By Alice McFarlane

Prairie wheat commissions question a recent article on the impact of wheat prices on food costs

Dec 16, 2020 | 9:48 AM

MELFORT, Sask. – Saskatchewan Wheat Development Commission (Sask Wheat), Manitoba Crop Alliance (MCA), and Alberta Wheat Commission (AWC) are concerned that a recent Canadian Press article inaccurately reflects the impact of the price of wheat on rising food costs in Canada.

The article reported on the projections in Canada’s Food Price Report 2021. It indicated that bakery products are likely to rise by 3.5 to 5.5 percent in 2021.

A quote within the article says that the cost of wheat rose 50 per cent in the past 18 months and the increase contributed to the increase in food costs.

Sask Wheat chair and Nokomis, Sask. farmer Brett Halstead said the price changes quoted are misleading and do not accurately reflect the on-farm prices wheat producers are receiving for their grain.

“Wheat producers appreciate that several factors influence store shelf prices, but the cost of wheat is not a major factor in the rise of food costs. Canadian consumers have one of the lowest costs for food relative to their incomes while enjoying one of the safest and highest quality food supplies in the world,” Halstead said.

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The most recent data from Statistics Canada shows the average western Canadian price received at the farm gate for wheat was 3.3 percent lower in October 2020 than it was in April 2019.

Provost, Alta. farmer Greg Bosch said he believes the Canadian Press story was inaccurate.

“Just because someone comes out and says it, it doesn’t necessarily mean it’s true,” Bosch said. “Yet the finger gets pointed directly at farmers when information like that comes out. Just because futures markets are going up and down constantly does not mean the price farmers receive is changing.”

Data from the Saskatchewan Ministry of Agriculture showed a bushel of #1 CWRS wheat was worth $5.66 in January 1975. In January 2020, a bushel of #1 CWRS was worth $6.22. Adjusted for inflation, the value of one bushel of wheat in 1975 should be worth $26.12 today.

Bosch said it is a complex supply chain with many steps in the process between the farmer and the grocery store.

“We don’t get any more for our product when food prices go up. Everybody needs to make their little bit of profit or that chain breaks down,” Bosch said.

The majority of Canadian-grown wheat is exported to global markets. Because Canada produces a large surplus of wheat each year, there is enough wheat available to meet the domestic market demand.

Bosch said the domestic price of wheat is based on the world price, and any fluctuations in domestic price are based mainly on global factors. He said the demand for raw farm products continues to grow. This year, there have been large exports of wheat and barley to China as they rebuild their hog herd.

“Let me be clear, that does not always translate into higher prices at the farm gate,” he said.

Sask Wheat, MCA, and AWC, in a news release, encouraged the authors of the study to work with the Canadian Press to correct the statement in the article.

The commissions said it will be important to accurately reflect the impacts of various factors to food price changes when discussing the results, clearly illustrating the cost of wheat to food manufacturers as well as the returns to wheat producers.

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alice.mcfarlane@jpbg.ca

On Twitter: @AliceMcF