Wheat prices are not making bread more expensive, say wheat growers from the Prairies.
In a joint statement issued today, SaskWheat, the Manitoba Crop Alliance and the Alberta Wheat Commission said a recent media report on food prices is inaccurate.
Part of a Canadian Press story published last week said bakery prices in Canada are expected to increase by as much as 5.5 percent in 2021. The article was about a Dalhousie University food price report that was released earlier this month.
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The CP story said the average family in Canada should expect to pay three to five percent more at the grocery store in 2021 because of “rising bread, meat and vegetable prices.”
It 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 per cent increase.”
Those numbers distort the price reality for Canadian wheat growers, said SaskWheat chair Brett Halstead.
“The price changes quoted in the interview are misleading and do not accurately reflect the on-farm prices wheat producers are receiving for their grain,” he said in a statement.
“Wheat producers appreciate that several factors influence store shelf prices, but the cost of wheat is not a major factor in the rise of food costs.”
The prairie wheat associations cited Statistics Canada data, suggesting wheat prices at the farmgate (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 article doesn’t explain where Smyth got his numbers, but the likely source is wheat futures. 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.
The Minneapolis 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 $5 to $5.60 per bu.
Regardless, the majority of spring wheat grown on the Prairies is sold abroad.
About 75 percent of all Canadian wheat is exported, says the Canadian Agri-Food Trade Alliance. That figure is likely much higher in Western Canada.
“Because Canada produces a large surplus of wheat each year, ample wheat supplies are available to meet the domestic market demand,” the prairie wheat and crop associations said in a statement.
“The domestic price of wheat is based on the world price, and any fluctuations in domestic price are based mainly on global factors.”
Chicago wheat futures have climbed in the second half of 2020, mostly because of smaller crops in Ukraine, Europe and Argentina.
SaskWheat, Manitoba Crop Alliance and the Alberta Wheat Commission are asking the Canadian Press to correct the article.
Contact robert.arnason@producer.com
