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From bushel to bread: How Canada’s wheat feeds the world Add to ...

The Globe and Mail plans to spend the next few months following a bushel of hard red spring wheat grown in Alberta until it is turned into bread by a foreign buyer

Todd Korol for The Globe and Mail

Jay Schultz scoops up a handful of earth and lets it slide off his palm. The soil is dark brown and mixed with a rich mulch of husks, chaff and straw from last year’s harvest.

But the field is wet and still cold from the long winter. A stiff wind is blowing across the wide open landscape of Wheatland County, Alta., and there are flakes of snow in the air.

Planting will have to wait.

Mr. Schultz’s family has been farming this land east of Calgary for generations, growing wheat and canola across 6,000 acres. But this is always an anxious time of year. The short growing season in Western Canada means the planting window is measured in days, not weeks. And everyone on the Schultz farm knows what’s at stake.

“It’s now,” Mr. Schultz’s father, Ray, says as he sips coffee at the family farm house. “We should be seeding today.”

Jay Schultz eats a quick dinner made by his wife Sarah while his nephew Blake plays. (Todd Korol for The Globe and Mail)

This is a story about wheat; how it is grown, harvested, transported, traded and ultimately transformed into some of the world’s most basic foods. It’s a story of one bushel; from seeding to eating.

The Globe and Mail plans to spend the next few months following a bushel of hard red spring wheat grown on Mr. Schultz’s farm. We’ll track it from the moment the seeds are planted through to harvest and on to the grain elevator. From there we’ll follow along as it makes its way to a shipping terminal in British Columbia and ultimately to a buyer somewhere far beyond Canada’s shores who will turn Mr. Schultz’s wheat into bread.

Throughout the journey we’ll check in on the state of agriculture, here and abroad, and examine the issues affecting the global food supply. We’ll also show how the family farm has changed.

Let’s start with Mr. Schultz who represents a new wave of Canadian farmers. He’s 30 years old, roughly 20 years younger than the average age of farmers in this country. He has a degree in crop science, shares farming tips on Twitter and has a farmyard full of high-tech equipment including a $400,000 seeding machine that plants his entire crop without tilling any soil and is guided by a GPS system that means he can keep seeding long after sundown. He keeps up with global grain markets on his smartphone, makes videos as a hobby and even has a drone to peer across his fields from the sky. Just about everything on his farm is done to precision, from testing the chemical makeup of the soil to making sure the plants are at the perfect height for spraying to ward off weeds and disease.

This is a critical time for Mr. Schultz and all grain growers. International demand for wheat is near record levels, but political tension in major producing countries such as Ukraine and Argentina mean exports are expected to be much smaller this year. Throw in some bad weather and wheat prices could be soaring by August. That’s good news for farmers, if they can find a buyer for their grain and get it shipped. Bottlenecks and a shortage of rail cars left mountains of wheat stuck in farmers’ bins last year and some of it still hasn’t moved. The end of the Canadian Wheat Board’s monopoly on wheat sales also means farmers are on their own when it comes to marketing and selling their crop, two-thirds of which is aimed at international buyers. Then there’s the rising cost of inputs such as fertilizer and fuel, not to mention the debt load associated with financing the millions of dollars worth of equipment.

But none of that matters to Mr. Schultz right now on this chilly day in early May. As he looks out across the empty fields of dirt, he’s just wishing it would stop snowing. “Weather can make you look like a good farmer or it can make you look like a bad farmer,” he says.

Todd Korol for The Globe and Mail

‘We are gamblers’

The family’s roots run deep on this land. Mr. Schultz’s great-grandfather first turned over the soil in 1929, paying for what was once ranch land with bushels of grain. Wheat still pays the bills here, but the overall crop also now includes canola, and this year, yellow peas.

Mr. Schultz grows two kinds of wheat: hard red spring wheat, which is Canada’s largest wheat export and prized for its high protein and gluten strength that make it ideal for bread making, and Canadian prairie spring wheat, which is lower in protein and used for making steamed buns, noodles or ethanol.

This year he hopes to harvest about 200,000 bushels of wheat, and each one will cost him about $2.50 to grow, including seed, fertilizer, fuel, fungicides and herbicides (every 60-pound bushel of hard red spring can make about 45 loaves of bread). How much he will get for those bushels at the local elevator depends on many things far beyond his control.

Right now the price of a bushel of hard red spring wheat is trading at around $7.00 (U.S.) on the Minneapolis Grain Exchange, one of the key agricultural commodity markets.

But that’s not the price the farmer receives. The grain companies that operate the prairie elevators take a piece of the action. They pay growers less than the Minneapolis price to take into account the distance to port, size of the harvest or on-farm supplies, customer demand, and how much room they have to store it. Lately, that discount has been about $2 to $4 a bushel, but that is expected to narrow.

“We are gamblers,” says Ray Schultz, shaking his head as he considers the massive cost for planting a crop and the giant risk that everything will work out come harvest.

‘Mining the earth’

Knowing what’s in the dirt, and what’s not, is critical to Jay Schultz. The planting for this year’s crop began months ago when he had his soil tested and adjusted his fertilizer application this spring based on the results.

His soil is dark brown – not the rich black earth found in other parts of Alberta. It is also low in certain nutrients, which means his crop needs nitrogen and phosphorous. Getting those nutrients into the ground is done by the tilless seeder, which automatically places tiny blue and white pellets beside each seed as it is placed in the soil.

“We’re basically mining the earth” and replacing what is removed, Mr. Schultz says.

And none of this comes cheap. Fertilizer is the farm’s biggest expense, costing as much as $500,000 a year. But it is the best ways to protect – and increase – production. Using more fertilizer in 2012 helped Mr. Schultz boost yields to 52 bushels an acre from 35. He is hoping for 60 this year.

It’s a constant balancing act. Paying more for fertilizer can boost yields. But if yields go up everywhere, wheat prices will plummet. That happened somewhat last year, when farmers in Western Canada grew a near-record wheat crop.

Planting is also expensive and time consuming. Mr. Schultz has found a way to save on both. His tilless seeding machine is a 66-foot-wide contraption that fertilizes and plants 64 rows at a time and costs as much as a Toronto condo.

To save fuel and spare the machinery wear and tear, the seeder follows the rows of stubble from last year’s crop, instead of cutting new tracks. The machine has 64 metal teeth that make a shallow cut into the soil. It then drops seeds and nutrient pellets into the rut, where they are sheltered from wind and erosion by the stubble of last year’s wheat.

Todd Korol for The Globe and Mail

“More guys are adopting it,” Mr. Schultz says of the planting method known in farming circles as no-till.

Seeds get special treatment too. Before being loaded into the planting machine, the seeds are dipped in a bath of pink fungicide to ward off root rot and wire worms, the beetle larvae that can kill a seed before germination.

Once it is out on the field, the seeder’s global positioning system, GPS, ensures it never goes over the same ground twice, which wastes fuel, seeds and nutrients. The GPS also lets Mr. Schultz constantly check weather forecasts, price reports and Twitter on his smartphone, which he calls his “most important tool.”

Twitter has quickly begun to rival the agriculture conference as a place where new farming techniques are shared and learned about. “A lot of ideas get started on Twitter because you’re talking to a lot of entrepreneurial-type guys who are trying new things,” says Mr. Schultz, who goes by @WheatlanderJay.

Jay Schultz fills his seeder with fertilizer while seeding canola in early May. (Todd Korol for The Globe and Mail)

More fungicide is applied onto the wheat in July, just as the top leaves appear and just before the kernels of grain form, ensuring the little factories that transform sunlight into plant food are disease-free.

Weeds are a constant battle. Green foxtail, wild oats, even dandelions can quickly outgrow young wheat plants and choke them out. To fight these, a dose of herbicide is sprayed on the crop in June, when the wheat is just getting started.

“We try to control what we can control,” Ray Schultz says. “But you have to do your best with what God and nature throw at you.”

‘Luck and good management’

Even before planting has begun, the selling has already started.

This year Jay Schultz has sold around 20 per cent of his crop. Since the federal government ended the buying and selling monopoly of the Canadian Wheat Board two years ago, Mr. Schultz and other western growers have been able to choose how, where and when to sell his grain. Like most farmers, Mr. Schultz sells forward contracts on his crop to cut the risk and guard against plunging prices. He works with an analyst and checks price reports each day before deciding when – and for how much – to sell.

“There’s no real math to it. We take all the information in and make the best deal we can,” Mr. Schultz says.

This year, he will market his crop around five elevators in Southern Alberta – Richardson Pioneer, Cargill Inc., Paterson Grain Ltd., Louis Dreyfus Group and Viterra Inc. He’ll haul truckloads to the ones that offer the best price. But elevators have risks too and they will stop taking deliveries if they can’t get enough rail service. That’s why Mr. Schultz makes sure to spread his sales among elevators that are served by both major railways, Canadian National Railway Co. and Canadian Pacific Railway Ltd.

This marketing freedom brings risks. Last fall, wheat prices plunged as markets reacted to the massive Canadian crop and some growers responded by hanging on to their wheat in hopes prices would rise. Many were left stuck, unable to sell grain as elevators filled up and the rail service became backlogged. Making matters worse was the fierce winter, which the railways said hampered operations and compounded the backlog. The result was mountains of wheat left on Canadian farms and many farmers facing a cash squeeze.

Todd Korol for The Globe and Mail

Mr. Schultz and other growers in his region fared better than many growers in Manitoba, where winter was the harshest and little grain was sold. The elevators in Southern Alberta are among the most western in the country, meaning it’s a relatively short haul over the mountains to the Port of Vancouver. Wheat prices held up, and most elevators around his farm were able to take deliveries of the crop.

So while the grain backlog made headlines and roiled global markets, the Schultz farm sold all its grain.

It wasn’t all just luck. The family made some key decisions, like harvesting early – in late August – when they realized just how big the crop was. And they bought a second combine harvester, which meant they could get their wheat and canola to market quickly, when prices were good and just as the grain world was realizing Canada had a record crop to deal with.

“It was luck and good management,” Jay Schultz says.

This season, wheat prices have been rising, offering some comfort – but no guarantees – to the farmers who are seeding this year’s crop. The Russian threat in Ukraine, a drought in the U.S., and the cold winter that cut the size of the U.S. winter wheat crop have caused wheat prices to soar by 30 per cent since the end of January.

“Stuff like that can drive it up pretty quickly,” Mr. Schultz says. “It can also drive it down. That’s why we have to pay attention to what’s happening around the world.”

Also supporting prices is the expected arrival of El Nino this fall, the weather pattern that could cause droughts in grain-producing regions in Australia and North Africa. In Canada, the system’s effects are limited to a warmer-than-usual winter, says David Phillips, a climatologist with Environment Canada. The summer, he says, is expected to be normal, which is good news for growers.

Wheat likes rain in the early stages, and then warm – not hot – temperatures midsummer when the grains are growing. And a dry summer keeps damp-loving plant diseases at bay.

Seeding time

Finally the weather clears just enough for Mr. Schultz to start planting. Even though it’s dusk, he can’t afford to wait any longer.

He shoulders a 23-kilogram bag of seed, climbs the ladder to the top of the seeder and rips the top off the bags, dumping the contents into the tank. The sun is setting and the weather has turned pleasant. Two days of dry weather and sunshine have left the fields firm enough for the tractor and warmed the soil near the ideal 10-degree germination point.

It’s seeding time.

Todd Korol for The Globe and Mail

From his seat high in the climate-controlled cab of the tractor, Mr. Schultz can see the occasional deer or coyote venturing out from the coulees that scar the prairies. Oil pumpjacks and beef cattle dot the brown fields that roll off in all directions. He has packed his smartphone and a supper, which he eats as the sun drops lower in the sky. On the smartphone, he tweets and texts, sharing planting ideas with other farmers while the 600-horsepower tractor crawls across the prairie.

The diesel motor puts out a low whine as it pulls the seeder over the soil. With GPS and floodlights, Mr. Schultz will be in the field till 11:30 this night. Working well past dark is common during harvest; less so in planting season. Night-time is when accidents occur, he says. Machinery breaks, stuff happens. But time is short, so risks are taken.

Behind him, the seeder plants 25 seeds for every foot it travels, each one a tiny bet in a big gamble.

Follow on Twitter: @ericatkins2