Abstract:
Both feed grain prices and livestock production in Western Canada have been affected by regional, national and international government programs. This study analyzed export prices realized by the Canadian Wheat Board's (CWB) in the feed barley and wheat markets, how the elimination of the Western Grain Transportation Act (WGTA) subsidy and the United States Export Enhancement Program (EEP) affected domestic feed prices pre and post 1995. The study also looked at what the subsidy impact has been on historical ration costs and how the price relationship between Canada and the Mid-Western United States has changed after subsidies were discontinued and/or suspended. Results of this study show that the CWB had limited powers of price discrimination and they simply matched US prices to EEP and non-EEP eligible markets. EEP lowered the total returns to CWB pool accounts and prices paid for feed grain exports. The net impact on Prairie feed grain prices of the various subsidy programs that were in place in Canada and the US was found to be highly variable, but overall, they tended to lower the cost for feed grain users in Western Canada between the mid 1980's to mid 1990's. Hog ration costs in Manitoba were found to be nearly identical to ration costs in Iowa. Following the termination of the WGTA, it was strongly believed that domestic feed prices would fall and that Western Canada would have a comparative advantage in livestock production relative to the Mid-Western US. The period of analysis, post 1995 has been marked with significant price volatility, increased weanling hog exports (<50kg) and a shift away from traditional feed grain production. The feed cost advantage that was believed to be realized in the Canadian Prairies following the elimination of the subsidy under the WGTA was not supported by the analysis.
