The International Grains Council’s (IGC) projection for Canada’s total 2018-19 grains production is 58.6 million tonnes, up from 56.2 million the year before. The IGC forecasts total Canadian wheat production in 2018-19 at 31.2 million tonnes, up from 30 million the year before. Maize (corn) production in 2018-19 is put at 15.3 million tonnes, up from 14.1 million tonnes the year before. The barley crop will be 8.2 million tonnes, according to the IGC, up from 7.9 million the previous year. Oat production in 2018-19 will be 3.5 million tonnes, down from 3.7 million the year before. Rye production is forecast at an unchanged 300,000 tonnes.
Total Canadian grain imports will be 26.7 million tonnes in 2018-19, up from 25.2 million in 2017-18, while imports in 2018-19 will be 900,000 tonnes, down from 1.5 million the previous year, according to the IGC. It forecasts wheat exports at 22.5 million tonnes in 2018-19, while exports the previous year were 22 million. Imports of wheat are too small for the IGC to quote. Canada’s maize exports are forecast at 1.6 million tonnes, up from 1.4 million the year before with maize imports at 900,000 tonnes, unchanged from the previous year. Barley exports are expected to be 1.6 million tonnes in 2018-19, with exports the previous year at 2 million. Barley shipped abroad includes 900,000 tonnes for malting and 700,000 for feed in 2018-19, with 700,000 tonnes for malting and 1.3 million for feed the year before.
The USDA attaché’s annual report on the grains sector in Canada explains that the country’s wheat is of high quality.
“Approximately 95% of the MY 2017-18 Canadian Western Red Spring (CWRS) crop was graded in the top two milling categories,” the report, published in April, said. “The average CWRS protein level (all grades) was 13.0%, slightly below the 13.4% 10-year average.”
The report explained that more than 75% of Canadian wheat production is CWRS.
“The Canadian Prairie Spring Red (CPSR) crop exactly matched the 12.1% 10-year average,” the USDA said.
One problem for Canadian exporters has been disruption of rail transport, which the report said peaked as there was a sharp (43% on the year) fall in exports in February.
“The decrease coincided with the peak of accumulated, backlogged export shipments following a months-long rail transportation disruption,” the USDA said. “Canadian producers have been voicing their concerns about the rail disruption since September 2017. Despite recent improvements, producers claim foreign buyers are replacing imports of Canadian wheat with wheat from Australia and elsewhere.”
A March attaché report on the rail situation explained that “beginning in September 2017, increased demand from intermodal freight shipments and fracking sand from Wisconsin have caused a shortage of locomotives and crews on Canada’s two Class I rail lines — Canadian Pacific (CP) and the Canadian National Railway Company (CN).”
The report noted extreme cold weather across the prairies, heavy snowfall, and a strong 2017 harvest have exacerbated rail capacity issues, backlogging shipments of oilseeds, grains and pulses out of Thunder Bay, Vancouver, and Prince Rupert.
More recently, on May 25, the attaché reported that Canada had, on May 23, “enacted a sweeping legislative update intended to improve Canadian grain shippers’ access to rail services and mitigate uncertainty caused by the expiration of regulations in late 2017.”
The new law imposes weekly price data and performance metric reporting requirements on CN and CP “and will allow grain shippers to seek reciprocal financial penalties for rail carriers’ failure to provide service,” the report said.
Milling and oilseeds
According to figures cited by the Canadian National Millers Association, there are some 48 wheat and 7 oat mills in Canada. They process approximately 3.1 million tonnes a year and produce around 2.4 million tonnes of flour and milled wheat products.
Canada is a large-scale oilseed producer and trader. It is the world’s biggest grower of canola, forecast by the IGC to produce 20 million tonnes in 2018-19, down from 21.3 million the year before. Canada is the biggest canola exporter, forecast to sell 11.5 million tonnes abroad in 2018-19, up from 11.3 million the year before. The country is also set to produce 7.5 million tonnes of soybeans in 2018-19, down from 7.7 million the year before. Canada’s soybean exports are forecast at 5.3 million tonnes in 2018-19, up from 5.2 million the previous year, with imports unchanged at 300,000 tonnes.
Oilseeds are proving popular with farmers. The attaché’s annual report on the sector, published in March, noted that Canadian area seeded to canola in marketing year 2017-18 exceeded area seeded to wheat for the first time ever.
“Strong canola returns continued to extend crop rotation decisions and draw area from wheat and other grains into canola,” the report said.
The report also pointed out that the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which Canada signed on March 8, will expand Canada’s access to valuable oilseed markets in the Asia Pacific region as well as “growing value-added oilseed processing in Canada and altering Canadian oilseed and products export composition in the years ahead.”
“Canada is highly dependent on export markets, with 50% to 60% of canola seed exported abroad,” the attaché noted. “CPTPP will not have an impact on the MY 2018-19 forecast, because the entry-into-force date will be well into or after the crop year.”
On soybean production, the attaché reported that “producers are increasingly seeding soybeans on land traditionally sown to wheat, particularly in Manitoba, where area seeded to soybeans has grown significantly and is currently approaching the total area seeded in Canada’s leading producer, Ontario, six years ago.”
Exports of soybeans to China were up 55% in 2016-17, “and are expected to continue to grow in order to meet a soaring appetite for soymeal in animal feed.” Canada’s soybean crushing capacity is estimated at 3.2 million tonnes.
“There are two crushing plants in Ontario that crush canola and soybeans, and one plant in Quebec that also crushes both canola and soybeans,” the report said. “While there are discussions of building a soybean crush facility in the Canadian Prairies, there are currently no plans to do so.
Biotech and biofuels
The attaché put Canadian genetically engineered crop area at 12.53 million hectares for 2017, up 17% from 2016. The GE crops grown are mainly canola, soybeans, corn, sugar beets and some alfalfa. In April, the USDA attaché produced a forecast of 3% growth in fuel ethanol production in 2017, bringing it to 1.790 billion liters.
“Production growth has been largely attributed to a change in feedstocks at one facility and increased capacity at two ethanol facilities,” a report on the sector said.
With more capacity expected to come on line, the USDA forecast Canadian ethanol capacity to reach 1.970 billion liters in 2018.
“Canadian federal blending requirements in excess of 2 billion liters of fuel grade ethanol continued to outstrip Canadian fuel ethanol production in 2016, sustaining imports of 1.103 billion liters,” the report said.
Most Canadian ethanol is produced from maize and wheat, although some cellulosic ethanol production from wood waste and municipal solid waste has started. Canada produces biodiesel from canola, animal fat and recycled oils. Production of biodiesel is more than needed for blended mandate requirements, but Canada still imports biodiesel because it exports most of its production to the United States.