Thank you for inviting me to Ottawa today to address the committee on this very important issue of canola trade to China.
My name is Will Gerrard. I'm a 35-year-old fourth-generation farmer. My wife Jacqueline and I have three young children. We're partners in a family farm located just south of Riding Mountain National Park in western Manitoba.
We have tried to implement a diverse crop rotation including hemp, wheat, canola, soybeans, peas and grass seed. The invention of canola was a huge boost to farms in western Canada, especially in the cool parkland region where I farm. This is quite evident if you drive through or fly over my area in the summer, as you will see a full 50% of the fields are yellow canola crops in full bloom.
Over the past 40 years of growing canola on our farm, it has evolved from a small acreage specialty crop to become a cornerstone of predictable profits. Of course, as with anything in farming, it is not without its ups and downs. In my short 17-year farming career, we have sold canola for as low as $6.50 a bushel and as high as $15 a bushel. Yields have ranged from 20 bushels per acre, when a disastrous August frost struck in 2004, to up to 70 bushels per acre, when everything clicks just right to produce a bumper crop.
Prior to 2019, three crops we produced faced significant trade and marketing issues. In 2017, low-cost Chinese hempseed hitting the international market played a significant role in buyers in the hempseed exporting and processing industry losing premium markets. This resulted in a price drop of 20% to 30% for this commodity, making it unprofitable for us to produce. Everyone is aware of the impact of the India tariffs on pulse crops, causing prices of peas and lentils to drop significantly for Canadian growers. More recently, the slump in soybean futures prices in the U.S., due in part to China backing away from U.S. soybean imports, has also impacted soybean prices in a negative way for Canadian growers.
Admittedly, peas and hemp were relatively small acreage crops for us, and we were able to shift acres to larger market crops, like soybeans and wheat. With the recent blockage of Canadian canola going into China, and in turn the dollar per bushel drop in canola prices, I think I speak for my fellow farmers in Manitoba in expressing concern that we are running out of profitable crops to grow.
The recent drop in canola prices caused a direct loss to our farm on remaining canola inventories from the 2018 year, totalling about $70,000. If this issue is not resolved, I am concerned that prices will continue to drop as seed inventories build in Canada. Losses next year on our farm could be in the hundreds of thousands and this money would be lost from the local economy forever. Seeded canola acres will most certainly drop this spring, and this acreage will shift to smaller market crops and drive the price of those commodities lower as well.
As you can see, the trickle-down effects of the canola ban to China are numerous and significant.
Where I live in western Manitoba, grain farming creates a massive share of the economic activity in our local communities. Some of the big employers in the area consist of agricultural equipment dealers, crop input retailers and grain purchasing and processing companies. I have already heard talk amongst fellow growers about cancelling machinery orders and cutting back on crop inputs for the coming year. When farm profits suffer, the economic well-being of our entire community will suffer just as much.
Farmers are constantly striving to become more efficient with our inputs. We've invested in technologies invented by Canadian companies, such as precision seed and fertilizer placement and sectional control to eliminate the over-application of pesticides and fertilizers. We have done these things out of necessity to remain competitive in the global marketplace. The worst-case scenario for us is to lose the global markets we have worked so hard to obtain and stay competitive in.
I urge members of Parliament from all parties to work together with industry and farmers. We have worked hard to develop a safe and reliable oilseed crop in canola, and we don't want to lose it.