Recent History – 2000
Oct. 27, 2000
By Mark Nielsen, Daily News Staff
Peace grain growers are struggling to find a market for a sub-par product thanks to a summer of inclement weather.
“I think we had just about everything this year,” Jim Smolik said of the weather. The president of the B.C. Grain Producers Association said the summer was uncharacteristically cold and further exacerbated by frost, hail, drought, heavy rain, and an early snowfall.
The weather not only led to poor quality grain, but a delay in harvesting as well.
“The cold summer really kept the crop from maturing quickly which pushed us back in time and the fine seed harvest rolled into the cereals harvest,” Smolik said “It’s made it a tough go.”
Most of the harvesting is done now, however. Smolik was busy Thursday putting on the winter fertilizer, but the poor weather has meant a wet crop that is susceptible to spoilage.
The bad weather has also meant a low quality product, preventing Peace farmers from capitalizing on renewed demand for high-quality, high-protein grain. Instead, they’ve been forced to sell their harvest as feed grain, glutting an already well-supplied feed grain market.
The pool return outlook had the price for number one Canadian Western Red Spring, which is the benchmark strain for prairie producers, pegged at $3.16-$3.90 per bushel.
But the reduced quality means that farmers are looking at a price of $1.64 to $2.40 per bushel for feed grain thanks to an abundance already created by other sources such as certain types of barley.
“Anytime you get in to where you have a lot of feed grain around, it becomes a buyers’ market because there is the additional wheat added to what is traditionally grown for feed,” Smolik said.
It’s yet another in a continuing series of poor years, hampered by either poor weather or low prices. Government support has been limited too.
The prime instrument for helping farmers has been the Agriculture Income Disaster Assistance (AIDA) program, which is administered in B.C. through the Whole Farm Insurance Program (WFIP).
Smolik said such programs are great at helping producers over the short term, but it’s a different story when a string of bad years are put together.
That’s because support from AIDA is based on the average income from the three previous years.
“The program is not designed for commodities like grain that are in the long cycle of declining income,” he said.
He pointed to the hog industry as a success story. “It worked really good for hogs a couple of years ago because the industry was going along relatively stable and then they had a huge spike down in prices,” he said.
“That program came in and picked them up to 70 per cent of previous three year margin, which for no premium is an excellent program.”
But in the instance of grain, producers would receive only 70 per cent of what have already been low incomes. “Your previous three-year margin is so bad that 70 per cent of that is virtually little or no hope at all,” he said.
If the trend of poor weather and poor prices continues, Smolik foresees more farmers moving into other forms of agriculture, such as cattle and fine seeds. But like grain, they require a commitment in infrastructure, and if too many move into a single market, an over supply will result, leading to the same types of problems.
“Unfortunately for grain, it’s been too many bad years. Whether it’s weather-related up here or whether it’s price-related, it’s getting very trying to see if we can continue on.”
The B.C. Grain Producers administer a $1.4-million transportation adjustment fund for Peace farmers, announced this summer. The program will pay out an average of $3 to $4 per acre to area farmers, but the extra money is more than completely offset by high fuel and fertilizer prizes and declining commodity prices.
Nevertheless, Smolik is encouraging farmers to pick up application forms for the fund. They’re available at the Ministry of Agriculture offices and at the grain elevators.