26 February 1999

CANADIAN PRAIRIES

FEEL CHILL WIND OF CHANGE

Margins are under pressure on UK arable farms. In Canadas bread basket the

heat is on too. Stephen Leahy finds out how farmers there are responding

CHANGE is sweeping through the farming industry on the Canadian Prairies, just like the relentless winds that roll across this 50m ha (125m acres) heartland of world arable farming.

Last year 15m ha (37m acres) of wheat and barley was grown, with three-quarters of the crop destined for export.

But with Asias financial implosion, the second biggest world wheat crop and renewed EU-US subsidy battles, prices have fallen more than 40%.

At the same time input costs are up and transport costs have doubled or tripled since the government ended its C$540m (£214m) annual subsidy programme two years ago.

Major changes are also being made to the 65-year-old Canadian Wheat Board.

The CWB is both a grain company and farmers co-operative with a legal monopoly on all the marketing of wheat and barley grown in western Canada for domestic human consumption or export.

Starting next year, 10 elected farmer-directors will make up the CWBs new 15-member board of directors. Many of those running for election want to end the boards monopoly, although that requires a vote by the 114,000 grain grower members.

Despite the lowest wheat plantings in 25 years, the board still expects to export 15 million tonnes in 1998-99. But that is well down on the five-year average of 20Mt.

"Price has a big impact on seeded area," says CWB market analyst Larry Sawatzky. Total wheat area was down 24% to about 10m ha last year. With even poorer prices for durum and spring wheat, the crop may no longer be undisputed king of the prairies. Oilseed rape offers a much better return, prompting a rise in sowings to almost 6 million ha last year.

WEATHERS EXTREME

WEATHER plays the biggest part in the success of crops grown in the agriculturally-unfriendly prairie climate. Temperatures range from 40C to -50C and rainfall varies greatly.

"It was so dry last spring, the 5in of snow we got in early June actually helped," says Sheldon Cooper. He farms 1620ha (4000 acres) with two brothers and an uncle in the geographic centre of the prairies, near West Bond, Saskatchewan.

The land is flat and pock-marked with depressions that usually remain water-filled. The soil is a black clay-loam, only 10-13cm (4-5in) deep with about 7% organic matter.

Last year cereals accounted for less than one-third of the Coopers planting. That was about the minimum possible within the rotation, the balance going into better paying crops such as green and yellow peas, oats and oilseed rape.

Despite good wheat and barley yields of 2-2.7t/ha (16-22cwt/acre) and 2.4-1.6t/ha (19-13cwt/acre) respectively, the Coopers continue to reduce their grain area because of poor prices and higher costs.

This year, herbicide and fertiliser costs averaged about £50/ha (£20/acre), while insecticide, including aerial spraying for wheat midge outbreaks, added another £14/ha (£6/acre).

Transport is a major issue, freight bills rising from £4/t to £14/t in the two years since the end of the Western Grain Transportation Subsidy.

After transportation costs, he is getting just £24/t for barley and £44/t for wheat.

Although Mr Cooper says this will be a poor year by prairie standards, he and his family have been fairly successful.

He attributes some of this to joint ownership of equipment and being part of a marketing club with 20 other farmers. It recently invested £59,500 in a direct drill.

There is also a willingness to try new crops like peas and employ new practices like modifying no-till drilling techniques to suit this area of low soil temperatures.

However, Mr Cooper says that is not enough at a time of continuing low commodity prices, increasing costs and dwindling government subsidies. Although land costs just £13,900 for a quarter-section of 65ha (160 acres), farming more land is not the answer. "We need higher value for our crops," he says.

Growing higher-value spices and herbs was considered. Instead, the three brothers invested in commercial seed cleaning equipment to improve the value of their current crops and develop another source of income by providing the service to other farmers.

The final source of income is Mrs Coopers off-farm job, 100 miles away in Regina. Off-farm income is a necessity for most farm families, even when grain prices were higher.

SHORTFALL IN PROFITS

FARM profits have never been enough to support the whole family, says Nettie Wiebe who farms 565ha (1400 acres) with her husband Jim Robbins near Laura, Saskatchewan.

"Despite our production increase, input costs always outstrip the price of commodities." She also has an off-farm job as the elected president of the National Farmers Union.

Although only 250km west of the Coopers, the land here is flatter, drier and prone to salinity. White salt-rimmed fields lie to the north, while sand hills border the area to the south.

After a very unusual winter with little snow, the first real rain didnt fall until June 16 last year, severely affecting germination. That was followed by a hot and dry July and August.

"We have less than half the grain we had last year, but we worked harder and our input costs were higher," says Ms Wiebe.

Normally a good wheat growing region 200ha (510 acres) was planted to hard red spring wheat and 175ha (440 acres) of malting barley.

The balance of the rotation included 160ha (100 acres) of lentils and peas and some oats. The barley was so bad it was taken as green feed. Wheat yields were poor with the best areas producing only 1.5t/ha (12cwt/acre), well below the 2.5t/ha (20cwt/acre) norm for Saskatchewans top producers.

Some farms didnt plant wheat at all, some for the first time since the thin prairie soil felt the bite of a ploughshare.

Whether more or less grain is planted in future depends on price – and whether there are better paying crop alternatives. "Wheat is the nicest crop to grow, and best suited to the prairies," admits Ms Wiebe.

In an effort to diversify a 40 head cow-calf operation was started a few years ago on the poorer land. But they nearly had to sell off part of the herd because the pasture was so dry. It is a far larger factor than any piece of technique or technology, including biotechnology, she says.

For the past five years they have been trying to reduce their inputs by using organic methods on one quarter-section of 65ha (160 acres). It has had mixed success with weed problems forcing some into summer fallow. "That makes it difficult to grow pulse crops like lentils and peas and we need them in our rotation for our soil."

Like Mr Cooper, Ms Wiebe believes that more land is not the answer to low incomes. Farms are already big – 550ha (1340 acres) is the average.

The real problem facing grain farmers is that raw products are not valued. "Wheat is not valuable, but a bagel is."

Part of the response is to diversify and find ways to add value such as seed cleaning and bagging. But that wont be enough, she says. Nor does it address the fact that soil, the farmers labour and the grain itself are undervalued.

A SWITCH TO PIGS…

SHIPPING trucks filled with pigs rather than railcars filled with grain is Manitoba farmer Larry Maguires personal response to low prices.

With several partners he built a 1600-sow farrowing operation a year ago in the low hills of south-west Manitoba. It is the only such operation in the region, but others are set to follow suit.

At Elgin, Manitoba Mr Maguire farms 2000ha (5000 acres). Last year he planted his lowest wheat area ever, with just 400ha (1000 acres).

Good prices for oilseed rape meant he grew all he could – 800ha (2000 acres). The rest of his land went into feed barley, oats, peas and flax, plus winter rye.

Mr Maguire, head of the Western Canadian Wheat Growers Association, is keen on diversification. But he would grow more wheat and barley without the Canadian Wheat Board monopoly.

In village coffee shops scattered every 50km or so across what was once the bottom of a great glacial sea, there is general agreement that wheat belongs on the prairies. It is finding a way to make a living at it that is up in the air. &#42

PRAIRIEPRODUCERS

&#8226 15m ha of wheat and barley grown.

&#8226 75% of grain exported.

&#8226 Transport costs up from £4/t to £14/t.

&#8226 Land costs £540/ha (£219/acre).

&#8226 Average wheat yield 2.5t/ha – only 1.5t/ha last year.

&#8226 Wheat price £44/t, barley £24/t after transport.

&#8226 £6350 average net farm income last year – as in 1980.

&#8226 Good oilseed rape margins – area booming.

&#8226 Canadian Wheat Board under threat.

£1=C$2.52.