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Ontario Grain Farmer Magazine is the flagship publication of Grain Farmers of Ontario and a source of information for our province’s grain farmers. 

Overcoming challenges


2014 WAS A year with many challenges continuing for both the Ontario farmer and the agriculture industry in general. Harvesting the crop this fall and the issues around that will be fresh in everyone’s mind, but also the late spring and the headaches associated with it are not that distant of a memory.


Marketing decisions are never easy, but looking forward we expect this era of post biofuel led growth to cool off, leaving producers to deal with lower prices. Agriculture has been hooked to the energy cart for some time now. Mandated biofuel growth is over and there are new sources of crude (for example, fracking) and more energy efficient vehicles which continue to put pressure on energy. 

Increased access to information and speculators coming and going from the market will keep the volatility in the markets high, resulting in more opportunities to price commodities. Developing a marketing plan and looking at revenue per acre while setting realistic goals, with open orders in place, will help to take advantage of volatility and opportunities when they present themselves. This will be of greater importance going forward — not just being a price shopper or finding the best basis on the day you have to sell. Finding partners, like Thompsons, to review your business and focus on not just the best decision for today but planning for the future, will be of increased importance and knowing the risk around making a decision or delaying it.

We [Thompsons] spent the early months of 2014 participating in export programs out of the lakes, although it took what seemed like forever for them to open this spring after a long winter. Sales were arranged in advance and we saw active shipments from the Great Lakes ports.

From a farmer perspective, once we reach export value (either neighbouring U.S. or overseas), that is about as cheap as we need to get — as we are able to compete with other world values. When at export values, significant demand exists particularly in the overseas markets; and the world demand is much greater then what Ontario can produce. This is a bit of a simplistic view in that grades and other quality factors do also come into play.

As Chicago corn futures values fell in late spring and early summer, we experienced less farmer selling and Ontario basis values rallied to import levels. This is as high as basis needs to get, as at that point Ontario is able to source corn from other areas, and other than in response to logistical issues, day to day basis doesn’t need to get any higher.  Ontario is able to find sellers of corn from other areas to keep animal feed and industrial users going. This is important as Ontario is currently sitting at, or close to, import values. As long as you and your neighbour don’t sell at the same time, we should be at, or around, import basis values. If for some reason we wake up one morning and everyone is a seller and we have to find demand outside of the Ontario trade and export corn, we could lose $1 per bushel or $40 per mt quickly. While I don’t think that is a likely scenario, it is a risk worth knowing and the middle ground of farmer sales outpacing demand could still greatly impact basis levels. This risk could be greater than any Chicago rally or fall so talk to your marketing partners and be aware of it.

We saw the 2014 wheat crop reduced due to poor planting conditions last fall and a tough winter caused significant winterkill with harvested acres approximately 600,000 or down about a third from 2013.

Ontario soft wheat demand is the equivalent of 400,000 acres and production over and above that needs to find an export home either in the U.S. or overseas markets.

Wheat intentions this fall were for one million acres plus. It looks like many of the areas of the province were close to intended acres; however, Huron, Perth, Grey-Bruce, Simcoe, and Wellington county areas struggled and probably only planted half of intended acres. Overall, estimates are less than 600,000 acres were actually planted this fall. Variety specific programs like Ava and Branson, which have desirable end use qualities that millers are willing to pay a premium for, allow producers to participate in premium markets of up to $.25/bu or $10/mt. They also reduce downgrade and discount risks. These benefits make buying certified seed and reinvesting in genetics a popular choice at planting time.

One thing for farmers to keep in mind is that wheat is grown on almost every continent and is a relatively cheap crop to grow. In an era of low prices we often see the world produce a lot of wheat as it can be used as both a food and feed grain. This will likely impact the price difference between wheat and corn and see that spread narrow.

Overall, I think the Ontario farmer needs to find those business partners that will keep them informed and have the sometimes difficult conversations about the risks and opportunities available.  You should not just be looking out your own kitchen window, but stepping back and looking at the regional, provincial, North American, and global perspective.  •

Ken Whitelaw has been involved in the grain industry, primarily with a domestic wheat focus, for 14 years. He joined Thompsons in August 2013, with the Lansing Trade Group and The Andersons acquisition, being an employee of Lansing Trade Group at the time. He is currently grain marketing manager for Thompsons in Blenheim, Ontario.


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