The main symbol of the Depression-era mentality was the two enormous chest freezers in my grandparents’ basement. This was in addition to the canned fruits and root vegetables that were stored in the basement. These stocks were for essentially three people. One of the lessons from the Depression was that food supplies for at least one year were required — just in case something bad was going to happen. The world may have been moving to a just-in-time food-distribution model, but it was not a theme in my grandparents’ house.

Food security is coming to the fore in this COVID-19 world and there are signs that supply chains are beginning to buckle under the strain. Meat supplies will be strained if plant closures due to COVID-19 continue to occur. One of the largest clusters of COVID-19 cases in the U.S. is now located in South Dakota, at the Smithfield Foods pork plant in Sioux Falls. Argentina and Brazil are experiencing delays in loading grain vessels due to COVID-19 and China is having trouble unloading boats that arrive. Russia, Romania, Ukraine and Kazakhstan all have issued some form of grain or flour export restrictions as those countries monitor progress of their 2020 crops.

Stocks of grains globally are more than adequate to buffer these supply chain interruptions. At least, that is what the markets currently believe. The only problem is that although stocks are at near record levels, most of the surplus grain in the world is now in China. The three major grain staples — wheat, corn and rice — are projected to hit 777.5 million tonnes by the end of the respective crop years. Of those stocks, 60 per cent will be located in China. Ten years ago, 35 per cent of the global stocks were located in China. Since China does not normally export significant amounts of grain, these stocks are not available to the market.

The rest of the world (ROW, in the graph shown above) has maintained relatively constant stocks of the three major grains as China has been increasing its stocks. Only 310 million tonnes of major grain stocks are located in the ROW countries. This is up by only 15 per cent from 2010-11 levels.

Do these relatively low level of stocks matter? The answer is that the low stocks levels will not matter until we encounter a problem in the major exporting countries. If a problem does occur, there is only one country with the equivalent of my grandmother’s freezers, and that is China. Markets, in my opinion, continue to be lulled by the overall stocks levels and are not pricing in the current risks to the global supply chain.

— Bruce Burnett is director of weather and markets information for MarketsFarm, a premium subscription service owned by Glacier FarmMedia.

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Then the weather in early April dropped significant amounts of rain and snow across northern and eastern growing areas of the Prairies. Snowfall amounts ranged from 15 to 30 cm in northern Alberta, eastern Saskatchewan and Manitoba. Total precipitation amounts from the storms ranged from 10 mm to 30 mm.

Unfortunately, these regions have a substantial amount of the unharvested 2019 crop left to harvest. There may have been some harvest in the drier regions this winter, but the bulk of the estimated five million tonnes of canola, wheat and other crops is still left to harvest. These rain and snowfall events will delay the start of harvest operations until late April or early May.

The other impact of the storms in Manitoba is the increased probability of flooding due to the late-season snowstorm. The system that provided the snow tracked up through North Dakota, which has added to the snowpack on both sides of the border. The crest of the Red River is expected in about a week at the U.S. border and will likely crest in the central areas of the river valley in the third week of April. This means planting in the Red River Valley will likely be delayed into mid-May.

The weather of late has certainly reduced the chances of planting the 2020 crop on time in northern and eastern Prairie growing regions. Farmers in southern and central growing regions of the Prairies still have a decent chance of getting the 2020 crop planted in the normal time frame.

Statistics Canada is beginning to survey for its planting intentions report that will be released later this month. Most farmers in the northern and eastern growing areas of the Prairies will have a large amount of uncertainty about what crop area will get into the ground and what types of crops are planted.

— Bruce Burnett is director of weather and markets information for MarketsFarm, a premium subscription service owned by Glacier FarmMedia.

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The flour grind (wheat used to make flour) in Canada has averaged about three million tonnes over the past five years. There is a slight increase in flour production over time as population growth moves flour demand higher. In Canada, the primary wheat used to make flour is CWRS (Canada Western Red Spring), so the increase in flour production means CWRS use will follow suit. Mill demand for flour is somewhat seasonal with two peaks during the year. The first peak occurs during the summer — the hot dog and hamburger season. It is difficult to tell whether the epidemic will impact the June-to-August grilling/baseball season but it is likely safe to say that it will likely be off to a slower start than in previous years. The second season is the Christmas season, with mill runs peaking in November to supply the needs for all the baking consumed during Christmas.

What does this mean for wheat demand this crop year? Using the actual data to January of this crop year, domestic flour grind was 1.63 million tonnes, almost exactly the same as in the 2018-19 crop year. If we estimate that February grind was close to average and then put in an increase for the March through July period, the wheat total this marketing year will hit close to 3.4 million tonnes. This is an increase of 200,000 tonnes from last year. Increased mill demand is also being reported in the U.S., which should also help boost Canadian wheat exports south of the border.

One important question to be determined is if this current situation will result in long-term changes to customer demand. Will people continue to bake at home after this pandemic is over? It would be nice to see long-term demand from increased in-home use, but it is more likely that people will return to the world of convenience after this crisis is over. I hope not, but this is the most likely outcome.

— Bruce Burnett is director of weather and markets information for Glacier FarmMedia and for MarketsFarm, its premium subscription service.

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Most of us who are involved in agriculture know how important the business of growing food is to our society. This is why we are in the industry and quite frankly, most times it’s frustrating to have to explain how complicated and important this business of growing and distributing food really is. I have no doubt that after this pandemic is over people will quickly return to their ho-hum attitude toward the fact that grocery have fully-stocked shelves with food produced around the globe.

We will be planting the 2020 crop in North America in the middle of the most serious pandemic in over 100 years, and the markets are not concerned. In North America over 200 million acres will get planted in a mere eight weeks or so. Whatever the weatherman throws at farmers, whatever the input supply chains do to disrupt seeding, farmers will get this job done. It would be nice to see some recognition for keeping the store shelves stocked, even if there isn’t a pandemic.

Markets are recognizing the value of agricultural commodities relative to other investments. Although the rally in gold has boosted the commodity to the top of the list, spring wheat and canola have managed to continue to hold onto their value relative to other investments. In other words, agriculture commodities are an island of stability in stormy seas caused by the COVID-19 outbreak.

— Bruce Burnett is director of markets and weather information for Glacier FarmMedia and its MarketsFarm premium subscription service.

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