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Monday Morning Commentary

Rick Swenson

I am sure most of you have heard the reports coming in of an absolutely fantastic crop in most parts of Saskatchewan. This is really remarkable given the very late start that most areas of the province experienced because of last winter. Two crops in particular – canola and durum wheat – seem to be beyond everyone’s expectations. This is good news for Saskatchewan because agriculture, once again, may have to shoulder a bigger load in maintaining our economy given some of the recent economic news coming out.

All spring and summer there have been announcements coming out of the potash and fertilizer industries about indefinite cancellations of expansion projects. Mosaic put two potash expansions on hold. Potash Corp. has been dramatically cutting back production and is preparing to layoff hundreds of workers. Yara Fertilizer at Belle Plaine cancelled their expansion which would have doubled the size of the plant. Almost all of the other companies who were planning on green field projects have announced dramatic cutbacks in their plans to build.

The latest number on wholesale trade in Saskatchewan shows a 6.1% decline in the month of July which amounts to $128 million. Saskatchewan had the largest drop in wholesale trade anywhere in Canada and in fact other areas of Canada that had no economic growth are now showing large increases in wholesale trade and outpacing Saskatchewan. Saskatchewan’s numbers are the worst in western Canada.

The large crop coming off will see fairly dramatic price cuts in several of the commodities. The challenge will now be the logistics and transportation system being able to move this large crop in a cost-effective manner so that the increased bushels being produced will make up for the fairly dramatic drops in price. Saskatchewan agriculture today is competing with a lot of other products that demands space in the rail and road systems The dramatic increase in the movement of oil which has been well documented over the last few months will compete for engine power with canola, wheat, pulse crops, etc.

The fact that this Sask Party government during very good economic times was so eager to throw most of its economic eggs into the potash basket instead of developing infrastructure particularly in the transportation sector means that Saskatchewan may not be able to reverse some of the economic indicators which show our economy slowing and the price of most commodities softening with the exception of oil if it can be moved out of the province.

The unwillingness of the Sask Party government to enter into strategic partnerships and insist on leaving everything to so-called free enterprise system means that Saskatchewan is at the pleasure of the so-called free enterprise companies and that we are subject then to the boom and bust of those companies.

Wouldn’t it be nice to be able to process, package and market on both the wholesale and retail levels parts of this huge crop that we have grown this year? And wouldn’t it be nice to be collecting the taxes from the jobs that would accrue from that processing and the building that would take place in the communities that would be near those endeavours?

Instead – almost all of it will once again be loaded onto railcars, trucks and moved somewhere else. Let’s hope that the good times in this province don’t end with this crop because our politicians didn’t have the foresight to plan for the future in good economic times.

Your feedback is welcome on anything you see in the Monday Morning Commentary. Please send your comments to contact @pcsask.ca. If you know of anyone that would be interested in receiving this by email, please forward me their email address. Also – don’t forget to check out our website at pcsask.ca.

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