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Cereal grains economic impact study should create awareness

Ron Walter looks at the importance of grain crops for Canadians.
Trading Thoughts by Ron Walter

An economic impact study of cereal grains by Cereals Canada should open some eyes to the effect the sector has on Canada.

The study of four grains — wheat, barley, durum and oats — by independent consultant LMC International found the grains create 370,000 jobs in direct and indirect employment.

Another 28,000 jobs were unpaid farm labour, likely a low estimate as the study only included 1.1 other family members per farm as unpaid employees.

Direct jobs in the four grains from farm to processing to port amounted to 141,000 across Canada.

Revenue from the four and associated operations — trucking, elevation, food and feed processing, rail and port — averaged $68.8 billion in the three years from 2015-2016 crop year on.

The study averaged the three years to iron out the impact of price volatility and production volume.

LMC spokesperson David Jackson said the two most important factors in economic impact are prices and grain volume. Prices were high during the study period.

The oats sector, smallest of the four, is responsible for 13,000 farm jobs alone.

Jackson noted the jobs are full-time equivalent and “it might take three farms to make one job in oats.’’

Another 8,000 jobs involve oats handling and processing

Jackson said not all uses of oats or any grain were included in processing data. “We wanted the crop to be as close to 100 per cent of the ingredients as possible.”

Things like oats bars and such were not included.

Total impact of oats at $1.4 billion was divided with 85 per cent in Western Canada and the rest in the East.

Food processing of oats was responsible for 6,000 jobs.

Wheat and barley, the two biggest crops, accounted for most of the impact.

In the wheat sector, almost $9.5 billion wages were paid to 73,500 workers in farming. Flour processing made up most of the 215,000 jobs connected to wheat.

Total impact of wheat was $42.7 billion with $16.8 billion wages.

Barley created 107,000 jobs with 27,000 in farming. Brewing created 45,000 jobs with over 17,000 in feed milling.

Barley-connected impact was $14.35 billion.

Jackson noted the durum sector created less than its potential. Most of the crop is exported and processed elsewhere.

Still, durum created 32,600 jobs with 21,300 in farming and $1.87 billion in wages. Four thousand jobs were in processing.

Total impact of durum was $7.5 billion.

The Cereals Canada study reveals the impact of the four grains in Canada and might explain one reason why the Saskatchewan government spends so much effort on the grain sector.

The 370,000 paid jobs created by cereals compares with 347,000 in the beef cattle sector and 144,000 in the canola sector.

Ron Walter can be reached at           

The views and opinions expressed in this article are those of the author, and do not necessarily reflect the position of this publication. 


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