The Western Producer — By Ed White
The Russians are coming.
It might not be in the form of refurbished T-62 tanks, buzzing Iranian drones and hopeless waves of convict conscripts, but Russia is continuing its assault upon global grain markets in which we were once comfortably numb to competition.
“We hear from customers, ‘Russian quality is getting better,’ ” Cereals Canada’s Elaine Sopiwynk told a group of farmers during the Combine to Customer course last week.
Canadian farmers often hear soothing words about the high standard of Canada’s agriculture, how overseas customers praise Canadian grain’s consistency and reliability and how very special Canada is.
These are pleasant myths in which to indulge. Like most myths, there is truth underlying the belief system being promulgated. Foreign buyers often praise Canada’s crop system. That’s not made up.
But there can also be an alarming degree of blarney in the hubristic statements that are so often heard across the industry, something that allows Canadians to become blinded to the challenges the world is posing to our farmers.
At Combine to Customer, farmers from across the country are brought together to learn about Canada’s farmgate-to-fork food system. They hear much that would tend to make one feel proud to be part of a system that has been deliberately designed to offer high quality rather than maximum volume. The importance of tight quality parameters, good baking and milling specifications, a credible inspection system and a tightly overseen variety development system are stressed.
However, as with Sopiwynk’s comment about Russia’s growing ability to deliver quality grain, there are also cautions expressed about the incredible competitiveness of the world grain markets.
Australia didn’t like Canada poaching lucrative noodle and beer-making markets in Asia when drought ravaged its production. The Aussies want those back, and Canada will have to fight to retain as much share as it can.
The noodle-making and brewing technology inside Cereals Canada helps show foreign buyers how to work with specific Canadian types of grain, something that helps keep and win buyers. With the Canadian government having just opened a Southeast Asian trade promotion office, those facilities will get a chance to become even more useful.
But we don’t have enough offices overseas to promote ourselves as effectively as our American friends do, and we never will.
“We are peanuts,” said Sopiwynk when describing the wealth and influence our nearby competitor can bring to bear in markets such as North Africa, where so much Canadian durum goes.
The United States might not be likely to become a huge durum competitor in North Africa, but what about Kazakhstan? Like Russia and Turkey, Kazakhstan would like to make more sales to Italy and other Mediterranean markets. How is our quality edge holding up there?
Throughout Combine to Customer, farmers heard about how Canada’s wheat is valued by many buyers as a “blending wheat” because it can be mixed with lower quality varieties to produce better flour and baked products. Especially for cost-conscious buyers, having quality Canadian wheat available means they can mostly buy cheaper grain from countries such as Russia and still produce a product their consumers like.
What happens if the lower quality wheat out there begins closing the gap with Canadian wheat? Do those buyers still need to pay big bucks for that maple leaf stuff?
Canada has long fought quality-oriented competitors such as the U.S., Australia and Argentina in world markets. What’s new here is that the formerly low-quality producers appear to be encroaching on the better parts of the market.
For a big-land, small-people country like Canada, there isn’t much option but to double down on quality, consistency and reliability. Canadians aren’t going to be able to eat everything farmers produce if foreign producers grab our overseas markets.
Canadian farmers feel proud about the quality of their products and their success in export markets. However, success is not going to survive if Canada doesn’t maintain a quality advantage in the markets. The sort of quality that was good enough yesterday won’t be good enough tomorrow.
It’s great to hear that Canada has a high-quality system that earns a premium place in the global market. It’s worrying to hear that Canada’s competitors are launching incursions into the best-paying places.
Channeling our pride to support even more commitment to improving Canada’s system is something that could help farmers keep worry at bay and ensure the mythology is both comforting and true.
Original article: https://www.producer.com/markets/producers-must-be-prepared-to-take-on-new-competition/