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Canadian grain farmers gain from U.S. drought pain

Marty Jespersen checks his wheat field with his son Seth and his wife Melanie on his grain farm near Taber, Alta.

Todd Korol/The Globe and Mail

Marty Jespersen, a fourth-generation farmer in southern Alberta, is plucking heads off stalks of his wheat crop, inspecting for bugs, fungus, and hail damage. The grasshoppers and ladybugs, harmless this time of year, are so thick that the entire field makes a constant zinging noise. After three days of temperatures above 30 Celsius, the field on his home quarter is waist-high and has turned golden.

"The heads aren't big, but the head count – the density – is unbelievable," he says. The crop could be the third-largest he's ever harvested. "Even my dad – he's been around here a long, long time – would rank this top three."

Down the road, where Mr. Jespersen planted peas and barley, there's nothing left. The pea field is a red, knotted mess, sitting dead just a few centimetres off the ground, making crunching noises underfoot. The barley stands about 15 centimetres tall. These were promising crops, until hail wiped them out.

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"A quarter of my farm is gone," he says. But grain prices will save his skin – and more.

In a summer of devastation for farmers in the U.S. Midwest, their counterparts on the Canadian Prairies are on the verge of harvesting bumper crops. Combines and swathers are already in the fields in parts of western Canada – Mr. Jespersen's neighbours are among the early starters – as producers seek to cash in on a rare combination of stellar crops and record prices.

The wave of good fortune, which comes at the expense of U.S. farmers whose crops were lost to a scorching drought, is not only making a difference in grain producers' pocketbooks, but also their mentality toward the marketplace.

Richard Phillips, the executive director of the Grain Growers of Canada and a farmer from Tisdale, Sask., used to spend his time answering calls from farmers asking the lobby group to beg for assistance from Ottawa. Farmers still call, but they have different demands now.

"My phone does not ring with people calling for government help any more," Mr. Phillips said Wednesday. "People are making a living from the marketplace.

"Today, we hear: 'How do we get more markets open so we can continue to sell at these prices? How do we get the railway system working more efficiently?' It is all about the business of farming now, not about government support."

The potential bumper crop comes just as farmers gain the right to sell their grain outside the Canadian Wheat Board. Just weeks before its monopoly over wheat, durum, and malt barley sales ended on Aug. 1, the CWB changed the way it pays farmers, offering to pay about 75 per cent of the projected pool price for spring and winter wheat shortly after producers deliver the grain to elevators, up from about 65 per cent. The remainder is paid through potential adjustments and a final cheque.

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Now, the CWB is taking on that extra price risk. "We're in a competitive marketplace, and we want farmers to find our programs really attractive," Maureen Fitzhenry, a spokesperson for the CWB, said. "One of the things that they do find attractive is getting money quicker."

Canadian farmers like Taber's Mr. Jespersen, who voted to end the CWB's monopoly, still need weeks of good weather before declaring this growing season a success. But unlike their American counterparts, his crops have potential.

The United States Department of Agriculture has designated 50.3 per cent of all counties as "disaster areas," mainly due to drought. In response, U.S. Agriculture Secretary Tom Vilsack last week expanded the country's emergency measures, allowing livestock producers to use about 3.8 million acres of "conservation land" to counter the shortage of hay and dry pastures. Further, he cut farmers slack on paying insurance premiums because the drought has hurt their cash flow.

All of this has sent prices of key grains soaring. Wheat prices are up about 40 per cent since the middle of June; corn prices have shot up 60 per cent.

In Taber, Mr. Jespersen has varying degrees of hail damage across his entire 2,266 hectares, but his crop is still large enough that he is investing to handle it all: He bought a grain bagging system, which allows farmers to store grain in long sacks when they run out of bin space, because of the size of his potential bounty. To combat the chance fertilizer companies will raise prices next year in response to farmers' returns this year, he bought an extra bin for the fertilizer he is buying now.

But Mr. Jespersen, who was hit by flooding the past two years, knows this year's good luck could end quickly.

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"The bad thing about farming – and the same as stock markets – is somebody has to get hurt for the next guy to benefit," he says. "You don't like to see anyone get hurt, but it is a game you gotta play. Next year that could be me."

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About the Author

Carrie Tait joined the Globe in January, 2011, mainly reporting on energy from the Calgary bureau. Previously, she spent six years working for the National Post in both Calgary and Toronto. She has a master’s degree in journalism from the University of Western Ontario and a bachelor’s degree in political studies from the University of Saskatchewan. More


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