US: Wheat production may move to Canada

The fate of the American wheat belt is in doubt, analysts say. American wheat producers are concerned that a number of problems facing the sector could lead to the shift of crops to Canada. But in Canada, crop rotations are already established, so farmers may not be enthusiastic about adding more wheat acres.

The National Wheat Growers Association of the United States is concerned that production of an important grain could move to Canada, writes Canadian agro-analyst Sean Pratt in an article published by the Canadian agricultural portal Alberta Farmer Express.

“I would be absolutely heartbroken if we lost the wheat industry here in the U.S. the way we lost the oat industry. “I’m concerned that we’re going down a path that’s pushing the wheat industry out of Canada because we’re giving economic advantages to other commodities,” NAWG CEO Chandler Gool said on a recent Agri-Pulse Open Mic podcast.

Gool said U.S. wheat faces “additional hurdles” that competing crops don’t. The most serious problem is that wheat is effectively excluded from participating in the thriving U.S. biofuels industry, which is the “lifeblood” of corn and soybeans.

“Unfortunately, our little kernel of wheat doesn’t have enough sugar or anything else in it to make us a viable commodity for renewable fuel assistance,” he told Open Mic podcast host Jeff Nally.

As a result, wheat is losing ground to corn and soybeans in the northern U.S. Plains because those crops are more profitable and have more supply options.

Gul is particularly concerned about what will happen when sustainable aviation fuel (SAF) is introduced. SAF producers are currently exploring canola and camelina as possible feedstocks, and those crops are likely to take up even more acreage at the expense of wheat. “This year, U.S. farmers are set to plant 45.35 million acres of wheat. That’s down from the 62.55 million acres planted 25 years ago,” he said.

On the other hand, Darcy Pawlick, executive director of the Wheat Growers Association of Canada, thinks it’s unlikely that Canada will steal U.S. wheat acreage because Canada has established crop rotations.

“It’s unlikely that our acreage will fluctuate or change,” he said.

He believes the decades-long decline in U.S. wheat acreage has bottomed out. The crop may give way to camelina and canola a little, but not much.

There is one factor that could change that, however. Wheat prices have been supported by the Russia-Ukraine conflict, which has removed a large supply of wheat from the export market. And once the conflict is over, that product will eventually return to the market, which could further undermine U.S. wheat acres, primarily in spring wheat. That already presents new opportunities for farmers in western Canada.

Polick says Cereals Canada will need to take advantage of any weakness in the U.S. wheat market by taking advantage of opportunities in markets that value high-quality wheat, such as Europe, Asia, and Africa.

That will be difficult, however, because U.S. Wheat Associates has offices around the world, giving the United States a powerful marketing advantage over Canada.

Gul noted that another major obstacle for U.S. farmers is the lack of GM seed technology in the wheat sector, which is a food crop that is subject to greater consumer scrutiny than corn and soybeans. Half of the U.S. wheat crop is exported annually to GMO-sensitive markets in the European Union and the Asia-Pacific region. “Hybrid wheat is a solution, but it’s still a slower process than if we could adopt genetic engineering like our soybean and corn farmers have done,” he said. However, according to Paulick, the situation is much worse in Canada, where private investment in wheat breeding is extremely limited. For example, the Americans have embraced hybrid wheat, while Canada is not doing much on that front. “The Americans have a lot of advantages over us. We are a little bit behind. We have to catch up. But we will get there. “Canadian plant breeders have a very limited set of technological tools, but there are promising new breeding technologies, such as gene editing, that can help close the gap. Canada has the opportunity to catch up quickly once we have an environment in which the private sector is happy to operate,” he said.

Gul noted that another obstacle for American farmers is the trade wars that U.S. President Donald Trump has started with various countries. He worries that if Trump imposes tariffs on Mexican products, the country could impose retaliatory tariffs on U.S. agricultural products. This would be serious, since Mexico is the largest buyer of American wheat. The overall situation is such that American wheat farmers are already faced with falling grain prices, rising production costs, inadequate pesticide regulation, and fewer shipping points compared to corn and soybeans; they do not need additional problems, the expert concluded.

Tags: Canada, wheat, USA