Rising crop volumes pose stiff challenges for exports

Question marks such as the future of corn in Western Canada have yet to be addressed in discussions about crop logistics going forward, Richardson CEO Curt Vossen says. (Dave Bedard file photo)

Winnipeg | CNS Canada — New strategies are going to be needed if Canada’s grain, pulse and oilseed crop sectors want to meet growing global food demand.

That was one of the main themes circulating through the first day of presentations here at the inaugural Canadian Global Crops Symposium.

Representatives from the pulse, canola, cereals and soybean crop industries each took turns outlining their various wish lists and strategic plans to the roughly 125 people in attendance.

Greg Porozni, chairman of Cereal Millers Canada, said government and customers see a lack of co-ordination between many of the existing cereal industry reps.

Getting a better handle on the quality characteristics that draw a premium from the market, and determining what the customer will pay, should be one of the first orders of business.

“Markets are quickly evolving; industry efforts should be focused on demands and competition of the future, not just based on historic indicators,” he said.

That sentiment was picked up by Curt Vossen, CEO of Richardson International.

Traceability and food labelling are two issues the public is big on right now, and the Canadian agricultural sector needs to be asking questions of these and other quality requirements, he said.

“Gluten-free came from almost nowhere just a few years ago, now it’s a seven- or eight-million-dollar market business on a global basis and growing.”

Questions to be looked at include: Is the customer willing to pay? Would the quality requirements being pushed by the public reduce yields? Is the market so competitive those factors have to be part of the process, regardless of the consumers’ ability to pay?

Reforming the variety registration and wheat classification systems would give greater flexibility while maintaining the industry’s ability to deliver quality characteristics to the market, he added.

The chairman of the Canola Council of Canada, Terry Youzwa, outlined his group’s main objective of increasing crop yields from the current average of 34 bushels an acre to 52 bushels an acre by 2025.

Launched earlier this year, the strategy calls for Canadian canola production to jump from an average of 15.5 million tonnes to 26 million by 2025. [Related story]

The increase, he said, will come through harvest management, integrated pest management, fertility management, plant establishment and genetic improvements.

“New demands”

Focusing on yields instead of acreage expansion will keep canola from crowding out other crops, help it maintain steady exports and preserve crop diversity, he said.

For this to happen, elevators, railways and truckers must all be ready for the coming volume, he said.

“If Canada is to reap the full benefits, Canada must get the infrastructure in place.”

One delegate asked if Canada’s ports, especially the Port of Vancouver, would be ready to deal with the looming volume requirements.

Vossen said he thought the challenges could be met, even if some questions haven’t been fully answered.

“We haven’t even talked about, what if you increase corn acres in Western Canada? Now you start to replace acres that are responsible for 40- to 50-bu./ac. yields with 150-bu./ac. yields, that’s going to put new demands on the system.”

Richard Wansbutter, a consultant for Viterra, pointed out the problems the flax industry and soybeans sectors have had with trace levels of non-approved genetically modified (GMO) products winding up in shipments to Europe.

It’s an issue exporters can’t afford to ignore moving forward, he said.

“In essence we lost that market overnight,” he said, referring to the incident in 2009 that saw Canadian flax shipments to Europe temporarily halted after residues of genetically-modified CDC Triffid wound up in what were supposed to be GMO-free shipments. [Related story]

Canada simply can’t have its supplies being questioned, he said, which is why the government’s willingness to adopt the low-level presence policy was a crucial step in alleviating the problem.
Brant Randles, CEO of Louis Dreyfus Canada, noted that in the past three years, crop producers haven’t actually seeded all the potential acres in Western Canada. So this season’s record-high harvest and resulting transportation slowdown are a good test for future years.

Biotechnology and precision farming could well make yields like last year’s the new reality going forward, he said.

— Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.


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