Wheat Prices Up Canada*

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December 5, 2002

Canada: Poor 2002 Crop Means Higher Cost

By THE ASSOCIATED PRESS

Filed at 3:59 p.m. ET

WINNIPEG, Manitoba (AP) -- A poor crop due to drought, disease and pestilence in the grain belt of western Canada will mean higher prices for consumers, the government statistics agency said Thursday.

``High wheat prices have already increased the price of flour for the domestic baking industry, which will be passed onto the consumer,'' Statistics Canada said in its final estimate of crop production in 2002. ``Other shortages in crops such as malting barley, milling oats and mustard will increase the costs of manufactured foods.''

Parts of Alberta and Saskatchewan, the main wheat-growing region, had their worst growing season in a quarter century.

``Weather, disease and pestilence reduced yields and downgraded quality for those producers who were fortunate to have a crop to harvest,'' Statistics Canada said of the two provinces.

Wheat and canola production, at 15.7 million and 3.6 million tons respectively, were down from last year's figures and well below what is considered an average year.

Livestock producers in western Canada had to buy large amounts of U.S. corn to feed their animals, with 2 million of the record 3.9 million tons imported in 2002 getting used in the West, according to Statistics Canada.

Farmers in eastern Canada had a normal growing season overall with enough rain and average yields, the agency said.

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