May 4, 2022

The fallout from the war in Ukraine shakes Manitoba’s agricultural sector



As the brutal war in Ukraine wreaks havoc on the lives of millions, it also means a significant disruption to normal economic production.

And since the Black Sea region is one of the great breadbaskets of the world, this means that agricultural production and export are at a standstill.

Russia and Ukraine account for about a quarter of global grain trade, and supply chain disruption is driving up just about every agricultural commodity price, with some hitting historic highs.

Higher prices are a boon to Manitoba farmers, but many local industry experts say the month-long war hasn’t changed planting decisions to take advantage of supply shortages of specific crops .

For example, Ukraine accounts for nearly 50% of global sunflower oil exports and although there are reports of increased sunflower plantings in the United States and Argentina, this does not appear to be the case in Manitoba.


MIKE DEAL / WINNIPEG FREE PRESS

Farmers like Chuck Fossay have been planning what to plant this year in light of all the market disruptions – including the war in Ukraine – which have driven prices up significantly in many commodities.

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MIKE DEAL / WINNIPEG FREE PRESS

Farmers like Chuck Fossay have been planning what to plant this year in light of all the market disruptions – including the war in Ukraine – which have sent prices for many commodities soaring.

The province accounts for about 90% of the sunflower grown in Canada, but it only accounts for about 1% of Manitoba’s actual farm area.

Most growers make their seeding decisions for next year at harvest time, six months before seeding. This is also the time when farmers will apply fertilizer for next year’s crops.

Chuck Fossay, a grain farmer from Starbuck, just west of Winnipeg, said when thinking about crop selection, military conflict isn’t the only consideration affecting farmers.

“The war in Ukraine is a wild card. But another big wild card is that fertilizer prices have more than doubled from a year ago,” he said.

Because the soil was so dry last year, some farmers may have chosen to wait to apply fertilizer, which may impact their decision to plant those fields this year. For example, some crops like soybeans and sunflowers don’t require nitrogen fertilizers and some can switch to those crops for those fields, Fossay said.

“The war in Ukraine is a joker. But another big wild card is that fertilizer prices have more than doubled from a year ago. » – Grain farmer Chuck Fossay

Even if these kinds of decisions are made, they are not expected to change Manitoba’s traditional crop ratio.

With about 10 million acres of cropland in Manitoba, about 30% is typically planted with wheat, 30% canola, and the rest is split between soybeans, barley, oats, flax, peas and sunflower.

Neil Townsend, senior market analyst at FarmLink Marketing Solutions, a grain marketing company, said, “We don’t see any significant changes in acreage in Manitoba this year. The number one risk management technique for farmers is crop rotation. far from it and with so much uncertainty and volatility, many farmers are sticking even more to crop rotation.”

But Daryl Domitruk, executive director of Manitoba Pulse and Soybean Growers, said it’s hard to predict sowing results this year, making it one of the riskiest predictions to make at this point in history. .

“Normally we have a pretty good idea and can make reasonably accurate predictions, but there are so many moving parts this year,” he said. “Everyone I’ve spoken to is hesitant to make predictions.”

“Normally we have a pretty good idea and can make reasonably accurate predictions, but there are so many moving parts this year.” – Daryl Domitruk, Executive Director of Manitoba Pulse and Soybean Growers

He said that although some think there will be an increase in soybean and pea production because they do not need nitrogen fertilizers, which are very expensive this year, the drought of the year last left a deficit of good quality pea seed.

And while soybean prices are good, prices for everything else are also high.

Fossay said: “I would say this is probably the first time in several years that wheat is going to bring me a significant profit. Ten years ago when I was budgeting for wheat, I could often hit the threshold of profitability, I could make $20 per acre, I could lose $10 per acre Right now almost any crop you grow if you get an average yield will definitely make a profit.

So while sunflower might be an obvious opportunity, the market in Canada has not always been able to support a lot of volume.

While sunflower oil is one of the most popular vegetable oils in Europe, this is not the case in North America. Even the confectionery market for edible sunflowers is shrinking after a processing plant in Lethbridge closed a few years ago.




<p>MIKE DEAL / WINNIPEG FREE PRESS </p>
<p>Fossay inspects a bin full of corn on his property about 30 kilometers west of Winnipeg.</p>
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<p>MIKE DEAL / WINNIPEG FREE PRESS </p>
<p>Fossay inspects a bin full of corn on his property about 30 kilometers west of Winnipeg.</p>
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<p>Scoular Canada, which operates a sunflower processing plant in Winkler with about 30 employees, buys sunflower seeds from Manitoba farmers for edible snack foods for humans and black oil sunflowers for bird feed.			</p>
<p>Although the market for bird food has been on the rise since the pandemic — people have more time to feed birds in the backyard — it hasn’t driven prices up.			</p>
<p>“The war in Ukraine is having an effect and people are watching, but there hasn’t been a big swing in prices lately,” said Jody Locke, an official at Scoular.			</p>
<p>Whatever crop selection Manitoba farmers make, the war in Ukraine is having a significant impact on the Manitoba farming community.			</p>
<p>“The Ukrainian community is the backbone of agriculture in our province,” said Brenna Mahoney, General Manager of Keystone Agricultural Producers.  “It really hits home on an emotional and personal level, not to mention business decisions. People are worried about what’s next.”			</p>
<p>martin.cash@winnipegfreepress.com			</p>
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Martin Cash

Martin Cash
Journalist

Martin Cash has written a column and business news for the Free Press since 1989. During those years he wrote through a number of business cycles and the rise and fall (and rise) of the fortunes of many local businesses .