There’s going to be a pile of low quality durum left in Western Canada that, for lack of better words, will need to disappear from the market.
According to the StatsCan report out earlier this week, durum production totalled 7.8 million tonnes in 2016 — up over 40 percent versus 2015.
With maybe half of it qualifying for milling grades, and around 1.1 million tonnes of carry-in from last year, there should be just enough to meet the normal export demand of around 4.5 million tonnes, explains Dwight Nichol of DLN AgVentures:
“What it does leave is well over 3 million tonnes of non-exportable quality that needs to find a home. That’s grain that’s going to be hard to find a home for, and it could take several years.”
For context, if you go back a few years, the total durum supply on hand in December would have been around 3.5 million tonnes, notes Nichol.
Looking at numbers from 2014 — the last high fusarium durum year, he says record domestic use for ethanol and feed is “still not enough to put a dent in the massive supply of poor quality that we have on the farm this year.”
“We have a real saturated poor quality market that could be trouble down the road,” he says. “Anything we can do to find demand for it, that’s the goal of the industry, whether it’s farmers or buyers.”
Dwight Nichol, based at Gravelbourg, SK, discussing the StatsCan report and durum market on RealAg Radio on Wednesday: