Evidence of meeting #144 for International Trade in the 42nd Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was crop.
A recording is available from Parliament.
Liberal
The Chair Liberal Mark Eyking
Thank you, sir.
We have a brochure here from the Canola Council of Canada that shows that even though Saskatchewan produces half of the canola crop, it's almost produced in every province in Canada, except, I think, in Newfoundland and Labrador. It's affecting all parts of the country.
We're going to go to the NDP now for five minutes.
Ms. Duncan from Alberta, you have the floor.
NDP
Linda Duncan NDP Edmonton Strathcona, AB
Thank you very much. Thank you, all of you, for coming and appearing.
Mr. Gerrard, you had said—and correct me if I'm wrong—that 90% of the canola has been sold and priced. Does that mean that only 10% is left in the bins and not sold?
NDP
Linda Duncan NDP Edmonton Strathcona, AB
Only personally, so my question to you would be, do we have a handle on what percentage of the canola remains in the farm bins, where it's plummeting in value, where it has either not been sold or not been priced?
Invernorth Ltd., As an Individual
I don't have that number off the top of my head. I want to say that Brad will tell you.
Hanmer Joint Venture, As an Individual
Yes, as estimated by trade analysts—I'd be happy to share the sources; they're mainly Stats Canada—that about $340 million in unpriced canola is sitting in the bins right now. That does not account for—if you look at the graph I have up there—that there are crops.
On my own farm, since the crisis has happened, it's been very challenging to move a sold crop of canola into the channels of either the Viterras or the Richardsons of the world, to get paid. Those contracts are backed up. Even though we have no price erosion potential, we physically can't move our grain, because for these companies now, their backs are to the wall on where to go with the crop. When you lose your biggest export market, everything starts to grind to a halt. Now we're starting to see a spillover into other commodities. That's a question we'll see the answer to in Stats Canada numbers a year from now. The best trade estimate, I would say, is that there's $340 million sitting on farms unpriced, which already had that price erosion of $340 million.
NDP
Linda Duncan NDP Edmonton Strathcona, AB
Okay. Thanks.
It would be my understanding, then, that a lot of farmers' ability to pay for the seed will be impacted, even if they decide to plant canola this year. There will be a hit to a lot of our growers, not only this year but next year. Are any of the growers running into problems being able to finance even buying the seed right now for canola or any other product?
Newman Farms Ltd., As an Individual
I wouldn't say that's a problem right now because we plan into the future. For every year you're going to farm, you have to budget ahead.
What's happening now is that we're sitting there with no future income. We start pricing next year's crop now. We start doing it in increments into the fall. It's not a good price, and so guys hold back. That's the scariest part: we hold back selling it, and then there's no income coming in because it's going to take away all of our profits.
NDP
Linda Duncan NDP Edmonton Strathcona, AB
I just met with some of the Alberta growers who suggested to me that there have been some sales of canola oil to China. Do we have any kinds of concerns or are there threats that they will stop the sale of the canola oil as well, or do you think that if revenue could be garnered, including from the federal government, there's potential to expand the value-added? Is that going to help some of the growers, at least in the interim term?
Invernorth Ltd., As an Individual
It's a long-term solution to expand crush plants. I personally sell, probably, 95% of my canola to crush plants, so it hasn't actually....
That's why I say, when you ask a general question like something to do with financing or deliveries, it's so individual to different farmers. My situation is totally different. We've been lucky to have good crops where we farm, so I don't know if cash flow is a big thing in my area. In other areas that have had droughts, I'm sure it probably is.
Yes, I think value-added would be a good long-term solution, as long as it's market-driven.
Hanmer Joint Venture, As an Individual
To clarify for the committee—and please fact check my numbers—according to the Canadian Oilseed Processors Association, roughly 28% of our domestic processed canola oil and meal goes to China, so we are vulnerable in oil and meal as well.
NDP
Linda Duncan NDP Edmonton Strathcona, AB
I noticed that France imports a fairly considerable amount, though it's nothing compared with China, Japan or Mexico. But Germany is only the second European country.... Is that because it's a GMO crop? Is that why Europeans are not buying the canola?
Hanmer Joint Venture, As an Individual
No, it's because Germany has a vibrant rapeseed industry as well.
Hanmer Joint Venture, As an Individual
Their demands for canola oil are a little bit different. Maybe Mr. White could help us with that. If you're asking whether there's a problem with GMOs in Europe, the answer is no.
Hanmer Joint Venture, As an Individual
They don't grow it there. They buy the oil.
NDP
Linda Duncan NDP Edmonton Strathcona, AB
Okay. I understand a lot of it is for machinery, though, not necessarily for human use.
Hanmer Joint Venture, As an Individual
Yes, it could be industrial rapeseed for biodiesel or food grade rapeseed, but there is canola oil sold into Europe.