From what I was told, Chile does not export any wheat and uses the entire wheat production within the country. This enables Chilean farmers to receive CBOT plus freight for their grain.
As many of you who visit www.realagriculture.comalready know, I just returned from a trip to Chile where I visited many different Chilean agricultural operations. I was gone for 10 days and learned a lot about this great South American country. Many people have been quizzing me on the specifics of what I learned on my trip and what were the highlights. There were many highlights and moments of extensive leaning, and in a few cases my eyes were opened. Here is a snapshot summary of some of the observations that I made while in Chile.
THE SEED INDUSTRY IS GLOBAL
Many North American seed companies grow seed crops in Chile during our winter so they can bulk up seed supplies. Having access to this “contra season” allows seed companies
to better manage their inventory based on spring sales and manage geographic risk. All commercial production is non-GMO in Chile, while seed production can be GMO with strict handling provisions. With seed moving out of Chile to all over the world, it has made Chile a base for many seed production projects. I saw seed corn, canola, sunflower and soybean fields, depending where you were in the country. Much of the corn is in the north around Santiago while the
canola production is in the south, around Temuco.
CHILEANS HAVE COST OF PRODUCTION ADVANTAGES
After visiting Chile, it is firmly cemented in my mind that Canadian farmers cannot compete on a cost of production basis. Chile has a low cost of living comes low wages relative to North America. Canada can compete with countries like Chile based on our utilization of technology to engage efficiency. One characteristic of developing countries is that they do not have a firm grasp of efficiency due to lack of technology and their access to cheap labour. As Canadians, our ability to manage identity preserved and extensive quality management systems are what we need to focus on if we are going to go head to head with South America.
ACCESS TO CREDIT A CONCERN
I was fortunate to have dinner with a Chilean family who farmed outside of Temuco. We had a great night of talking agriculture and swapping stories and sharing ideas. It was very clear that one of the first concerns for Chilean farmers right now is access to credit. I think that access to credit for farmers is becoming more and more of an issue all the time across the globe. It concerns me greatly that if farmers cannot access credit, what affect is that going to have on the global food supply?
GREAT YIELDS WITH SUBSTANDARD EQUIPMENT
As you travel the countryside you quickly notice that a lot of the land is farmed with equipment that Canadians used in the 1800s. In the back country, transporting goods with ox and cart is not uncommon. Oxen also pull cultivators on some farms. In huge contrast, I saw new front-wheel assists pulling around grain carts. In Chile, the question is not whether you buy red or green. It’s whether you have a tractor or still use real horsepower to do your farming. This is what makes countries like Chile so interesting. In a minute you can experience modern corn seed production and the next you feel like you’ve traveled back to the 1800s.
Most of the modern equipment is still quite old, by our standards. But even with some of this 30-year-old equipment, Chilean farmers are achieving 100-bushel-per-acre spring wheat yields.
NO ON-FARM STORAGE
I probably visited over 10 Chilean farmyards and one thing stands out immediately. Nobody has on farm storage for grain. All of the harvested grain is hauled directly from the field to the grain mill. Long line ups at the mill are common as everyone wants to deliver product at the same time. Can you imagine if in Canada if we had no on farm storage and had to deliver directly off the combine? We would have lineups from Calgary to Vulcan. The other related observation is that Chile has many grain company sites scattered across the country. No large cement structures line the railway. From what I was told, Chile does not export any wheat and uses the entire wheat production within the country. This enables Chilean farmers to receive CBOT plus freight for their grain.
Chile is a great country with fantastic people involved in agriculture. I had a great time meeting the people and getting a better understanding of the challenges and opportunities that farmers face. Many times when we talk about South American agriculture, we always discuss Argentina and Brazil. Chile does not have the same amount of arable land as either of those countries, but they do have a very successful seed production industry and farms are slowly modernizing. Go to www.realagriculture.comif you want to see some of the pictures and videos from my trip.
Shaun Haney publishes the Haney Farms Quarterly and his blog, which can be found at www.realagriculture.com.Haney Farms is located in Picture Butte, Alta., and is involved in the grain, seed and beef business. You can contact Shaun at 1-877-738-4517 or [email protected]