over 20 million tonnes of wheat, corn, barley and sorghum last year, that is well below the 60 million tonnes purchased in 2021-22.
If it’s dead, what does that mean for the crop price outlook for the coming years? It’s pretty bad right now, creating financial losses for farmers who had enjoyed record returns for most years since 2006.
Our cherished notions of ever-expanding food demand leading to always-high prices have been shattered by the sell off since late 2012.
The fear in the market has switched from buyers worrying about adequate supply to sellers worrying about their big crops drowning limited demand.
It’s a sea change.
Conference organizer Dan Basse of AgResource Co. titled his speech: “Too much, too soon,” and I’m guessing that this implies he’s going to say world demand for food will continue to grow, but the massive crops produced this year far outstrip the gradual increase.
Bloomberg News published a story Oct. 27 headlined: Commodities drop to five-year low led by gasoline, sugar.
That’s the backdrop for what we’re dealing with in western Canadian farming, providing a bearish outlook for at least a couple of years.
Canadian agriculture has its own problems: rail service issues and distortions of grain flow caused by new federal regulations; continuing realignment of the prairie grain trade in the wake of he CWB’s loss of marketing monopoly; and the challenges of adding large acreages of soybeans and corn in an industry not designed to deal with them.
I’ll be tweeting and posting to my blog on our website from the conference, so you can check out my Twitter account or go to Producer.com to see what happened at the conference.
As well, check out next week’s paper to see how I sum up what happened at this major event.
