Soaring global wheat prices — spurred by Russia’s invasion of Ukraine — have some wondering if Alberta producers will change their sowing schedules in the coming weeks.
But farmers, already grappling with rising costs, say those higher prices come with few guarantees, adding that many of their peers may not be persuaded to change their plans.
Russia and Ukraine together account for about 30 percent of global wheat exports, but the current conflict in the region means their production is being curtailed.
Lynn Jacobson, president of the Alberta Federation of Agriculture, said that while the opportunity for farmers to take advantage of the global scarcity is there, it comes with some conditions.
“Your options are really determined by the conditions in your area and what’s happening on your farm. If you get enough rain, you can do exceptionally well,” Jacobson said.
Adequate moisture is just one factor farmers pay attention to this season.
While wheat prices have risen, so have the costs of inputs farmers need to grow their crops, such as fertilizer and fuel.
In addition, many producers in the province are still feeling the effects of the 2021 drought and have less money than usual.
How to fund this year’s harvest will be of paramount importance to many farmers, said Tom Steve, general manager of the Alberta Wheat and Barley Commission (AWBC).
Farmers are also not ruling out the possibility of another drought, which could affect which seeds end up in the soil.
“It’s a complicated situation because it’s a double-edged sword,” Steve said.
“[Regarding] high wheat prices, it’s about whether farmers will be able to broker a crop to meet those needs in the market.”
Why farmers may or may not make the switch
Stephen Vandervalk is a fourth generation farmer working near Fort Macleod, Alta. He doesn’t think higher wheat prices will change farmers’ plans too drastically.
“I think you’ll see a little more wheat coming in, but even with that price increase, [wheat] is not necessarily much better to grow compared to other options.”
Vandervalk said high prices for commodities across the board – including barley and canola – mean farmers will not rush to replace everything with wheat.
Maintaining a diversified portfolio and sticking to appropriate crop rotations to maintain soil health are equally important for farmers, Vandervalk said.
“You’re kind of stuck in your rotation,” he said.
“Perhaps the best-case scenario is that you can add 10 or 15 percent of your acres of wheat on top of what you originally intended to do.”
The nature of harvest and sowing cycles means farmers are not always able to react fully and quickly to trends. Most prefer long-term proposals to short-term thinking, said Steve of the AWBC.
Greg Sears, a grain and oilseeds grower near Grande Prairie, Alta., said his growing plans have been in place since November and he doesn’t plan to drastically change them.
A bigger picture
Two other key variables will ensure farmers can achieve their profit margins: the weather and the cost of inputs such as fertilizer.
“I think the biggest factor of all is the environmental conditions,” Jacobson said.
The drought of last year is still remembered by many.
“We have gone from our best average harvest in history to our worst average harvest in history. So it was certainly a dramatic change,” said Vandervalk.
Sears said that although the effects of the drought varied from farm to farm, he was left with many empty trash cans.
“I have about 10 percent of my production left to leave the farm, and a lot of it already [been] Contracted. As such, we will not see the benefits of currently skyrocketing commodity prices, which is unfortunate.”
As prices for fertilizer, crop insurance premiums, and fuel also rise, Sears sees an increase in the risks farmers will be taking to get this year’s crop into the ground.
“[That] basically means that in order to maintain a sales margin, ie profit, we must continue to see strong commodity prices on our sales,” Sears said.
Certain crops are more expensive to grow than others, Steve said, so farmers can try to increase acreage with more drought-tolerant varieties that don’t require as much fertilizer.
“Many farmers don’t have the money to seed, so they will try to minimize their input costs. That could easily tip the scales in favor of grains like wheat and barley because canola is a more expensive crop to grow.”
While Steve said he thinks the grain sector has shown its resilience “time and time again,” another year of drought would weigh heavily on grain farms.
“We’ve really seen how the combination of a few events, whether it’s weather or geopolitics or transportation, can really create problems,” Sears added.
“I think it just underscores the importance of having good, stable food systems and agricultural policies so that we can maintain a stable food supply out there.”