In early December, Dalhousie University released its Canada’s Food Price Report for 2021.
Weeks later, some prairie farmers continue to express anger about the report and the media coverage of the price forecast.
In the middle of the month three provincial groups — SaskWheat, the Manitoba Crop Alliance and the Alberta Wheat Commission— issued a joint statement challenging a Canadian Press article on the Food Price Report.
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Part of the CP story said bakery prices in Canada are expected to increase by as much as 5.5 percent in 2021, citing stats from the Dalhousie report.
The story also paraphrased comments made by Stuart Smyth, an agricultural economist with the University of Saskatchewan.
“The cost of a bushel of wheat hit about $6 in November, Smyth said, up from about $4 roughly 18 months ago — a 50 percent increase.”
Those numbers distort the price reality for Canadian wheat growers, said Brett Halstead, SaskWheat chair.
“The assertion (was) that food prices are going to increase three to 5.5 percent and one of the main reasons was wheat prices were up,” said Halstead, who farms near Nokomis, Sask.
“(But) farmgate wheat prices are not up significantly.”
The prairie wheat associations cited Statistics Canada data, suggesting wheat prices at the farm level (not including durum) were 3.3 percent lower in October 2020 than prices from April 2019.
“The most recent data from Statistics Canada’s Farm Product Price Index also shows a decrease in the value of grains of 2.7 percent from April 2019 to September 2020.”
The CP story, linking wheat prices to higher bread prices, provoked a mini-storm on Twitter.
Prairie growers questioned the accuracy of the article and asked the wheat associations to do something about it.
“May I ask if any of our ag associations are asking for a retract of the statement wheat prices have increased by 50 percent,” tweeted Vicki Dutton, a producer from Paynton, Sask.
Other farmers made similar comments on social media and some contacted their provincial group about the CP report.
“We did get some feedback. Producers saw this article and were disappointed in it,” Halstead said.
“We definitely heard from members.… This (article) was saying that farmers are getting more money and consumers are going to pay more.”
Most producers directed their anger at the notion that wheat prices have risen 50 percent over the last 18 months. Those numbers are close, if the source is wheat futures on the Chicago Board of Trade. In May of 2019, wheat futures in Chicago were around US$4.20 per bushel. Since October, Chicago wheat has been trading around $6 per bu.
But Chicago wheat futures don’t reflect prices at the elevator in Western Canada.
“They’ve taken a snapshot of the Chicago Board of Trade futures, at a convenient time, to show a 50 percent increase,” Halstead said.
Smyth explained on Twitter that his comments were based on wheat futures, but the distinction between wheat futures and wheat prices wasn’t mentioned in the article.
The Minneapolis futures contract is a better gauge of western Canadian wheat prices because it tracks the price of hard red spring wheat.
Sask Wheat, @mb_cropalliance, and @AlbertaWheat are concerned that a recent Canadian Press article inaccurately reflects the impact of the price of wheat on rising food costs in Canada.
Read the news release here: https://t.co/VU1HRzbFPt#WestCdnAg pic.twitter.com/LlJADjynix
— Sask Wheat (@SaskWheat) December 15, 2020
Wheat futures in Minneapolis traded sideways from August 2019 to August 2020, but in the last four months the price in Minneapolis has risen from US$5 to $5.60 per bu.
In mid-December, the elevator price for 1 CWRS 13.5 in Saskatchewan was $6.40 to $6.75 per bu., depending on location.
There is a possibility that wheat prices could rise, in the coming weeks partly because of Russia’s tax on wheat exports.
On Dec. 15, Russia announced a 25 euro per tonne tax on wheat exports between Feb. 15 and June 30 and it will limit exports for the period to 17.5 million tonnes, Reuters reported.
Russia is taking the action to stabilize domestic prices of flour and bread.
