Glacier FarmMedia — In order to get Canadian farmers to plant at least the same amount of canola this spring as they did last spring, they are likely going to need a premium, said Jerry Klassen, analyst with Resilient Capital in Winnipeg.
Canola yields
Klassen said canola yields could go back to normal in 2026/27, slipping from the 2.51 tonnes per hectare they harvested in the fall. The two previous crop years, Canadian farmers gleaned about 2.20 t/ha., according to Agriculture and Agri-Food Canada.
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On Jan. 21, AAFC issued it January supply and demand estimates, projecting the 2026/27 canola yield at 2.17 t/ha.
Cost of production
Klassen looked at the cost of production and surmised farmers would need at least C$661 per tonne for new crop just to break even.
“Prices for new crop are below that right now. The market needs to move higher so that farmers maintain the acres from last year,” Klassen said.
AAFC estimated planted area for 2025/26 at 8.75 million hectares, compared to an average of nearly 8.30 million over the last two years.
As for the current situation, Klassen said farmers have been very reluctant to sell their canola because C$617/tonne is below the cost of production.
Farmers deliverling less canola
The Canadian Grain Commission reported producer deliveries of canola for the week ended Jan. 11 at 8.15 million tonnes, down from 9.25 million a year ago.
“You another need (C$44 per tonne) before the farmer opens his bins to give it to the commercials,” he said.
Canada-China deal
Meanwhile, canola was being pushed higher on continued optimism toward the Canada-China deal signed on Jan. 16, Klassen said.
The agreement is to drop China’s tariffs on imports of Canadian canola seed and meal from 100 to 15 per cent. In exchange, Canada will slash its surcharge on Chinese electric vehicles from 100 to 6.1 per cent. However, China’s levies on canola oil are to remain at 100 per cent.
Klassen said there’s the belief within the trade that China will import about two million tonnes of canola before the 2025/26 marketing year ends on July 31.
“Next year, they’ll probably take their usual amount of four million tonnes,” he added.
