The 2003-04 crop year will go into the books as a bounce-back year for Western Canada’s grain industry.
It was really just an average year, but after drought-ravaged 2002-03, average probably looked pretty good to grain farmers, shippers and marketers.
“I suppose it could be called getting back to normal,” said Glenn Lennox, a market analyst with Agriculture Canada.
The year wasn’t without problems. While prairie crops in general were good in 2003, some areas suffered losses from drought and insects.
Transportation problems affected shipments in fall and early winter as shippers complained that the railways seemed unprepared for the early harvest and larger crop.
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Ongoing problems in the beef industry had a spillover effect into the grain sector, as mixed farmers felt the crunch of low cattle prices and feedlots bought less feed grain.
Access to the lucrative wheat market south of the border was shut off by prohibitive tariffs imposed by the U.S. government at the urging of U.S. wheat growers.
And prices were generally lower in 2003-04. The expected return for wheat is down about 15 percent, while canola is down about four percent and peas down about 17 percent.
Despite all that, the year that ends July 31 didn’t turn out too bad for the grain sector.
Here are statistics for 2002-03:
- Farmers were able to harvest a crop of 47.1 million tonnes, just about dead-on the 10-year average.
- Deliveries to primary elevators will be about 28 million tonnes. That’s way up from last year’s 19 million tonnes, but still below the 10-year average of a little less than 32 million tonnes.
- Exports of the major western grains, oilseeds and pulse crops are on pace to be in the range of 26 to 27 million tonnes.
That’s up from 16 million tonnes a year ago and in line with the 10-year average.
- Canada’s share of the world wheat market is expected to be about 15.5 percent, second only to the U.S.’s 32.5 percent among the five major exporters. A year ago, Canada stood fourth at 8.8 percent.
- Year-end stocks on July 31 will be around 10.1 million tonnes, up slightly from the previous year’s 9.3 million.
- Roughly 40 percent of Western Canada’s grain exports will be shipped through the port of Vancouver, with 34 percent moving east by water or rail, 12 percent going to Prince Rupert, B.C., 12 percent exported directly from prairie elevators to the United States or Mexico and two percent moving through Churchill, Man.
- Despite problems last fall due to poor rail service, the number of producer cars has increased sharply. With four weeks left in the year, the number of cars loaded and shipped by farmers totalled 8,088, up from 2,518 at the same time a year earlier.
Saskatchewan Wheat Pool president Terry Baker said that while production and exports were up, the grain handling and transportation system operated far below capacity in 2002-03 because of limited supplies.
While that wasn’t great for the grain companies, it had some benefits for producers.
“There was lots of capacity chasing a small crop and that’s good for farmers,” he said.
“Most grain handlers were very competitive in going after grain.”
Baker said the prospect of a good-sized crop this year has grain farmers in a better frame of mind.
“We’re looking at a very promising year coming up and I think the optimism level has risen,” he said.
Agriculture Canada is projecting exports of about 27 million tonnes in 2004-05, slightly ahead of the current year.
The bad news for producers is that it’s also projecting lower prices for most grains exccept wheat.
