Canada needs wheat 'facelift' to push back canola

Canada, the world's second largest wheat exporter, needs a "facelift" to its varieties of the grain to avoid further losing out to canola, whose sowing this year might increase even further than officials believe.

Canadian farmers, who this year for the first time will sow more canola than non-durum wheat, will continue to seek alternatives, notably oilseeds, unless offered improved types of the grain, said Brent Watchorn, a senior executive at crop handler Richardson International.

Growers were being attracted to canola by higher returns, of $110-150 an acre, compared with some $30-90 an acre for wheat.

Rival oilseed soybeans were also "continuing to push north" from the US, and moving from a stronghold into Manitoba into Saskatchewan, backed by returns of $200-290 an acre.

'We need a facelift'

The better returns reflected in part world markets, and relatively depressed wheat values, but also research drives by seed groups which had boosted Canadian canola yields to some 35-36 bushels per acre, from less than 25 bushels an acre a decade ago, Mr Watchorn said.

Seed groups have focused on improving the likes of corn, canola and soybeans over wheat because of the grain's more complicated genetic structure, and the rejection by the European Union, the leading wheat-grower, of genetically modified technology.

The "reality is" that Canada's wheat research drive, led by government and university, could not "put the same amount of resources into [seed] technology as the major technology companies can do", Mr Watchorn, Richardson's senior vice-president, grain and crop input marketing, said.

"We need a facelift" in wheat varieties available to growers.

"There are just not the yields. Just not the same incentive as to keep with corn and canola for farmers," he told the International Grains Council conference in London.

Extra?plantings??

Indeed, Canadian canola sowings might hit 21m acres this year, ahead of the 20.4m acres that the country's farm ministry has forecast.

In part this was down to skimping on rotations with other crops which best agricultural practice suggests, for reducing disease risks.

However, some farmers had been planting the rapeseed variant "year in, year out for six years in a row without any issues", Mr Watchorn said.

An extra 600,000 acres would, after an allowance for losses, boost Canada's canola crop by more than 21m bushels at a yield of 36 bushels per acre.

Capacity increase

Extra output would boost hopes for world canola output?depressed by expectations of a poor crop in the European Union, the top grower, and with dryness raising questions over Australia's output too.

However, looking further ahead, Canada looked set to?consume an increasing amount domestically of its canola production, with?crushing capacity on track to rise to 12.2m tonnes by?2016,?to?judge by company announcements and market intelligence.

Current capacity is 9.3m tonnes.?

The comments came as Mr Watchorn spoke on a deregulation of the Canadian grains market, which he estimated would leave Richardson and Glencore with market shares of 34-35% in grains, and Cargill with 15%.

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