There’s good news for prairie farmers from the head of the North American Millers Association:
The association is terrified that the U.S. is going to lose its prairie spring acreage to corn. That’s bad for U.S. millers, who use spring wheat to make bread.
But that’s probably good for Canadian prairie farmers, who wouldn’t mind seeing the competition from U.S. farmers decline. If U.S. spring wheat acreage declines, as ethanol mandates and subsidies boost corn prices and new corn varieties can be grown further west across North Dakota, Â Canada’s high quality spring wheat will be able to get higher prices from the millers, who don’t have any easy substitutes for spring wheat. They could import spring wheat from overseas, but that still puts prairie spring wheat into a nice basis position.Â
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U.S. biofuel subsidies have been little but good for U.S. corn growers, but they’ve been a nightmare for livestock producers and producers of competing grains down there. Up here, in the colder north, there are fewer biofuel subsidies so any distortion in the U.S. market for acreage can be taken advantage of by Canadian farmers. Just as the gross distortions created by U.S. farm policies over the past 30 years have made prairie farmers much more crop-diversified and quick to exploit new markets and assess opportunities than U.S. growers, so these biofuel subsidies may have the affect of making prairie Canadian wheat a much more rewarding commodity in a couple of years time.
Wheat has had a long decline in importance for prairie farmers, but if U.S. production gets significantly reduced, wheat may once more become the undisputed king.
