Winnipeg Free Press - PRINT EDITION
Wheat getting star treatment these days
Canola is losing its shine as Canada's chosen one
After years of riding an exploding world demand for vegetable oil to become the star crop in Western Canada, there are signs canola is starting to lose ground -- literally.
Higher wheat prices and newer crop options such as soybeans and pulses are prompting farmers to pull acres out of canola, which is good news agronomically. The crop is supposed to be grown only one year in four in the same field, but in recent years there have been jokes about the "canola-snow-canola" rotation.
A combination of better varieties and easier weed control allowed a leap in yields a few years back, but the gains have been edging downward over the past 15 years or so. Farmers aren't getting the yield boosts they should be getting from the new technology, likely due to agronomic and environmental constraints.
And although canola is widely touted as Canada's most lucrative crop, that assessment is based only on the cash-receipts side of the equation. It is also an expensive crop to grow. Wheat, grain corn, soybeans --even grass seed -- can potentially put more dollars in a savvy farmer's pocket these days.
In short, this pullback doesn't bode well for the Canola Council of Canada's arbitrary target of sustainably achieving 15 million tonnes of production by 2015, but slower growth could prove to be more sustainable.
Right now, wheat is looking pretty sexy, boasting the newly opened market, some high-rolling prices and commitments of renewed investment in varietal development by the private sector.
A senior Syngenta official told the annual Wild Oats Grain World conference last week the companies are chasing new varieties, such as hybrids, that could boost wheat yields by up to 20 per cent by 2020.
That brings questions about quality to the fore, particularly for wheat.
With a relatively short, intense growing season to work with, Western Canada has historically hung its export-wheat-marketing reputation on bread-making qualities such as high protein and other processing characteristics rather than quantity. The two tend to be inversely related when it comes to yield.
And because of the single-desk marketing system under the former Canadian Wheat Board, customers buying wheat from Canada knew they were getting Canadian wheat and it would perform consistently in their milling and baking systems. Even though there are more than two dozen varieties of wheat in the flagship Canada Western Red Spring (CWRS) class, they all behave similarly in processing. This approach is unique in the world and forms the basis of the Canadian quality wheat brand.
But getting a variety into that class is an onerous task, currently requiring three years of field trials to ensure it conforms to the class standards for quality, agronomic performance and disease resistance.
Now that the market has opened up, there's pressure from the international grain traders as well as from some farmers to free up the registration system, too. Many farmers would prefer to be growing American varieties of wheat, which don't conform to the Canadian classification system, but which are purported to be higher yielding.
Meanwhile, some grain traders are suggesting Canadian quality standards need to be harmonized with the U.S. so customers aren't "confused."
What that really means is they are in the commodity business, in which wheat is wheat, no matter where it comes from -- not the national brand-name business. They also want grain elevators to handle fewer commodities to make the handling system more efficient.
The federal government is all ears. When the committees that assess which new varieties of various crops should be approved for production in Canada met in Saskatoon last week, they were greeted with a letter from Agriculture Minister Gerry Ritz asking them to consider how they can streamline the process, reduce data requirements, reconsider merit assessments and allow greater representation from value-chain representatives.
Whether all this is good, bad or indifferent depends on who is talking. But there's no denying last year's changes to the wheat marketing system are just the tip of the iceberg.
Laura Rance is editor of the Manitoba Co-operator. She can be reached at 204-792-4382 or by email: email@example.com
Republished from the Winnipeg Free Press print edition March 2, 2013 B11
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WINNIPEG - Closing prices:
Canola: Jan. '14 $11.40 lower $454.90; March '14 $11.20 lower $465.10; May '14 $11.30 lower $473.90; July ...