The Canadian Imagination

What it means to be Canadian; examining and reworking Canada as a nation.

Monday, June 16, 2008

Zero-sum game

It is the nature of the global marketplace that the misfortunes of one quickly become the gains of others.

Over the past several weeks, Iowa has been devastated by flooding. At one point 83 of 99 counties were declared disaster areas. At least in some parts of Iowa the flood waters are now finally beginning to recede, but easily 90% of this year's Iowa corn crop is gone. To faciliate a late re-planting, seed companies have begun moving 90- and 100-day corn variants into the area, but even with ideal summer growing conditions (no damaging hail storms, no drought), the new crop will still flirt with killing frosts for nearly a month before it can be harvested. This year, Iowa will not be the 'Tall Corn State'.

The United States normally produces 280 million metric tons of corn, over 40% of the world's corn. As a direct result of the Iowa floods, the United States Department of Agriculture expects that total United States production will drop by 10%. Responding to this estimate, speculators on the agricultural futures market have now raised the price of corn in the Chicago exchange to nearly $7 USD a bushel.

Across Canada, so far this year, the weather has come as close to a perfect growing season as the nation has seen in many years. Glitches, of course, a storm here and a fire there, but where there has been significant agricultural damage, it has been very tightly localised. (The major exception is the southwestern Ontario apple and cherry crop, which has been 90% destroyed by late frosts.) If the weather continues as it has been, most parts of Canada stand to bring in bumper crops, quite probably to record-high market prices.

Nothing in farming is easy: but there is only so much that labour and technology and education and even passion can accomplish. Ultimately, it is entirely up to the weather if there is going to be a harvest at all ... and it is almost entirely upon the harvest of others that the final market price will utterly depend. A single farmer is a very small factor in that global equation.

Let the corn farmers of Canada remember the source of their current good market fortune.

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