As war in Ukraine disrupts global wheat supply, what can Canada do to help?
Wheat prices soaring following Russian invasion, but so are costs of transportation and fertilizer
Over the two years of COVID-19 pandemic restrictions, no international delegations have come to Cereals Canada to learn how they can use Canadian wheat in their bread, pasta and noodles.
But that is expected to change with the war in Ukraine and economic sanctions against Russia hitting the breadbasket of Europe hard.
"We will know in the next week or two whether that's going to bring new customers to the table," CEO Dean Dias said during a recent tour of Cereals Canada's Winnipeg-based mill, bakery, noodle and pasta production lines.
Russia is the world's top wheat exporter and the largest producer after China and India, according to data from the UN's Food and Agriculture Organization. Ukraine is among the top five wheat exporters worldwide.
Parts of Ukraine now under fire, following the Russian invasion that began Feb. 24, play a pivotal role in the country's wheat production and export.
If the war continues, farmers won't be able to plant or harvest crops this spring. If Russian troops block access to the Black Sea at the main port of Odesa, the supply of Ukrainian wheat already in bins will be disrupted.
'We are hoping for a swift, peaceful resolution in the Ukraine so … people will have food to eat," Dias said.
"That's the business we are in, is providing global food security to the world. And we are working with our farmers and value chain to make sure that customers and other countries have enough food at the table."
Cereals Canada is a not-for-profit, industry association that promotes the use of Canadian grain, mainly to international customers. Its staff can show visitors how to properly mill different types of wheat, and then use the clients' recipes and workflows to create their end product.
"We get to sample a lot of food" from around the world, Dias said, opening up a package of noodles created for an Asian market.
"We claim in this bakery, we've probably made every bread that is commercially baked around the world."
WATCH | How Canadian wheat is used in products around the world:
Canadian farmers already produce about 12 per cent of the world's wheat, exporting to about 70 different countries, according to Dias.
However, it's a higher quality and has more protein than much of what is grown in Russia and Ukraine, and is more expensive to purchase, he said.
He also notes that with the drought in Western Canada last year, yields were lower and soil conditions may not be conducive to bumper crops this year, so there's a limit to how much Canadian farmers can ramp up their production.
"We have enough supply to supply high-quality end users," Dias said, but not enough "to fill every wheat requirement around the world."
Most farmers have carefully planned crop rotations for their fields, which helps the soil replenish needed nutrients, improving growing conditions and sustainability.
For Doug Martin, who has a family-run mixed farm near East Selkirk, just northeast of Winnipeg, it is far too late to make big changes in what he'll put into the ground this spring.
"I set my crop rotations [for the next year] when I sit on the combine … and kind of decide which crops we should grow," he said.
As Martin gets his machinery ready for planting, he's watched the price of wheat increase more than 50 per cent since Ukraine was invaded, jumping to 14-year highs.
"It's the highest wheat's ever been, so it's an incredible price. Too bad it's happened on the back of a country like Ukraine."
Martin expects to benefit from those prices on wheat he had already planned to grow.
On the flip side, farmers are also affected by the sanctions against Russia, which are creating higher costs on everything from transportation to the fertilizer needed to boost yields.
'This is an important moment'
Fertilizers were already expensive before the invasion, says Sylvain Charlebois, a Canadian researcher and professor in food distribution and food policy at Dalhousie University in Halifax.
"The night of the invasion, fertilizer prices jumped, like, $200 USD overnight," he said. "Look at Nutrien stocks."
As of Wednesday, stock in the Saskatoon-based fertilizer company was up more than 25 per cent from two weeks earlier.
"That's telling," said Charlebois.
He worries the war could lead to severe food shortages in vulnerable countries, given that together, Russia and Ukraine account for 30 per cent of global wheat exports. Middle Eastern and North African countries rely heavily on those wheat imports.
Charlebois would like to see fertilizer companies do more to help farmers, rather than boost their prices to increase profits.
"The fertilizer industry is known to be somewhat greedy at times, and farmers actually need to increase yields not only in Canada but around the world."
Companies in North America can play a critical role in ensuring global food security, said Charlebois.
"This is an important moment here. We're looking at a war which can potentially increase in scale dramatically, very quickly.
"And so we can't really rely on the agricultural output that would normally come out of that region for the next little while."
WATCH | What Canada can do to help the global wheat supply:
