Canada has mountains of surplus wheat that later the Empire may need. Meanwhile it must be stored, and financed. The problem is—where, and how? And can we afford to go on growing wheat that we can’t sell?

W. A. MACLEOD December 15 1940


Canada has mountains of surplus wheat that later the Empire may need. Meanwhile it must be stored, and financed. The problem is—where, and how? And can we afford to go on growing wheat that we can’t sell?

W. A. MACLEOD December 15 1940




Canada has mountains of surplus wheat that later the Empire may need. Meanwhile it must be stored, and financed. The problem is—where, and how? And can we afford to go on growing wheat that we can’t sell?

NEVER, since the days of Gargantua, has there been such a fat baby as the wheat baby Canada now has on its lap. We are proud of our baby, we are glad that it came; but it is so enormous that it is embarrassing. It has outgrown all its clothes. It is hard to handle, difficult to carry, taking up altogether too much room in the house. And that isn't all; for last year's wheat baby was a big one too, the third largest of our wheat family, and still takes up a great deal of space in our crib. With one shift and another, we may be able to shelter these two. but what are we going to do with next year’s wheat baby when we still have two on our hands? The 1939 wheat crop was more than 500 million bushels. A fairly accurate estimate of this year’s crop is 561 million bushels. A nephew, writing from a Saskatchewan farm a couple of miles from where I homesteaded in 1906, states: “Dad has threshed five thousand bushels of wheat and all his granaries are bursting at the seams. What he will do with the rest, nobody knows.” Before the war, there was a steady stream of wheat

flowing from our ports to foreign markets. Nowadays, it goes in spurts, the great bulk to the United Kingdom, as European ports under Hitler domination are bottled up by the British fleet.

How much wheat will the United Kingdom buy from us the present crop year? Nobody knows, or if they know they won’t tell. Sixty bushels out of every hundred bushels now ground in British mills are Canadian wheat. But England is plowing up thousands of acres of her grassland and may not need to imjx>rt so much food from abroad. At the end of our crop year, July 31, 1940, more than half of the 300 million bushels carried over in our elevators or stored in the United States had been bought by the British Government for future delivery. This is moving leisurely across the Atlantic, with world movement of wheat so far this crop year being just about half of what it was a year ago.

During the previous crop year, Canada exported slightly more than 200 million bushels of wheat, including our flour shipments. We cannot hope to market that quantity the present crop year, with former good customers— Belgium, Holland, Denmark, Norway and Switzerland— unable to buy from us. But let us be optimistic and hope that we can get rid of, say, 175 million bushels of wheat. Canada will do very well indeed if we export that much, for estimates of world trade in wheat for 1940-41 run between a low of 450 million bushels to a high of 550 millions. A hundred and seventy million bushels for export of wheat and wheat as flour, 125 million bushels for seed, feed and bread for Canada for a year, total 300 million bushels. It looks as though all we can sell this year is the carry-over from last year. Therefore, the entire

wheat crop of 1940—around 560 million bushels—may be regarded as a surplus.

What are we going to do with all this wheat? To give all farmers a chance to market part of their crop, the Wheat Board set a delivery quota for each farmer, of five bushels per seeded acre. Later this was raised to eight bushels, higher at points with light crops. Another increase to ten bushels is expected.

We have 5,798 grain elevators, including country, terminal and mill elevators, a storage capacity of 424,289,570 bushels. At the beginning of the crop year, there was a carry-over in Canadian elevators of 273 million bushels of wheat and sixteen and a half million bushels of coarse grains, besides twenty-seven bushels of Canadian wheat in bond in the United States. But last year, and the present year, elevator companies—including the pools, the United Grain Growers, the line elevator companies—have added a great deal of additional space by building temporary annexes or bins which may accommodate sixty to sixty-five million bushels.

In other words, total elevator space in Canada, including new temporary bins and annexes, making a small allowance for working space, is 480 million bushels. Allowing storage space of, say, fifteen million bushels for coarse grains would leave a total elevator storage space of 465 millions. Add thirty to thirty-five million bushels for wheat stored in the United States, and the grand total of wheat stored in our elevators and in bond in the United States, July 31, 1941, would be 500 million bushels, leaving sixty million bushels to be stored on the farms. Purely temporary storage amounting to many millions of bushels may be provided by unloaded railway cars, by filling up the great

grain carriers at lake ports at the close of navigation, but as all this grain must be unloaded in the spring, it is merely shuffling the cards to start calculating what this would amount to.

The first thing to do is to see that the surplus wheat is sheltered against the rain and the snow. There is the same frantic haste to provide shelter for this year’s bumper crop that there was to find incubators and adequate living quarters for the Dionne babies. As fast as they can find lumber and carpenters, the wheat pools. United Grain Growers, line elevator companies, are building additional annexes and bins with capacities from twenty and thirty thousand to seven hundred and fifty thousand bushels.

Farmers are patching up their old granaries, filling up barns and stables emptied of horses by the wdde use of tractors. Those who can afford it, and can get the lumber, are building new granaries. Unfortunately, the supply of dry lumber is limited, as so much is required for wfar purposes, and green lumber warps and splits when used for building before it is properly seasoned. Besides, lumber costs money, and prairie farmers are short of cash and short of credit. Farmers with large crops and few granaries, much as they disliked doing it, left their grain as it came from the machine, piled up in a heap on the ground, hoping to be able to find elevator room for it before winter. Some made circular bins with hog wire fencing and building paper. A few stacked part of their crop. There are also a considerable number of farmers who have plenty of other troubles but no storage worries because they had little or no returns, for there are some fairly large areas, mostly in Saskatchewan, where the crop ran from a partial to a Continued on page 29

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complete failure, although the province as a whole had a tremendous crop.

Government Agreement

' I 'HE Dominion Government has agreed to buy through the Canadian Wheat Board, on delivery, all the wheat marketed of the 1940 crop, at 70 cents a bushel, basis No. 1 Northern, Fort William.

Payment of 70 cents a bushel assures the producer at the local elevator, when allowance is made for spreads between grades, handling charges and freight, an average price of around 52 cents per bushel. Estimating seventy to seventyfive million bushels for seed and for wheat fed on the farm, the Dominion Government will have invested in the 1940 crop when the wheat is all delivered, close to $360,000,000. In addition, the storage charges of one forty-fifth of a cent per day, or two thirds of a cent a month, are now paid by the Government whether the wheat is stored in an elevator or whether it is still on the farm, as the price paid by the Canadian Wheat Board to producers is advanced half a cent per bushel every twenty-two days, up to July 31, 1941, the end of the crop year. The first half-cent advance went into effect on November 1, 1940. As a small offset against the cost of carrying the crop, a processing tax of 15 cents per bushel on the portion of the crop milled for domestic consumption is expected to yield between seven and a half and eight million dollars.

At a conference called by Premier Bracken of Manitoba, August 15 of this year, the Government was urged to make*a partial payment on wheat which the farmer is unable to deliver because of the quota restriction. It was argued that since the Government has agreed to buy, eventually, all the wheat marketed, this may be done yet on the balance left on the farms for which elevator storage cannot be secured.

No information has been given out by our Government as to the price paid by the British Government for our wheat. But as Canadian millers, through the processing tax, pay fifteen cents per bushel above the advance of 70 cents at Fort William made by the Wheat Board, it is a fair guess that the price paid by the Cereals Import Board is in the vicinity of 85 cents per bushel.

The price received by the producer is not a profitable price, but if the Government had not set this minimum price, Western Canada would be flat on its back, bankrupt and helpless. Furthermore, the substantial investment of millions in wheat, for which it will have to find a market, has been made by the Dominion Government to protect a much greater investment of billions of dollars represented by the farms, implements, elevators, flour mills, Eastern factories, railways, lake and ocean steamers, and canals, which depend largely or wholly on Canada’s wheat industry for their solvency.

The Prime Minister of Great Britain and many people in Canada would like to see huge accumulations of nonperish-

able food in the Dominions to feed hungry Europe when it gets rid of Hitler.

That’s the situation at the moment. But what are we going to do in the future? What are we going to do about next year’s crop if we can’t sell this year’s? Fall moisture conditions on the prairies were the best in years, and while two bumper crops in succession are rare, they are possible. Will Canada, therefore, as part of her war policy, pay her food-producing battalions a reasonable living wage and provide storage space on the farms, or close to them, for all the wheat we can grow next year?

Or will we have to reduce drastically the production of wheat?

Real Solution Still To Be Found

nPHUS far, no responsible body in Eastern or Western Canada has proposed a carefully thought-out solution of the dilemma. The Dominion Government, which enjoys the confidence of the British Government, should know by now whether as a war measure we should seed an acreage that might add more hundreds of millions of bushels to our surplus of wheat. But producer organization officials are insistent that if wheat production is reduced farmers should get sufficient returns from the smaller quantity they will have to sell to enable them to continue farming.

On the other hand, it is claimed that the Dominion Government cannot continue to guarantee even a low minimum price for wheat without setting a limit on the quantity the Government will buy; that a quota based on the average yield of farms over a term of years should be set before seeding the crop, with some special allowance for the smaller farmers.

But what are we going to do with the land thus thrown out of use?

The total area of tilled land in Canada averages around seventy-seven million acres, fifty-seven of these in the prairie provinces. More than twenty-seven million acres were in wheat this year. If our wheat acreage has to be drastically reduced, what should w'e do with the land taken out of wheat?

Dairying? We churn every year on the prairies more than a hundred million pounds of butter. It takes time and money to build up dairy herds, but even a moderate increase in butter production might give Canada a butter problem to spread on our bread grain problem.

Beef cattle? Nearly half the beef market in Canada comes from prairie farms and ranches, but a little leeway in the United States quota might warrant a substantial increase and the seeding down to grass of marginal land that never should have had the sod turned “wrong side up,” as the Indians told the palefaces.

Sheep? Wide expansion of our wool, lamb and mutton industry is warranted at present prices, when it is borne in mind that Canada's sheep population is the same as it was seventy years ago.

Swine? Alberta alone will market more than a million hogs this year, but if Great Britain should want more bacon wre can supply it.

The general view in the West appears to be that a drastic and radical reduction of acreage while Canada is at war would completely disorganize the whole Canadian economy, which is so largely dependent on the Canadian wheat industry. An abundance, even a superabundance, of wheat may be embarrassing, but it has its good points during a world war.

Hush, wheat baby.

Don’t you cry;

You may be kneaded,