Cereals Canada CEO Dean Dias recently spoke with Radio-Canada’s Catherine Moreau about the one-year anniversary of the war in Ukraine and its impact on Canadian farmers and Canadian wheat exports. Click the link below to view the interview in French or scroll to read the English translation. 

Guerre en Ukraine et insécurité alimentaire : « Le monde a besoin du blé canadien

War in Ukraine and food insecurity: “The world needs Canadian wheat”

Catherine Moreau, Radio-Canada

Posted on February 26, 2023

With more than 55% of its area in arable land, Ukraine, commonly called the breadbasket of Europe, is one of the main agricultural producers and exporters in the world. It plays an essential role in supplying the world market with oilseeds and cereals.

A year after the Russian incursion into Ukrainian territory, Cereals Canada President and CEO Dean Dias reflects on the impact on Canadian grain producers and global food markets. His association, whose offices and laboratories are in Winnipeg, represents all links in the Canadian grain value chain.

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Catherine Moreau: What was the impact of the war in Ukraine and the decline in grain production on prairie farmers?

Dean Dias: The past few years have been difficult for farmers. The start of the war notably complicated access to fertilizers and agricultural products. The cost of production has thus necessarily increased.

Fortunately, grain prices followed, so farmers simply broke even. But they see great demand and that’s what the farmers are looking at and they’re hoping to have a good year of production to be able to meet that demand.

However, it is important to understand that Canadian wheat is recognized worldwide for its quality. It therefore does not automatically replace Black Sea wheat or Russian and Ukrainian wheat. They cannot simply be interchanged. Countries around the world actually mix Russian and Ukrainian wheat with Canadian wheat.

So with the current situation, Canadian wheat has been able to meet demand. However, some countries may not be able to obtain wheat from the two main exporters, and have had to turn to other suppliers, or to local production, for example using cassava flour or rice.

CM: Are the huge price swings we experienced in the last year a good thing? Can farmers benefit from it?

DD: It is never a good thing to have such large fluctuations. No one makes a buying decision in a day. Customers look at the long-term effect. If there is a rise in the day, they may hesitate to place an order and then buy for the whole year. It is difficult to establish something in the long term. This causes concern.

CM: Many fertilizers come from Russia and China; what impact has the provenance of these products had on farmers in the past year?

DD: Russia is the largest exporter of nitrogen fertilizers in the world. We have other fertilizers in Canada, like potash, but we need nitrogen fertilizers, but we also import from North Africa.

After the invasion, Russian fertilizers were hit with 35% tariffs, so the cost suddenly increased. Some farmers had already placed their orders and they were already on their way.

Fuel prices also rose at the same time, increasing farmers’ operating costs. To grow a crop, they not only need fertilizer, they also need tractors, combine harvesters, etc.

CM: Has there been a new demand for Canadian grain?

DD: In 2020-21, Canada was hit by a severe drought, so we didn’t have enough production, which added to the chaos. We only exported about 15 million tonnes that year.

This year, however, thanks to nature and the modern agricultural practices that our farmers use, we were able to produce enough. We have produced about 35 million tonnes and we plan to export 24 million.

Some countries were not in the market before, one of them is Panama. We have just learned that he is going to buy more Canadian wheat. So these are not big customers, but a small market that mixed wheat from the Black Sea with its local production.

The market for Canadian wheat, however, is already diversified. Since 80 different countries are already buying Canadian wheat, the number of interested countries has not just doubled.

We also have to remember that not all countries need the quality of Canadian wheat. To make flatbreads, like pita or naan breads for example, you don’t need western Canadian wheat quality, but for countries looking for options for making pastries, sandwich breads and so on, so Canadian wheat is essential for that.

CM: Since Canadian wheat does not replace Black Sea wheat, how can Panama’s interest be explained?

DD: In my opinion, Panama seeks to produce good quality products and its options are limited. If you think about the whole world picture, there are only three suppliers of high-quality protein wheat: the United States, Canada and Australia. It’s always been that way.

CM: Why not just take advantage of the situation and plant only wheat?

DD: It is not so easy. You must first have seeds, the quantity of which is limited to grow the next crop. But most important is the health and sustainability of the farm.

The best way to do this is therefore crop rotation. Farmers grow canola, then wheat, then pulses. Legumes are a way to inject nitrogen back into the soil. Which may mean less fertilizer the following year.

Farmers are concerned about keeping their land healthy. They want to pass it on to the next generation, they don’t want to destroy it, they want it to be family farms.

CM: Some Canadian grain producers want more pipelines to be built to make it easier to move grain. What do you think?

DD: If you look at the supply chain system in Canada, most of the grain production is on the prairies. To transport this harvest to our customers, we have to transport it to the ports. Rail lines are the only option to get there.

However, if Canada wants to feed the world, we have to think about the supply chain. We need investment in transport infrastructure, that is where our bottleneck is. Demand is only going to increase and we have to ask ourselves how we are going to get our crops to customers on time.

CM: What message would you have for farmers?

DD: Canadian farmers are very sophisticated. They understand that they have to follow crop rotation, that they have to get the best seeds, and that they have to use modern farming practices like precision farming. The world knows that products from Canadian farmers are of the highest quality, sustainable and nutritious. I have just returned from an economic mission and I can tell them: the world needs you. Continue to produce top quality wheat and grains.

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