High agricultural commodity prices are a net positive for the Canadian economy.

That reminder is coming the Canadian Wheat Board.

"We're a major exporter of agricultural commodities. We have a lot of people that earn their income from the industry and it's good for them when prices are high," says CWB spokesperson Maureen Fitzhenry.

"We have to avoid this situation where somehow farmers seem to become the bad guys when prices are high. People think farmers are all making money while they're starving or paying through the nose. That is just absolutely untrue and the wrong way to think about it," she says. "The raw commodity price is actually not even the biggest part of the food price equation in North America. You can argue that high oil prices have more influence on the price of food then the actual commodity input does."

Processing, packaging, preservative processes all add to the price of food.

"When you look at a loaf of bread, it's mostly wheat. A loaf sells for two or three bucks. There's about 15 cents worth of wheat in that loaf," she points out.

As an example, Fitzhenry says the price at which the CWB is selling wheat to domestic millers has increased from approximately $6.50 per bushel to $11 a bushel over the last year. Each bushel makes approximately 67 standard-sized (16 ounce) loaves. That means the value of the wheat in each loaf has increased from roughly 10 cents to 16 cents.

"This is a core issue for the world, how do we keep growing enough food to feed the world. We have to remember that you don't do that by depressing prices. You do that by encouraging production and making it worthwhile to keep producing food and to produce as much as you can," she says.

~ Monday, March 7, 2011 ~