Price Extremes Are a Great Springboard for Public Education


It’s hard to believe that just a few years ago, people in some countries were rioting over the rising price of grain.

Production was low and competition was increasing. Natural disasters or some other phenomena had cut into supply, while biofuels and renewable fuel sources that use grain as a feedstock were starting to gain steam.

Zealots and end-of-time merchants were gaining steam too.  For example, some anti-technology groups stood on soapboxes to chide bio-fuel and bio-product supporters for what they said was taking food out of peoples’ mouths, by using land to grow renewable fuel feedstocks and bio-product raw materials instead of crops.

Others, such as militant anti-livestock advocates, warned that feeding grain to food animals was an unconscionable, inefficient way to use what precious little grain we had.

Who, they asked, would save us from shortages? And how?

Well, as usual, farmers had the answer. With support from plant breeders and scientists at institutions such as the University of Guelph and elsewhere, as well as government and industry, farmers set their sights on growing the supply.

It was clear such a course of action would bring profits down, at some point.

But people who produce food sign up to feed people, not to watch them agonize over potential shortages. The sector targeted more from less, squeezing more yield out of the same amount of land. Their efforts would include growing varieties that were already well on their way to the market — thanks to visionary plant breeders who’ve long had their ears to the ground — as well as new varieties with traits that addressed emerging diseases related to climate change and odd but persistent weather patterns.

The work is far from over. In fact, it may never be over. It takes years to develop new plant varieties. But some that were already in the pipeline are helping producers at least hold the line, even under stressful conditions like we had this growing season in many parts of Canada (the prairies, for example, where the harvest may still be the third biggest in the last decade), or do better where the growing season was not marred with cold, damper weather.

The upside of our global economy, at least from a hunger perspective, is that it’s unlikely everywhere, as in all around the world, is suffering from a poor harvest.

And that’s the way it is this year.  Poor growing conditions in Ontario and on the prairies have led to lower than anticipated yields.

But globally, many are enjoying a huge crop.

Late last week, TD Economics took a crack at putting this all in perspective. It noted how the global bumper crop for grains had led to what it calls a “massive” harvest.

That’s good for shoring up food stocks. But as farmers know, it’s hammered crop prices. Most are now sitting at four-year lows, anywhere from 30-60 per cent below their 2012 peaks, says TD.

And it’s a well-established fact that the opposite is true for livestock producers. Even 11 years after the BSE debacle, the beef market is still rebounding. A similar situation exists for hogs, which hit a low price-wise when supply outstripped demand a few years ago. Now, the tables have turned, and instead of record lows, we’re seeing record highs. Coupled with cheap grains prices, this is finally a chance for livestock producers to exhale.

TD says this “tale of two markets” will continue for Canada. It forecasts a bright future for export-oriented farmers, which includes most large farming operations in the country. The prospect of recent trade agreements abroad, and re-opened borders that held BSE-related restrictions against Canada for way too long, should provide increased opportunities for Canadian farmers to compete in foreign markets, according to the bank.

How’s the public going to take all this? In stride, I suspect, especially if agriculture takes this as an opportunity to do some public education about why profitable farms are actually a good thing. There’ll be some hue and cry as consumer prices inch up. But I think many people are starting to realize the importance of a buoyant farm economy in Canada – at least, those who follow the business section of any media get it. And despite rising beef prices in the summer, I didn’t sense outrage from the BBQ crowd, as some observers were predicting.

Public tolerance or acceptance of rising prices is more likely when people don’t envision farmers lighting cigars with $100 bills. Of course, the truth is many producers grow crops too, so the gains made in livestock prices may be offset by the hit taken on crops.

But like the TD report suggests, one thing farmers are used to is change. Perhaps adaption to climate change is still a work in progress, but adaption to almost everything else is firmly in place.

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