Record grain prices: the Prairies hope to benefit

Canola, wheat, oats, soybeans and flax: in Delmas in northwestern Saskatchewan, farmer Martin Prince’s seeds are not yet in the ground and the harvest is already eagerly awaited.

The market needs what we have to produce and it encourages us to try to increase productionhe immediately admits as he welcomes us to his home a few days before the sowing season.

The value of wheat and canola, for example, has doubled over the past two years. Except that, to meet demand, the room for maneuver of Canadian producers remains slim.

Martin Prince estimates that he can at best increase his wheat production by about 10% this year.

This is because the seeds are planned months, even years in advance, and above all they must follow a rotation essential to the health of the soil.

” Maybe I can increase a little bit [ma production] oats to the detriment of wheat, or vice versa, but I’m not going to put canola instead of wheat because that would go against what I want to seek in terms of good land management. »

In this context, it is impossible for Canada to compensate on its own for the anticipated production losses in Ukraine and Russia.

Nearly 30% of the world’s wheat production comes from this region of the world. This is a substantial proportion of the global supply that may need to be replacedrecalls Erin Gowriluk, director of the Grain Growers of Canada, the national association which represents some 65,000 farmers.

While prices are attractive to farmers, expenses have also kept pace with inflation.

The price of fertilizer, which can easily account for a quarter of a producer’s total expenses, has also doubled.

Growers will be planting what is expected to be the most expensive crop to produce these days, all with an unprecedented level of risk in the global market and the weather.underlines Erin Gowriluk.

She recalls that many producers suffered one of their worst years last year due to the historic drought that hit the Prairies.

Unknowns, more unknowns

In Ukraine too, it is the season for seeds, but with the war still raging, it is impossible to know how much production will be disrupted.

Whatever harvests there, Canadian producers will play a crucial role in world markets, says Jean-Philippe Gervais, vice-president and chief economist of Farm Credit Canada, a crown corporation that acts as a financial institution. .

According to him, after the production of 2022, there is an opportunity for Canada play a key role in food security.

Luck could smile on the farmers here, but Mother Nature still has to collaborate. After last year’s catastrophic drought, it’s not just growers hoping for a normal season.

” We need a production, all in all, at least average compared to past years and ideally higher to see some return of the price pendulum. But even there, it might not be enough, since at the start of the year there was already a shortage of certain commodities. »

And the markets could remain volatile for some time to come. Jean-Philippe Gervais cannot rule out further increases in grain prices.

I can’t say at this moment that we have reached a certain stability, I also expect volatility for the next few months […] Weather is going to be very, very, very important in North Americahe points out.

Lessons to be learned?

On his farm, Martin Prince acknowledges that inflation hurts everyone, but he believes rising food prices may serve to remind Canadians of the importance of agriculture in their lives.

In Canada […] we have been blessed with an abundance of production for many years […] Perhaps it was time that we put the value back on these food expenses in order to eat well and to respect it by perhaps reducing the waste that there could be.

War, drought, pandemic or inflation are all uncertainties producers are used to dealing with.

There are obstacles every year, we don’t know them in advance, but we know there will be some, philosopher Martin Prince. This time, it is consumers’ turn to feel the consequences of these unforeseen events.