This is switching the topic from the Statistics Canada one.
Rockpile
The durum market is one of the toughest markets to analyze. Canada represents over 75 % of world durum trade - particularly after making the adjustment of netting out the difference between high quality durum imports into both the US and EU and exports of lower quality product.
The other issue is the quality one. Durum can be split into two markets. One for high quality and willing and able to pay (domestic, US, Europe, some S. American markets, etc) for pasta (1/2 CWD with at least 12 % and a preference for 13 %). This is well defined in terms of knowing the quantities they will buy each year. The other is a more price sensitive market that will buy lower protein 1/2 CWAD as well as 3/4 CWAD (5CWAD can be use too but only if forced - it mostly gets blended anyway). These countries are for the most part in N. Africa. Their needs vary greatly year to year depending on their crop production, their ability to pay/get credit and finally (important these days) their political stability.
The problem when you are basically the only market remains you can overproduce market needs (underproduce as well). A confounding problem in Canada is quality - high quality pasta require high quality seed.
What does this mean for next year? My thoughts are bigger durum acres in Western Canada (yield is a 100 % wild card). We have the potential (realizing I am making comments 7 months before seed is in the ground) to over produce the markets needs. Over the next 6 months, we will also get a better handle on what is happening in N. Africa (seeded during our mid winter/harvest in the late spring/early summer).
Based on this, I would be using CWB durum premiums over CWRS lower than today values (more likely 25 cents/bu). If you live in a region that is suited to growing durum , I would likely keep a normal durum acreage going in based on my crop rotation/risk management strategy.
Another couple of comments on durum. Durum is one wheat where we (the Canadian industry) need to develop new markets. Earle Geddes (CWB) indicated the GRL (grain research lab) is looking at alternative uses in flour/bread. As Canada move ahead with structural changes to the grain industry, whose responsibility should market development be?
A second revolves around the fact Canada carried 2.8 MMT of durum into the 01/02 crop year. Most of this carryover was 3 CWAD but there was a fair bit of low protein 1/2 CWAD. If you were someone in the CWB sales deparment, what decision would you have made in the durum market with regards to selling high quality product at a high value/holding lower quality back to maintain price versus being more aggressive on all grades/potentially lowering total payment prospects.
Rockpile
The durum market is one of the toughest markets to analyze. Canada represents over 75 % of world durum trade - particularly after making the adjustment of netting out the difference between high quality durum imports into both the US and EU and exports of lower quality product.
The other issue is the quality one. Durum can be split into two markets. One for high quality and willing and able to pay (domestic, US, Europe, some S. American markets, etc) for pasta (1/2 CWD with at least 12 % and a preference for 13 %). This is well defined in terms of knowing the quantities they will buy each year. The other is a more price sensitive market that will buy lower protein 1/2 CWAD as well as 3/4 CWAD (5CWAD can be use too but only if forced - it mostly gets blended anyway). These countries are for the most part in N. Africa. Their needs vary greatly year to year depending on their crop production, their ability to pay/get credit and finally (important these days) their political stability.
The problem when you are basically the only market remains you can overproduce market needs (underproduce as well). A confounding problem in Canada is quality - high quality pasta require high quality seed.
What does this mean for next year? My thoughts are bigger durum acres in Western Canada (yield is a 100 % wild card). We have the potential (realizing I am making comments 7 months before seed is in the ground) to over produce the markets needs. Over the next 6 months, we will also get a better handle on what is happening in N. Africa (seeded during our mid winter/harvest in the late spring/early summer).
Based on this, I would be using CWB durum premiums over CWRS lower than today values (more likely 25 cents/bu). If you live in a region that is suited to growing durum , I would likely keep a normal durum acreage going in based on my crop rotation/risk management strategy.
Another couple of comments on durum. Durum is one wheat where we (the Canadian industry) need to develop new markets. Earle Geddes (CWB) indicated the GRL (grain research lab) is looking at alternative uses in flour/bread. As Canada move ahead with structural changes to the grain industry, whose responsibility should market development be?
A second revolves around the fact Canada carried 2.8 MMT of durum into the 01/02 crop year. Most of this carryover was 3 CWAD but there was a fair bit of low protein 1/2 CWAD. If you were someone in the CWB sales deparment, what decision would you have made in the durum market with regards to selling high quality product at a high value/holding lower quality back to maintain price versus being more aggressive on all grades/potentially lowering total payment prospects.
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