OTTAWA — The federal government predicts that despite the self-imposed sales cap, the value of Canadian wheat exports to the United States this year will be close to $300 million, just 23 percent below last year’s record sales.
And virtually all the decline will be because of a sharp reduction in sales of feed wheat and lower market prices for durum, according to figures presented last week to the Commons agriculture committee by Agriculture Canada.
However, these are best-case figures offered by the government.
Depending on actual sales contracts, they could be inflated by as much as $19 million, making the year-over-year decline greater.
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Using their own assumptions, the federal projections over-estimate pool returns for durum sales by $3.5 million. And using Ontario Wheat Board projections, income from sales of eastern wheat could be inflated by as much as $15 million.
The real decline could be as much as 28 percent.
Mike Gifford, director of trade policy for Agriculture Canada, told MPs repeatedly Aug. 9 that 1994-95 sales to the U.S. will not be hurt by the recently concluded trade pact which limits shipments of prairie grain to 1.5 million tonnes for one year.
Any reduction will come because of falling demand and market conditions, he said. It would have happened without the deal.
The government projects the value of sales will fall to $300 million from last year’s $390 million.
The figure is based on the assumption that the 1.05 million tonnes of non-durum Canadian Wheat Board sales allowed under the deal will average $151 million per tonne for $158.5 million.
It is assuming the 450,000 tonnes of durum sales allowed will fetch an average of $185 per tonne for $83.2 million.
It is assuming the Ontario Wheat Board, not restricted by the deal, will sell a record 400,000 tonnes at $145 for a total of $58 million.
However, Ontario Wheat Board marketing manager James Whitelaw said last week 400,000 tonnes actually is the upper limit of possible sales.
“I would say 300,000 is realistic,” he said in an interview from board offices in Chatham. “But 400,000 is possible depending on how the Americans use the EEP.”
Whitelaw said Ontario sales will be greater if the American government uses its export enhancement program to sell eastern American soft white wheat into export markets, cleaning out American stocks and creating a demand for Ontario wheat.
The projected $83 million in durum sales does not take account of the fact that Canada agreed to a $23 per tonne American tariff on the last 150,000 tonnes of sales.
That will reduce the returns to the durum pool by close to $3.5 million on the final batch of sales.
