The Canadian Wheat Board says it won’t have any problem selling all the wheat and barley farmers can deliver this coming year.
But unfortunately that’s not saying a lot this year.
Rather, it reflects the fact the agency won’t have a lot of wheat and barley to sell.
“Given the size of the crop that we see coming, there’s going to be a home for all of it,” CWB chief executive officer Greg Arason said last week. “It will just be a matter of getting it to the right market.”
Read Also
Agriculture ministers agree to AgriStability changes
federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
Arason told a news conference last week that the agency expects western Canadian wheat and durum production will be in the range of 20 to 21 million tonnes.
That’s a decline of roughly 20 percent from the 25.2 million tonnes produced last year.
The board had been expecting a similar-sized crop this year, until drought shrivelled yields across much of the central and western grain growing areas.
Arason said it’s too early to make any firm projections of export volumes in 2001-02, but it’s clear that sales will dip sharply from last year’s 18.1 million tonnes.
“The extent of the reduction depends on what happens between now and the end of harvest, but we do foresee that given the current state of the crop, it may be in the order of a 10 to 15 percent decline.”
In the crop year that ended July 31, the board exported 12.5 million tonnes of wheat, 3.6 million tonnes of durum and two million tonnes of malting and feed barley.
Meanwhile, Saskatchewan Agriculture last week released its first production estimate for 2001, projecting a provincial harvest of 20.6 million tonnes of grains, oilseeds and special crops. That’s 18 percent below the 10 year average and the smallest crop since 1989.
Aside from the reduced volume, the wheat board could have challenges dealing with two distinct quality issues.
The central and western Prairies will produce thin, drought-stressed grain, while in the eastern Prairies, hot, humid weather could result in disease problems, including fusarium.
The board will try to maximize its sales into its most important quality markets, including domestic buyers, Japan, the United States and Mexico.
But it also expects to be knocking on doors in countries that want to buy lower quality wheat.
“This is going to be a very troubling year,” said wheat board chair Ken Ritter.
“But until we see the full extent of the harvest, the details are a little bit obscure.”
On the bright side, the board said smaller crops in Canada, China, the European Union and Australia should mean better prices.
“The board is predicting prices that will be generally higher, especially for wheat,” said Arason, noting that the July pool return outlook for No. 1, 12.5 percent protein, Canada Western red spring wheat is $217 a tonne, up $24 from last year, which in turn was $13 a tonne higher than the previous year.
Board officials said the smaller crop will present challenges to everyone in the grain industry.
There will be substantially fewer bushels of grain to be handled, whether that’s wheat, barley, canola or special crops.
That could lead to more uncertainty and change in an industry already undergoing widespread restructuring and consolidation.
“It’s going to be competitive. There are a lot of facilities that are looking for grain this year,” said Arason.
“Whether that will cause a further shakeout is a good question. I think probably there’s some likelihood of that.”
