Written by: Tracie Westington, Quinte Regional Communication Coordinator
For many of us, 2020 is not going to be a year that we will think back to with fond memories. The pandemic, Covid-19, has turned our world upside down.Aside from the fact that people are dying, there has been an enormous economic impact that we are likely to feel for years. Moreover, the crisis has had additional ripple effects in the agricultural community.
On the surface, it is business as usual for grain farmers. Farming does not go on hold, waiting for a pandemic to pass; it must continue. Crops are planted and grains are marketed, the farmer continues despite the prices. Some years are favourable, others are not, but the ever-optimistic farmer continues with the hope of recouping any losses “next year”. As if the virus hasn’t been enough, in 2018, farmers dealt with vomitoxin in their corn. In 2019, the issue was light test weight. These are only the most recent issues in a constant battle for the producer to provide a higher yielding, healthy crop to meet demand.
The seed industry has always been quick to react to the struggles of the grain farmer. It creates amazing genetic hybrids that fight disease, and others that are adapted to grow successfully in less than ideal climate conditions. The seed companies work hard to give the farmer a leg up.
In March 2020, the full extent of the pandemic hit home for everyone in Canada. The uncertainty of the situation caused panic that had world markets dropping.
All over the world governments told people to stay home. People listened and most non-essential travel stopped.
Ethanol production, the second largest user of corn in Ontario, slowed dramatically as consumers greatly curtailed their driving habit. Without gasoline consumption, there is not ethanol consumption. Corn prices fell as both grain futures and local grain basis levels dropped in response to the slowed demand. The grain industry, like most industries quickly looked for ways to adapt to the “new normal.”
In any year when the domestic demand falls short of domestic supply, the answer is the export market. This hit a stumbling block on April 21, 2020, when The Grain Farmers of Ontario (GFO) and The Ontario Agri-Business Association (OABA) released a joint statement outlining that some seed companies were marketing corn hybrids that, while approved in Canada, were not yet approved for use in Europe. This was the first that many producers were made aware of that fact. According to the same letter, 5 of the top 10 export markets for Ontario corn are in Europe. In a year that required a strong export market to deal with Ontario corn, this was a significant concern.
Producers were urged to check with their seed suppliers for approval updates and with their marketing partners to see who was planning on receiving the hybrids that did not have EU approval. Those buying grain, whether end users, country elevators or exporters had to make a decision on a direction moving forward: would they, or would they not, accept the corn hybrids not approved for use in the European Union?
The decision has not been unanimous. Some will be accepting these corn varieties, some will not, some have not made a formal decision. As of this writing, two of the three major exporters in Hamilton officially announced they will not be accepting the unapproved hybrids.
This leaves the corn producer to face uncertainties this year that are not typical. Those that grew an unapproved variety may struggle to find a market to sell it into. There may be an added expense if additional travel is involved getting the corn to an elevator that will accept it. And worse, the limited marketability of the unapproved varieties of corn may have a negative affect on its value. For those who forward contracted corn with a buyer, who is not taking the unapproved EU variety that was grown, there is the additional issue of meeting contractual obligations.
The producer that grew an approved variety may be asked to provide proof of hybrid, an added inconvenience at an already busy time. Meanwhile, the grain industry may do everything in its power to keep these varieties separate from the EU approved varieties, but there is still a real possibility that, unapproved varieties could get shipped to Europe, whether intentional or not.
Consider this: If unapproved corn is discovered, what affect will this have on Canada’s reputation? Likewise, if unapproved corn is shipped and not discovered, does that mean Canada maintains its integrity?
It is essential that seed companies work to create hybrids that boost the competitive edge of farming, but the requirements of the end use market must not be forgotten. If they are, any competitive edge may be erased with consequences for the entire agricultural sector.
The crop is in the ground and there is no going back; the producer is encouraged to be proactive. Check with your local elevator, or grain buyer now on their policy for this year’s harvest. Discuss all your options for contracts already in place; most companies will be happy to work with you. Keep your seed tags; should it become necessary they are the easiest way to prove variety. Knowing your options and having a plan in place will save headaches down the road.