All it took were above-average crops to see the crisis disappear from the urban press.
As 2008 comes to a close we can look back wistfully at the issues that have come and gone this year. Agriculture politics and public opinion dominated much of the year, some of which was unanticipated, some of it self-inflicted.
We saw much angst in the urban press earlier in the year when grain and oilseed prices seemed to skyrocket. Food prices rose, but in most cases they were out of sync as processors seemed to take advantage of an economic opportunity that could be blamed on someone else. Curiously, but not unexpectantly, food prices have not declined to any extent since the decrease in grain and oilseed prices later in this year.
The underlying attitude of urban opinion was that high food prices were somehow unfair to consumers and that growers were rolling in cash thanks to double-digit price increases to farmers. Virtually nowhere was it said that if inflation was factored into prices for grains and oilseeds they were still far below what they should be. A positive side effect of the so called “food crisis” was that the image and potential of GM plants was much improved.
Opinion was that only significant technological change could increase the world’s food supply. Those that zealously promote organic production were reminded that such a practice reduces production and increases costs to consumers. Even that determined opponent of genetically engineered (GE) technology, the European Union, found itself in an animal feed shortage as the non-GE supply disappeared. In what must be a classic case of irony – a recent shipment of non-GE animal feed to Europe from China was refused because it was found to be contaminated with melamine. Somehow GE feed now seems a lot safer.
Notwithstanding all the fearmongering about a food shortage, all it took were above-average crops to see the crisis disappear from the urban press. The fact that farmers are now receiving much lower prices is not considered to be a concern for consumers.
In Alberta, cattle and hog producers continue to see their industries hammered from every angle. It seems that sector can’t win for losing. At the beginning of the year it was high feed and energy prices and a high dollar that battered producers. When that situation began to moderate and return hope, American COOL legislation hit exports. The result has seen a steady increase in hog and cattle producers exiting the business.
The Alberta government’s answer was to encourage the production and marketing of age-verified, traceable premium meat products. That’s a long-term plan at best. What throws a wrench in such schemes is the behaviour of the free market. If the market sees prices increase by say 30 per cent and buyers are scrambling for supply, all premium marketing schemes seem to be no longer of much concern. As with the grain and oilseeds sector, higher prices seem to be the guaranteed cure-all.
But as the year comes to a close we see some interesting developments. American hog producers are importing feed grains from offshore. How interesting it must be to see ships loaded with American feed grain for export pass by ships loaded with feed grain for U. S. import.
We are not immune to such a quandary in Canada. We see grain growers banding together to import shiploads of fertilizer from offshore, whilst our own fertilizer manufacturers are busily exporting Canadian-produced fertilizer to offshore markets.
As this edition goes to print we see Parliament in crisis. From an Alberta perspective there is the spectre of an eastern coalition taking power and eliminating any political power from this province. No matter what happens in Ottawa, the crisis is good news for Canadian Wheat Board supporters. If a coalition takes power, the CWB is safe for the time being thanks to its Liberal and NDP friends. If the Conservatives cling to power, it is unlikely a chastised government will want to provoke the opposition with CWB issues which are of no concern to 99 per cent of the voters.
There is one bright note. Federal Agriculture Minister Ritz has been successful in getting the government to initiate a WTO trade action against the American COOL legislation. That’s good symbolism if nothing else. However, if the softwood trade dispute is any example, not only will it take years for a decision, but when Americans don’t like the outcome you end up losing even if you think you have won. As always we can hope.