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The economic impact of Fusarium in Alberta

Aug. 4, 2015 - To illustrate the cost of Fusarium head blight to Alberta's producers, Alberta Agriculture and Forestry recently published a report on its research into the economic impact. The report outlined the potential costs at both a farm level and for the province as a whole.

"The report suggests that, while some economic losses occur due to yield reduction, grade loss is responsible for the greatest cost," says Ted Nibourg, farm business management specialist, Ag-Info Centre, Stettler.

"At the farm level, three degrees of severity were used to show the costs of Fusarium head blight. A low incidence was considered to be 0.4 per cent wheat kernels affected by Fusarium, a medium incidence was considered to be one per cent and a high outbreak was two per cent. A low outbreak reduces No. 1 hard red wheat to a No. 2, a medium level drops the grade to a No. 3 and the high incidence will reduce No. 1 wheat to feed. The report used a six year average price differential between grades to calculate farm loss levels."

The spread between No. 1 and No. 2 was $35 per tonne ranging up to $63 per tonne for the No. 1 – feed wheat spread. "Assuming a 50 bushel per acre crop meant that grade losses for a low outbreak amounted to $48/acre, $65/acre for a medium outbreak and $87/acre for wheat downgraded to feed. Those costs can almost eliminate the contribution margin for hard red wheat in the brown and dark brown soil zones."

Fusarium first reared its ugly head in Alberta during the 1990s, says Nibourg.

"It's now common in southern Alberta and there is evidence it's showing up in new areas of central and northern Alberta as well. On a provincial level the economic loss due to Fusarium can be substantial. Data on Fusarium incidence and severity collected by the Canadian Grain Commission's Harvest Sample Program for the years 2003 to 2012 in the province was used in the report. Weather related factors were assumed to be constant for the purpose of the report. A generalized grade distribution for Canadian Western Red Spring Wheat was applied for all years of the assessment."

For the first few years of the sample program, relatively little Fusarium was reported. "However, in 2009 it's estimated that about 150,000 tonnes of wheat in Alberta were downgraded from No. 1 and No. 2 down to No. 3 and feed, resulting in economic losses of about $3.6 million."

In 2010, the amount of wheat that was estimated to be downgraded rose somewhat to about 230,000 tonnes, but the economic losses were estimated to jump to $8.7 million due to higher wheat prices.

In 2012, the final year of the Fusarium assessment, damages rose to over 400,000 tonnes of wheat subject to downgrading. "However, the economic losses were smaller because it is estimated that severity levels were lower resulting in No. 1 wheat being downgraded to a No. 2 instead of No. 3 or feed. The total cost of Fusarium in 2012 was estimated at $2.9 million."

August 5, 2015  By Alberta Agriculture and Forestry