Ontario Grain Farmer October 2021

Despite increasing corn acreage over time, demand has outpaced supply and 2020 was the first year Ontario was a net importer of corn,” says Duff. “The Ontario corn basis is almost always now import basis to Chicago which elevates prices making corn more expensive for feed. Import basis also makes it more difficult to hedge corn prices as a feedstuff. Current corn prices make feeding margins in beef cattle and hogs very difficult.” FORTHCOMING OPPORTUNITY Particularly for corn and soybeans, Duff sees the significant public and private investments in higher-yielding genetics as the cornerstone of meeting future market demands. The opportunity is there, that is, provided yields can keep up with it. The continued expansion of cropland into the province’s more northern regions is an additional asset for filling growing feed grain demand. “Keeping yields for corn and beans going up. If we can do that without much more inputs, that’s the main opportunity,” he says. Emerging areas of the livestock sector can also contribute to feed demand in the province. Aquaculture, for example, brings high corn and soybean feed demands. As Duff describes, significant growth in this sector would not be insignificant for Ontario grain farmers — but one or more major feed suppliers would also have to get onboard. Currently, the aquaculture sector imports feed from New Brunswick. REALITY OF AN EXPORT- ORIENTED NATION From the perspective of Tim Armstrong, director of procurement and risk management with New Life Mills in Saskatchewan, pandemic- induced market disruptions go deeper than ONTARIO GRAIN FARMER 17 OCTOBER 2021 continued on page xx The only feed demand calculation derives from the total number of animals and meat produced. shortages of commodities and associated by- products. Indeed, the run on grains in 2020 and 2021 appears to reflect a wider food security policy gap between export-oriented Canada and other nations. As COVID-19 sunk its teeth into the world economy, many countries — most notably China — began buying more grain. With good strong global export demand, Canadian farmers, particularly in the prairies, emptied on-farm storage to take advantage of greater market access and historic prices. The 2021 crop year, however, has not been kind, with severe drought conditions limiting the volume of new crop for 2021. Combined with low 2020 volumes, Prairie livestock producers have been left in a bind. Armstrong says those farmers, ranchers, and the feed suppliers they work with are looking to the surpluses of Eastern Canada (specifically Ontario) and the United States to fill the void. As time goes on, however, grain purchasers will have to go further and further afield to find the products their customers need. “There’s no old crop due to the strong 2020 export demand. Now as end users, we have to rely heavily on all aspects of the ingredient supply chain and go further afield to buy,” he says. Nationally, Armstrong believes general growth trends in the feed grain market will likely continue as more Canadians — and people worldwide — reach a socio-economic status where higher rates of animal protein consumption is possible. But like Duff, he reiterates the feed grain market is subject to a wide array of influences. From the ability of Canadian ranchers to sustain herd numbers in the wake of drought, to the ever-present need for social license from the public at large, feed grain markets will always be in some state of flux. l Ontario aquaculture producers cultivate approximately 6,000 tonnes of fish (such as rainbow trout and tilapia) every year, accounting for four per cent of Canada’s fish aquaculture production by volume. Michael McQuire, aquaculture and aquaponics specialist with OMAFRA, says research into plant-based rations has made substantial progress. Currently, a standard salmon ration uses soy protein concentrate as the primary plant-based protein, typically constituting 10 to 15 per cent of the diet. Other grain-based ingredients and their inclusion rates in standard salmon feed diets include wheat gluten (five to 10 per cent), wheat flour (10 per cent), corn gluten (10 per cent), and vegetable oil (five to 10 per cent). “Cost is the major barrier in finding alternative ingredients for fish feed formulation. [Fatty acids from] algae biomass can replace fish oils but is two to three times more expensive than fish oils. Insect meal is about twice as expensive as high-quality fish meal,” says McQuire. “Proximity to large scale feed manufacturing is a challenge for Ontario aquaculture. Ontario is without a large-scale feed manufacturer which elevates costs and transport logistics for local producers. In order for one of the two major feed companies to establish a feed mill in Ontario, aquaculture production in the province would have to increase substantially in the future to warrant such a venture.” AQUACULTURE AT A GLANCE