Canada Markets

Canada's Wheat Research Priorities and the Risks

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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The blue bars represent the trend in global ending stocks as measured against the primary vertical axis, while the green bar represents the forecast for 2017/18. The black line with markers shows the trend in global exports, expected to dip slightly in the current year, also measured against the primary vertical axis. The brown line represents the trend in Canada's share of global exports, as measured against the secondary vertical axis. (DTN graphic by Scott R Kemper)

Canada's Wheat Research Task Group has released its 2017 Canadian Wheat Research Priorities 2017-2022 report, described as "a summary of national research priorities, goals and measures developed by the Wheat Research Task Group." This is indicated as a project of the Grains Round Table and is co-chaired by Cereals Canada and Agriculture and Agri-Food Canada.

The 20-page report builds a case for research based on a number of micro and macro factors. Wheat is reported to play a key role in rotations, while is more drought-tolerant than some other competing crops. A case for research based on macro factors that points to wheat being a staple crop for 35% of the world's population while averaging 20% of the calories in the world's diet, more than any crop. At the same time, projections for a 9 billion global population by 2050 is expected to boost global consumption by 175 million metric tons from the current consumption to 900 mmt. This growth in demand may take place as the effects from climate change could lead to reduced global production potential.

The five national strategy themes developed include:

1) Improving wheat yield

2) Improve wheat yield reliability

3) Enhance cropping system sustainability

4) Continuous improvement in food safety

5) Consistently deliver on customers' quality needs

For each of the five strategy themes, a target outcome is listed, along with goals and measures that allow progress to be evaluated. As stated in the report "wheat is a very complex and challenging crop from a plant breeding standpoint." (The full report can be found at…)

While the work needs to be done, it may not be without risks. What if population growth fails to meet projections? How will the rest of the world respond?

As seen on the attached chart, ending stocks estimates (blue bars) have grown in each of the past five years, estimated at 177.6 mmt in 2012/13 and at a record 263.1 mmt currently forecast for 2017/18, or close to 36% of annual global use. Global producers continue to find ways to crank out bigger and bigger crops, although the 2017/18 crop is forecast to show a year-over-year decline for the first time in five years. This is based on the USDA's September estimates, which are due to be revised on Oct. 12.

The black line on the attached chart points to the trend in global trade, measured against the primary vertical axis. Over the chosen period, global exports reached a low of 101.2 mmt in 2000/01 while reached a record high of 181.7 mmt in 2016/17. Current estimates suggest that global trade will decrease slightly in 2017/18.

The brown line shows the trend in Canada's share of global exports, as measured against the percent scale on the secondary vertical axis. This is based on a combination of Statistics Canada export data along with the USDA's global trade data. Over this period, Canada's share reached a high of 20% in 1997/98, while reaching a low in 2011/12 and 2016/17 of 11.1%. This is expected to increase but only slightly to 11.2% in 2017/18.


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