3 myths about Canadian agriculture: Busted!

In the spirit of April’s Fools Day, I’d like to submit three ‘myths’ to some analytical rigor, in an unabashed testament to the diversity and resilience of Canadian agriculture.

Myth 1: Western Canadian ag relies on wheat and canola

Of all major wheat producer-exporters in 2014-15, Canada was the world’s second largest single-country producer and amazingly, its largest exporter of wheat. Canada is expected to dominate 2014-15’s global exports of canola products with roughly 60% of the world’s total exports of seed, oil and meal.

Busted! Canada’s Prairie provinces are now a leader in producing pulses too. The vast majority of Canada’s lentils come from Saskatchewan, not coincidentally also the world’s largest exporter of lentils and chickpeas. Between 2011 and 2015, the area on the prairies harvested in pulses grew much faster (52.3%) than did either the hectares of wheat (14.5%) or canola (6.9%). 

Myth 2: In the east, it’s corn as far as the eye can see…

Busted! While its prominence has diminished only slightly (in 2014, 21% of seeded acres were corn), growth in soybean plantings has skyrocketed at the same time – from 5% to 23% of seeded acres. But with Canadian producers looking at lower commodities prices and higher prices for fruits and vegetables in 2016, we may see another shift in acres planted. The number of hectares planted in field vegetables jumped in 2013, from 63,111 to 70,112. With profits more likely in these crops in 2016, another shift upwards may occur.

Myth 3: Retail food prices are a good reflection of farm prices

Busted! As an example, the price of live Canadian cattle and the price for beef at the Canadian supermarket can sometimes move together. Between 2011 and late 2013, the two prices moved at similar rates. However, that’s not always the case (as shown in the graph below between 2014 and 2016). Retail prices don’t have to reflect what’s going on at the primary production level given that retailers have costs beyond the price of raw commodities.

In Canada, retail prices have increased for red meat, even as prices for cattle have most recently come down. In Q2, 2015, the price of Alberta fed steers hit a high of C$200.90/CWT (or “per hundred weight” unit of measure), narrowing the gap between live cattle and the average beef retail price (converted here to a comparable CWT). The record highs for cattle were due to supplies being restricted with the smallest North American herd in about 50 years. But, even with the U.S. herd rebuilding, and the price of cattle declining by Q3 of 2015, beef prices at the store remained high and even increased slightly (to C$868.50/CWT), reflecting changes in other costs.