Good afternoon. Thanks for inviting me to Ottawa to address this committee on the very important issue of canola seed exports to China.
My name is Will Gerrard. I'm a 35-year-old fourth-generation farmer. My wife Jacquie 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 wheat, canola, soybeans, peas, hemp 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, because you will see that 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's not without its ups and downs. In my short 17-year farming career, I have sold canola at 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—up to 70 bushels per acre when everything clicks just right to produce a bumper crop.
Prior to 2019, three crops we produce faced significant trade and marketing issues. In 2017, low-cost Chinese hemp seed hitting the international market played a significant role, and buyers in the hemp seed exporting and processing industry lost their 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 India's tariffs on pulse crops, which caused the 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. bean imports, has also impacted soybean prices in a negative way for Canadian growers.
Admittedly, hemp and peas were relatively small acreage crops for us, and we were able to shift our acres to larger market crops, such as canola, soybeans and wheat. With the recent blockage of Canadian canola going into China and, in turn, the dollar-a-bushel drop in canola prices, I think I speak for my fellow farmers in Manitoba in expressing concern that we're running out of profitable crops to grow.
The recent drop in canola prices has caused a direct loss to our farm, totalling about $70,000 on the remaining canola inventories from the 2018 production year. I'm concerned that prices will continue to drop as seed inventories build in Canada. Losses next year for our farm would be in the hundreds of thousands of dollars. This money is 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 in 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've already heard talk amongst fellow growers about cancelling machinery orders and cutting back on crop inputs, such as fertilizer and chemicals, for the coming year. When farm profits suffer, the economic well-being of the entire community suffers just as much.
Farmers are constantly striving to become more efficient with our inputs. We have invested in technologies invented by Canadian companies, such as precision seed and fertilizer placement and sectional control technology, to eliminate over-application of pesticides and fertilizers. We have done these things out of necessity to remain competitive in a global marketplace. A worst-case scenario for us is to lose the global markets that 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, reliable and competitive oilseed crop in canola. We need to get a fair value for it.
Thank you.