Bi-weekly Bulletin, Agriculture and Agri-Food Canada

 

 

 

 

[OCPA Home Page]

November 8, 1996 Vol.9 No.21

Central and Eastern Canada:

Regional Production and Consumption of Corn

Livestock and feed grains are key components of the agricultural sector in Central and Eastern Canada (CEC). In 1995-96, corn accounted for about 12 per cent or 7.1 million tonnes (Mt) of total grains and oilseeds production in Canada. More than 98 per cent of this was produced in Quebec, Ontario and Nova Scotia. Corn is the most important feed grain in CEC, accounting for about half of total feed grain consumption in 1995-96. Grain corn production is limited to regions with sufficient heat units and moisture, and is best suited to south-western Ontario and southern Quebec. In comparison, livestock production is more evenly distributed throughout CEC, resulting in domestic feed corn flows. This issue of the Bi-weekly Bulletin examines the flows of feed corn from surplus to deficit regions in CEC.


Production

Corn has had a long history of cultivation in Central Canada. Evidence suggests that cultivation existed in Ontario ten centuries ago. Before the first hybridized corn was developed in the 1920s, corn was grown mainly for on-farm feed use. In the mid 1950s, with the introduction of higher yielding corn hybrids, commercial production expand rapidly. However, because the hybrids were US varieties requiring higher heat units and a longer growing season, Canadian production was limited to the southern-most regions of Ontario. As hybrids began to be developed for cooler/shorter growing seasons, commercial corn production spread beyond southern Ontario. Today, grain corn is widely cultivated in Ontario and Quebec, with limited production in Nova Scotia, Manitoba and Alberta.

Fodder corn, used mainly for silage, is also a major crop but requires less heat units and has a wider range of potential growing regions. However, because fodder corn is difficult and costly to transport, it is grown primarily for on-farm use. Fodder corn is generally treated as a separate crop from grain corn.

Four types of grain corn are grown in CEC. Sweet corn, which has a limited ability to convert sugars to starch, is more palatable for direct human consumption and accounts for about three per cent of seeded corn acreage. Popcorn, which owes its popping ability to harder endosperm than other types, is a specialty crop with less than half of one per cent of seeded acreage. Waxy corn has starches with specific properties desirable to wet millers, and accounts for about two per cent of seeded acreage. Dent corn is the most common type of corn in CEC, dominating feed, human food and industrial markets. Dent corn accounts for about 95 per cent of the area seeded to corn.

Corn is an extremely efficient plant which is able to trap the sun’s energy during the day for conversion during the night. As a result, corn yields in CEC average about 110-115 bu/acre, with hotter regions yielding over 145 bu/acre (comparable to some US corn-producing states), and cooler regions yielding 85-90 bu/acre.

CEC produced 7.1 Mt of corn in 1995-96, or about 30 per cent of Canada’s total coarse grain production. In comparison, total grains and oilseeds production in Canada was 59 Mt in 1995-96.

Ontario grows about 70 per cent of total corn production in the CEC. In 1995-96, Ontario produced 5.1 Mt of grain corn. The bulk of production occurs in the south and south-western regions, which produced about 80 per cent of production in 1995-96. Central and eastern regions produced most of the remainder.

In Quebec, corn production is concentrated primarily in the southern-most regions flanking the St. Lawrence river. The regions to the south and east of Montreal produce about three-quarters of total production. In 1995-96, Quebec produced 2.0 Mt of grain corn, about 28 per cent of total CEC production. Quebec’s five-year average yield is 96 bu/acre, compared to 119 bu/acre in the US and 111 bu/acre in southern Ontario.

Nova Scotia produced 13,200 tonnes of corn in 1995-96 or about 0.2 per cent of total CEC production. Corn accounts for only about two per cent of total seeded area in Nova Scotia.

Prince Edward Island and New Brunswick have limited corn production, each growing less than 1,000 tonnes annually.


Disposition

Feed Use

1995 Feed Corn Consumption

 

Ontario

Quebec

Nova Scotia

New Brunswick

PEI

Newfoundland

Total Central & Eastern Canada

 

000 tonnes (per cent of total)

Beef Cattle

496.0

(15)

116.8

(5)

0.0

(0)

0.0

(0)

0.0

(0)

0.1

(0)

612.9

(11)

Dairy Cattle

755.2

(22)

654.7

(30)

20.4

(24)

15.7

(22)

1.7

(12)

3.8

(14)

1,451.5

(25)

Sheep and Lambs

7.4

(0)

0.8

(0)

0.2

(0)

0.0

(0)

0.0

(0)

0.0

(0)

8.4

(0)

Hogs

1,372.8

(41)

1,018.8

(46)

11.1

(13)

21.3

(30)

7.0

(51)

1.0

(4)

2,432.0

(42)

Layers

187.8

(6)

74.0

(3)

14.5

(17)

8.5

(12)

1.8

(13)

6.0

(21)

292.6

(5)

Chickens

406.3

(12)

296.1

(13)

34.3

(40)

22.4

(31)

3.2

(24)

17.3

(61)

779.6

(13)

Turkeys

149.1

(4)

51.3

(2)

5.0

(6)

3.2

(5)

0.0

(0)

0.0

(0)

208.6

(4)

Horses

12.5

(0)

15.7

(1)

0.0

(0)

0.0

(0)

0.0

(0)

0.0

(0)

28.2

(0)

Total

3,387.1

(100)

2,228.2

(100)

85.5

(100)

71.1

(100)

13.7

(100)

28.2

(100)

5,813.8

(100)

Source: Statistics Canada, Agriculture and Agri-Food Canada estimates      

Corn is the dominant feed grain in CEC, accounting for about half of all feed grains consumed. Corn has traditionally been used mainly for animal feed, due to its excellent feed characteristics. It contains the highest energy of all cereals with a poultry digestible metabolizable energy standard of 3,300 kcal/kg. Corn, however, is low in protein with 8.9 per cent standard crude protein content, as well as deficient in key amino acids. Animal feeds, therefore, require protein meals, fats, vitamins and other supplements to augment grain corn rations.

CEC corn consumption for livestock feed was estimated at 5.8 Mt in 1995-96. The hog sector is the largest consumer of feed corn in both CEC and Canada. The hog sector accounts for 42 per cent or 2.4 Mt of feed corn use in CEC. CEC hog production has expanded by about 9.0 per cent since 1991.

The dairy cattle sector is the second largest consumer of feed corn in CEC. In 1995-96, dairy cattle consumed 1.5 Mt or 25 per cent of total consumption in CEC. Corn accounts for about 44 per cent of total grains and oilseeds fed to dairy cattle in CEC.

The poultry sector is the third largest consumer of feed corn in CEC, and accounts for 1.2 Mt or 22 per cent of corn consumption in CEC. Poultry rations consist of about 70 per cent feed grains, the remainder being primarily protein meals. Corn is by far the dominant feed grain used in poultry rations, accounting for about two-thirds of total grains and oilseeds consumption by poultry in CEC. The beef cattle sector is also an important consumer of corn, accounting for 11 per cent of total consumption.

Ontario feed corn consumption in 1995-96 is estimated at 3.4 Mt or 58 per cent of total CEC production in 1995-96. The bulk is consumed in the southern and western regions, or Census Agricultural Regions (CARs) one and two, which account for about 75 per cent of the provincial total. The remainder is concentrated in CARs three and four, with only two per cent in northern Ontario (CAR five). Hogs are the largest consumers in Ontario, accounting for 1.4 Mt or 41 per cent of the total. Dairy cattle and poultry consume about equal amounts, accounting for 22 per cent or 0.7 Mt each. Beef cattle consume 0.5 Mt or 15 per cent of the total, although beef cattle numbers have decreased about 5.0 per cent since 1991.

Feed corn usage in Quebec is estimated at 2.2 Mt in 1995-96, about 38 per cent of the total in CEC. About half is consumed south of the St. Lawrence in CARs three to six. The bulk of consumption north of the St Lawrence is concentrated in CARs two and ten, the regions directly north of Montreal and surrounding Quebec City. Almost half of total corn consumption is accounted for by the hog sector, while dairy cattle consume 30 per cent or 0.65 Mt. Broiler chickens consume 0.3 Mt or 13 per cent. Beef cattle, layers and turkeys are comparatively less important consumers of corn, accounting for only a few per cent each.

The Maritime provinces account for 0.2 Mt or 3.0 per cent of feed corn usage in CEC. Nova Scotia and New Brunswick account for 0.15 Mt or more than three-quarters of the total, while Newfoundland and Prince Edward Island consume 0.03 and 0.01 Mt respectively. Broiler chickens are the largest consumers of feed corn in each of the Maritime provinces with the exception of Prince Edward Island, where hogs account for more than half of total feed corn consumption. Dairy cattle and hogs are the other main feed corn users in the Maritimes, while beef cattle, layers and turkeys together account for less than 20 per cent of the total corn consumption.


Processing Use

More than 95 per cent of total CEC corn processing activity occurs in Ontario, where processing accounted for about one-quarter of total corn usage in 1995-96. Corn processing in Ontario has increased by about 15 per cent over the last five years. The processing sector’s steady rate of growth is mirrored in the US, where about 15 per cent of production is used by the food, seed and industrial sector.

The bulk of processing activity in Ontario is dominated by a small number of firms. Two wet millers, Casco and Nacan, operate a total of four mills in the province. The wet milling process produces corn oil, gluten feed and gluten meal. Wet milling also produces starch, which may be further refined into syrups, dextrins, sugars or alcohols.

Dry milling is dominated by two mills owned by Kellogg and King Milling, and produces crude oil, germ cake, corn flour, corn meal and other products. Corn is also used by two distilleries owned by Hiram Walker and Canadian Mist. Seven of these eight processors are located in CARs one and two, the highest producing regions in Ontario. In 1995-96, Ontario corn processors used a total of 1.4 Mt of corn. Corn processing is limited in Quebec, with about 0.04 Mt used annually by United Distillers Company.


Corn Flows

Central and Eastern Canada: Production and Disposition of Corn

Census Agricultural Region (CAR)

1990-91 to 1994-95

Avg. Production

1995-96

Production

1996-97

Seed Use

1995-96

Food & Ind. Use

1995-96

Feed Use

1995-96

Surplus (Deficit)

   

\1

\2

 

\3

\4

Ontario  

000s tonnes

   

1

2,592.8

2,708.1

9.6

895.1

1,135.3

668.1

2

1,268.2

1,522.3

4.6

130.4

1,427.3

(40.0)

3

334.6

367.3

1.3

0.0

304.7

61.3

4

477.2

529.8

1.7

320.5

440.3

(232.7)

5

1.2

3.4

0.0

0.0

79.3

(75.9)

Total

4,674.0

5,130.9

17.2

1,346.0

3,386.9

380.8

 
Quebec            

1

n/a

1.6

0.0

-

86.1

(84.5)

2

n/a

1.6

0.0

-

362.0

(360.4)

3

n/a

1.6

0.0

-

280.9

(279.3)

4

217.7

222.5

0.8

-

271.1

(49.4)

5

70.9

63.7

0.2

-

255.9

(192.4)

6

651.2

694.9

2.4

 

370.8

321.7

7

615.2

724.7

2.5

50.0

130.1

542.1

8

20.9

23.2

0.1

 

55.7

(32.6)

9

n/a

19.4

0.1

-

29.7

(10.4)

10

161.9

179.1

0.6

-

239.7

(61.2)

11

61.4

66.1

0.2

-

85.9

(20.0)

12

n/a

1.6

0.0

-

60.2

(58.6)

Total

1,799.2

2,000.0

6.9

50.0

2,228.1

(285.0)

 
Nova Scotia

16.5

13.2

0.1

-

85.4

(72.3)

New Brunswick -

-

-

-

71.2

(71.2)

Prince Edward Island -

-

-

-

13.6

(13.6)

Newfoundland

-

-

-

-

28.2

(28.2)

GRAND TOTAL

6,489.7

7,144.1

24.2

1,396.0

5,813.4

(89.5)

\1 Statistics Canada production estimates.

\2 Based on 1995-96 Statistics Canada seeded area estimates.

\3 1995-96 corn feed use estimated using Statistics Canada feed consumption coefficients, livestock populations, and feed waste and dockage (FWD) estimates. FWD is estimated as a residual, and may overstate actual consumption.

\4 Net corn surplus equals production minus seed, feed and industrial uses.

- Trace amounts

The table on the next page identifies surplus and deficit corn producing areas in CEC by CAR. Each CAR’s surplus/deficit is defined as production minus seed, feed and processing use. The residual is the surplus available for export, or the deficit requiring imports.

Transport costs favour local feed usage of corn. In general, corn is exported from a given region to another destination (neighbouring regions, provinces or countries) only after its local requirements have been met. Exportable corn supplies are the residual of production minus seed, feed and industrial use.

CEC generally has little excess corn production. In 1995-96 feed, seed and industrial use of corn in CEC was estimated at 7.2 Mt, 0.1 Mt greater than production.

Ontario generally has little excess corn production, although it had a provincial surplus of 0.4 Mt in 1995-96 due to above-average production. In terms of shipments to and from the US, Ontario is generally considered a net importer of corn. However, when interprovincial shipments are included, Ontario is generally a net exporter of corn. In seven of the ten previous crop years, Ontario produced more corn than it consumed.

Ontario’s major surplus area is southern Ontario or CAR one, which had a 0.7 Mt corn surplus in 1995-96. Western and central Ontario, or CARs two and three, are considered roughly self-sufficient. Eastern Ontario or CAR four is a deficit region, consuming 0.2 Mt more than it produced in 1995-96. Northern Ontario, or CAR five, has a small but consistent deficit due to poor corn production conditions.

Ontario corn flows experience significant variations depending on production, markets and pricing differences with the US. However, most corn generally flows within the province from CAR one toward deficit regions in the north and east. CAR one also exports corn to the US and Quebec, primarily to New England and deficit regions near Quebec City. Limited shipments of corn flow to Michigan, the Maritimes and smaller deficit regions in Quebec.

Flows of corn to and from Ontario also vary by season. Although significant variation exists from year to year, Ontario’s exports are generally concentrated in the first few months after harvest, and the bulk of imports are shipped in from the US toward the end of the crop year. This is attributable primarily to price changes throughout the crop year, although storage capacity is also a factor. In addition, corn with characteristics desirable to millers is often in short supply toward the end of the crop year, causing some millers to source supplies from the US.

In 1995-96, Quebec consumed about 0.3 Mt more corn than it produced. Although ten of the twelve CARs are deficit regions, there are two distinct surplus and deficit regions. The main surplus area consists of CARs six and seven, roughly the area to the south and east of Montreal. The main deficit area consists of CARs two, three and five, roughly the area between Quebec City and the US border.

In Quebec, corn flows north and east to the main deficit regions. Although some corn flows to other deficit regions in the province, CARs two, three and five are the main consumption areas. Quebec also receives corn by vessel and rail from the US and Ontario. Although Quebec consumed more corn than it produced in 1995-96, corn imports of 0.35 Mt allowed Quebec to export 0.2 Mt of corn, primarily to the US and the Maritimes by rail and vessel.

The Maritime provinces are corn deficit regions. Although Nova Scotia produces a limited amount of corn, it is also a deficit region. In 1995-96, 0.19 Mt were imported by vessel. Nova Scotia and New Brunswick each had deficits of 0.07 Mt, followed by Newfoundland and Prince Edward Island with 0.03 and 0.01 Mt respectively. About 60 per cent of corn shipments to the Maritimes in 1995-96 were from Ontario, with the remainder from Quebec.


Outlook

Canadian harvested area of corn in 1996-97 is expected to increase 5.0 per cent over 1995-96 to 1.05 million hectares (Mha) because of low stocks and relatively strong prices. In 1997-98, increased area and yields is expected to increase production to a record eight Mt. Higher area is primarily attributed to the new US Farm Bill, which, in contrast to previous bills, does not encourage US corn production relative to other crops. This is expected to keep Canadian corn prices relatively strong.

Ontario corn flows to other regions are expected to decline because of an expected increase in food and industrial use. Two new ethanol plants, Commercial Alcohols in Chatham, Ontario and Seaway Valley in Cornwall, Ontario are expected to increase demand for corn by about 0.5 Mt beginning in 1997-98.

The disappearance of the Feed Freight Assistance (FFA) subsidy is likely to have a significant impact on corn flows to the Maritimes. The FFA, which subsidized imports of feed grains to eligible provinces, was terminated December 31, 1995. Regions that previously received subsidies are expected to face higher feed grain costs resulting in a number of effects.

First, changes are expected in flows of corn from Ontario and Quebec to the Maritimes and British Columbia. In 1995-96, Ontario accounted for two-thirds of the 0.2 Mt of corn shipped to the Maritimes. The disappearance of the FFA is expected to make shipping corn from Ontario relatively more expensive than shipments from Quebec. In addition, flows of feed corn from Ontario to British Columbia, which are estimated at 0.04 Mt in 1995-96, are expected to be sharply reduced, as increased transportation costs may make corn less attractive relative to prairie feed grains.

Second, the feed demand for locally grown corn in Ontario and Quebec may increase because of lower prairie feed grain usage in the Maritimes as a result of higher transportation costs. Consequently, total feed corn use in CEC is expected to rise, increasing imports in some deficit regions and decreasing corn exports to the US. However, the expansion in hog numbers may be limited by environmental concerns in heavily populated regions of Ontario and Quebec.

Third, corn flows to the Maritimes may be reduced in the long-run as higher corn prices reduce livestock production and encourage local feed grain production. This also includes some deficit regions in Ontario and Quebec. Livestock production may fall in the Maritimes due to higher feed costs. Supply managed commodities such as egg, poultry and dairy are an exception. In addition, beef and dairy cattle may experience little change where high quality forages are available as substitutes in rations. A gradual decline, however, is expected in hog production, where producers in the Maritimes may be in a less competitive position relative to producers in other parts of North America. In addition, feed corn prices and consumption will also be dependant on alternative western Canadian feed grain prices.

This article was written by Gordon Kurbis. Gordon was a former summer employee of Agriculture and Agri-Food Canada and is currently an employee of the Canadian Wheat Board.

For more information, contact: Duncan McKinnon, Coarse Grain Analyst - (204) 983-8467


[OCPA Home Page]