Opportunity in wheat for Canadian producers: FCC

The global commodity trade is facing headwinds this year, but that’s an opportunity for an export-driven ag producer like Canada.

That’s according to Farm Credit Canada, which put out its grain, oilseed and pulse forecast for the year last month.

Canada’s a net exporter and many countries that are net importers are likely to stay that way, FCC noted. In particular, countries like Indonesia and the Philippines consume far more wheat than they produce and that’s expected to grow. Canada can’t compete with Russia or the EU when it comes to wheat production, but we do produce more wheat relative to how much we consume than anyone else. That puts us in a good spot to take advantage of demand.

To boot, Canada has floated the idea of a trade deal to Indonesia, the world’s fourth-most populated country, and Russia is looking at an import tax on wheat to stabilize domestic supply, according to FCC.

The concern here is contraction. If COVID-19 or the efforts to control it hit people’s wallets, that can play out two ways: Best-case scenario is they spend more to ensure they have enough to eat, an opportunity for Canada to meet that need. Worst-case scenario is increased food insecurity. Likely there’ll be some of both.