2021 top economic trends: Export risks and opportunities for grains, oilseeds and pulses

Jan 15, 2021

Following the massive setback of an estimated 4.2% global economic contraction in 2020 due to COVID-19, 2021 will likely see a rebound of similar proportions. Although any misstep, whether in new outbreaks or vaccine rollouts, will cast a long shadow of doubt on economic growth this year, a successful defence against the virus may boost global per capita incomes. The big question remains how the health and economic fallouts from COVID-19 will intersect with climate change and geopolitical tensions to impact agricultural production and trade this year.

Last week, we described the influence of those three forces on Canadian red meat sectors. This post looks how these forces may alter global markets for oilseeds, pulses, and wheat.

COVID and the world’s net crop importers: where the virus’ power ends

Many countries can’t grow enough staple crops to meet their domestic consumption needs. Japan, for instance, has a large population and tiny land resources. China has much more land but a massive population. The green and purple bubbles in the figures below (lower-income and higher-income countries, respectively, above the red line) highlight some of Canada’s best global opportunities. These represent net importers – countries that consume more than they produce.

As a net exporter, Canada produces more major field crops than we consume as food, feed or fuel. That means opportunities for Canada as a trusted, reliable supplier of high-quality crops in 2021 – opportunities to meet the needs of net importers that even a virulent virus isn’t likely to diminish.

Consumption and production – or how exports are made

The location of each bubble in the charts below is based on their supply and demand factors in 2019. The consumption/production (CP) ratio is consumption volumes/ production volumes. Because those factors will change in 2021 due to any combination of COVID, climate change and geopolitical tensions (amid other lesser forces), the bubbles’ locations may also change.

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Video: The 15-Year Bet Behind Every New Variety!

Canada is trying to decide how much agricultural research capacity it can afford to lose. Brian Rossnagel believes the better question is whether the country can afford to rebuild it.

The longtime barley and oat breeder makes the case with a simple fact about his profession: the consequences of today’s decisions may not become visible for 10 or 15 years.

“Pick the right parents. That’s the biggest thing,” Rossnagel says. “If you pick the wrong parents, you’re not going to get anywhere—and you don’t know that until 10 years, 15 years later.”

That warning carries particular weight as Agriculture and Agri-Food Canada moves to reduce spending and streamline parts of its science operations. The department’s 2026–27 plan anticipates the loss of approximately 665 positions by 2028–29 and says some research will be reduced where capacity exists in academia or industry. AAFC says the changes will make its science operations more cost-effective over the long term.

For Canada’s seed industry, Rossnagel’s career illustrates what is at stake.

This fall, the retired University of Saskatchewan breeder will be inducted into the Canadian Agricultural Hall of Fame. During his 35-year career at the Crop Development Centre, he helped develop more than 100 barley and oat varieties, including CDC Austenson—one of Western Canada’s most widely grown feed barleys. His induction recognizes not only those varieties, but the collaboration and research system that made them possible.

Rossnagel is quick to emphasize that none of it was the work of one person.

“The first thing I thought about was all the other people who contributed to whatever success I and my program had over the years,” he says. “We know that it’s not an individual who does this. It’s a group—a team.”

That team extends well beyond the breeder whose name appears beside a variety. It includes technicians, pathologists, quality specialists, statisticians, regional testing sites, seed growers and industry partners. It also includes the breeders who came before and those who will carry the germplasm forward.

CDC Fraser barley, for example, moved through three breeding careers. Its parents came from Brian Harvey’s program. Rossnagel advanced the material after Harvey retired, and Aaron Beattie later guided it through registration and release.

That kind of handoff is normal in plant breeding. The person who makes the original cross may never see the resulting variety reach farmers.

It also explains why lost research capacity cannot simply be switched back on when budgets improve.

“If you shut it off, it’s very, very difficult—and particularly costly—to start it up again,” Rossnagel says. “If you have to start from scratch, it’s going to be at least 10 years before anybody notices whether you’re getting anything done or not.”

The concern is not simply how many experimental lines Canada can process. Modern equipment, statistical tools and genetic technologies allow today’s breeding programs to evaluate tens of thousands of lines—far more than Rossnagel could handle when he entered the field in the early 1970s.

But efficiency and automation do not generate every idea.

“If you pare back down, and instead of having six or seven individual scientists concentrating on wheat breeding, you go down and say three people could handle all this, well, that’s half the ideas gone,” he says. “Particularly if you happen to lose the three people who had the really neat and innovative ideas, boy, that’s a problem.”

It is a timely distinction for Canadian agriculture. Consolidating programs may preserve the volume of material moving through a system, at least initially. It may not preserve the diversity of thinking, regional knowledge or willingness to pursue unconventional crosses.

That regional knowledge matters because Canadian agriculture is not one uniform production environment. A variety suited to southern Alberta may face different disease, moisture and maturity pressures than one grown in Manitoba, Ontario or Atlantic Canada.

“Agriculture is applied biology,” Rossnagel says. “Biology, all around the Earth, moves from the poles to the equator. It does not move from Newfoundland to B.C. like politics do.”