Exceptional spring rainfall has forced Western Canadian grain
farmers to abandon all chance of plantings in an area of land
about the size of Switzerland.
Farmers say up to 12.5 million acres could be left unseeded
thanks to the sustained rainfall and low prices. In square miles
that’s 16,140 in unseeded land this crop season or a chunk of
farmland about the size of Switzerland.
This will leave wheat at its smallest crop area since 1971, only
19.15 million acres across all of Western Canada. Durum
seeding will drop to the smallest area since 1980 — down 39%
from the 2009/2010 crop year at 3.4 million acres.
Barley is also affected and is looking at its lowest acreage
since 1965 at about 6.6 million acres — down 20% from last
The news is reverberating around a hungry world and the
Chicago Board of Trade wheat futures for September rose for
the third straight day following the announcement of the crop
setbacks on 11 June.
“Many areas got off to an early seeding start, but the
extraordinary rains halted progress,” said Bruce Barnett, director
of weather and market analysis for the Canadian Wheat Board
(CWB), the largest wheat and barley marketer in the world.
“Significant amounts of farmland remain unseedable at this late
date.” Barnett adds that in many cases, these acres are “just lost
and will not see any crop.”
Worst hit is Saskatchewan where 36% of the crop remains
unseeded and prospects for additional seeding are termed as
“dim.” Overall, across the prairie provinces of Western Canada
seeding crops is about 78% while normally by early June the
seeding is entirely complete.
Total wheat production through the CWB is expected to be
about 18.9mt (million tonnes) compared with the 24.3mt of the
previous crop year. The total includes 3.16mt of durum and
7.64mt of barley. The all-wheat yield is expected to be above
the 10-year average but below the level achieved in the past two
The only good news is that some previously dry regions
where planting took place early have benefited from the spring
Meanwhile, earlier this year, the CWB signed its largest-ever deal
with China for malting barley, a deal worth $100 million at
current values in what is described as a “highly competitive and
volatile market.” It will see COFCO, the largest Chinese buyer
of Canadian grain, take at least 500,000 tonnes of malting barley
over three years, with a yearly minimum of 150,000 tonnes.
“As beer consumption continues to increase in China,
Canadian malting barley has secured an important position in
supplying Chinese brewers with high quality product,” said CWB
president and CEO Ian White, at the time. The CWB sells an
average of 400,000 tonnes of bulk malting barley to China
already each year and expects to significantly surpass that
tonnage in the current crop year.
And in the continuing battle raging over whether to retain
the CWB single desk marketing model opposed by the Canadian
Government, Western Canadian farmers have voted clearly for
its retention in the 2010 Producer Survey of 900 producers.
“The message from farmers is crystal clear,” said Allen Oberg,
CWB chair and himself a farmer from Alberta. “They want to be
firmly in charge of their marketing organization and call the
shots on its future.”
In the survey, 76% of respondents said the Canadian
Government should not eliminate the CWB without farmer
consent and the farmers also voted 79% in favour of making the
decision themselves on the ultimate fate of the CWB and not
having it made by the World Trade Organization.
“Farmers who are the most engaged and familiar with the
CWB marketing model appear to value it most,” said Oberg.
About 70% of farmers in the survey said they still supported the
Some 69% of the respondents supported retaining the single
desk for wheat, but for barley opinions were more complex and
48% prefer the CWB model for barley marketing over the open
market favoured by Ottawa. Initially, a suggested dual open
market and CWB single desk approach for barley drew 54%
support (2005), but this has dropped significantly to 39% in the
Western Canadian farmers don’t appear to be that happy
with their lot, either. In the producer survey more than 53% said
they thought “agriculture is one the wrong track, up significantly
from the 31% who held that opinion in 2009. Top farmer
concerns were the low price of wheat, the high costs of inputs
and the rail freight costs.
RAIL COSTS UNFAIR
One telling statistic from the survey was comprehensive
dissatisfaction in Western Canadian farming circles over rail
costs for transporting grain. Some 83% of farmers who voted
said that their freight costs were unreasonable.
And the CWB has just released a new and independent study
paid for by western Canadian farmers showing clearly that the
farmers are paying more than their fair share when it comes to
rail transport costs — something they have been contending for
In the past, Western Canadian farmers have called on the
government to conduct a full rail costing review to get an
accurate picture of the true cost of shipping grains. Back in
2008, the farmers accused the major rail companies of Canadian
Pacific and Canadian National of making over $100 million a year
in “unreasonably excessive returns” at the expense of Canadian
A full review of what it actually costs the rail companies to
haul grain hasn’t been conducted in Canada since 1992 and
farmers have been calling on Ottawa to conduct one. The latest
independent study done for the farmers and released 16 June
shows the picture has worsened significantly and Canadian
farmers have been paying $200 million per year more for rail
services than was considered fair under former legislation.
Prairie farmers have to move their grain more than twice the
distance to port of any other grain exporting nation —
Saskatchewan is 1,450km from the nearest port, compared with
650km for a farmer in Kansas and 280km for Australian farmers.
“Farmers were supposed to share in efficiencies in the grain
handling and transportation system from elevator and track
closings, but so far we have not,” said Greg Marshall, president of
the Agriculture Producers Association of Saskatchewan at the
rail freight study unveiling. “We need a full costing review to
determine fair costs for freight.”