THE positive headlines on the crops side of agriculture are unlike anything we’ve seen in decades. Although it is good news, celebration is premature.
World wheat prices have risen about 75 percent since April, wheat futures in the U.S. have hit all-time highs, the Canadian Wheat Board has set its August Pool Return Outlook, its current best guess at a yearly price average, at $7.02 per bushel at port for the top grade of Canadian western red spring wheat, the durum PRO is at its highest ever, prices for canola, feed and malting barley are strong, and Statistics Canada has reported that farm receipts reached record levels for the first half of 2007 with gross revenue from crops reaching $8.4 billion.
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The financial community is taking notice too. Agricultural commodities have become a worthwhile investment recommended by bankers and mutual fund managers.
At last, some farmers have a chance to earn a bit of profit from a year’s work. However, others won’t be so lucky. Some must take whatever added cash flow they have and invest it back into their farm for repairs, equipment upgrades or bill payments they may have put off during the spate of bad years prior to this one.
As well, prices would have to climb considerably higher to match the steady increases in farm input costs during the past two decades, particularly in fuel, fertilizer and chemicals.
Then there are those farmers who saw yields shrivel during the July heat wave and have almost no crop to speak of.
When livestock is brought into the equation, it is clear that agriculture is not out of the woods yet.
The hog industry in particular is facing one of its most difficult periods in recent memory, while the cattle industry continues to be sluggish.
It’s important in times like these to ensure governments at all levels don’t misinterpret the good news and allow long-standing agricultural problems to slide off their priority lists.
The underlying issues that have prevented farming from reaching its potential for decades remain: trade-distorting subsidies among competitors, high input costs, concentration of ownership among grain and chemical companies and lack of reliable farm safety programs including a dependable disaster assistance plan.
Negotiations on the next generation of farm support programs are now underway between the federal and provincial governments. The talks are mired over the federal/provincial cost sharing arrangements and how best to design the new plan. Whatever politicians decide, farmers will feel the outcome for years. As well, with the economics so far out of whack for hogs and cattle, governments cannot afford to file agricultural issues in the back of the cabinet.
While the signs are encouraging, it is vital that governments continue to develop the programs and policies necessary to provide a safety net for farm income and encourage the development of a sustainable farm economy.
Bruce Dyck, Terry Fries, Barb Glen, D’Arce McMillan and Ken Zacharias collaborate in the writing of Western Producer editorials.
