(Resource News International) — A battle for acreage next spring is expected to
begin heating up soon as producers in Western Canada begin to
plan ahead for next year’s crops.
High prices for various grains and oilseeds will make
things interesting as producers will be attracted to the crops
that have strong return potential, said Kevin Hursh, with Hursh
Consulting and Communications, a farmer advisory service
in Saskatoon.
“Often at this time of year an individual can pick winners
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there are a lot of contenders for acreage next spring,” Hursh
said.
However, he also pointed out it was important to
remember it’s still early and planting decisions
in Western Canada could still change dramatically ahead of the
spring.
Price, weather conditions, seed availability, fertilizer
needs, crop rotation requirements, et cetera were all seen as factors
that could impact next spring’s seeding decisions.
There were areas in Western Canada which were reportedly
going into the winter with some very low soil moisture levels,
Hursh said.
Canola
Of the crops that are expected to attract attention, canola
remains on top of the list, Hursh said.
“If you look at the fact that producers in Western Canada
can lock in new-crop canola values of $10 a bushel and
better, there will certainly be a pull towards planting a lot of
canola again next spring,” Hursh predicted.
Spring wheat prices in comparison are currently in the
$6-$6.50 per bushel range, which should result in some
spring wheat area being lost to canola, he said.
“The all-wheat acreage base is likely to go up next spring,
but that will come as producers turn to durum and the lofty price
expectations for the crop,” said Glenn Lennox, a wheat analyst with
the market analysis branch of Agriculture and Agri-Food Canada (AAFC) in Winnipeg.
With so much competition, Lennox said, the area seeded
very much. Producers in Canada seeded 15.215 million acres to
spring wheat in 2007.
“We could see some area taken from summerfallow and possibly
some from oats and seeded to spring wheat, but ultimately spring
wheat area will lose out to durum,” Lennox predicted.
Lennox was uncertain as to how high Canada’s durum acreage
base would climb in the spring of 2008, but it’s definitely
going to be higher than the 4.815 million acres seeded in 2007.
Hursh agreed durum area will be up in Canada, especially
as durum returns are in the $11 per bushel range,
representing a $5/bu. premium over spring wheat.
“But the thing with durum is how many producers in Canada
and in other countries are also giving serious thought to
huge jump, then this premium could be eliminated extremely fast.”
Capped
Chris Beckman, an oilseed analyst also with AAFC in Winnipeg, said the area seeded
to oilseeds in the spring of 2008 will be up from the 2007 level,
but the increase will be capped by the strong values for
competing crops.
Beckman projected canola area in Canada could rise as
much as five per cent from the 2007 level of 14.726 million acres.
“Canola values are attractive, but so were the prices for
winter wheat and durum,” he said.
Some of the area to be seeded to canola was expected
to come from summerfallow, but also from pasture being taken
“In conversations with cattle producers in Western Canada
there is a contingent that is extremely unhappy with where cattle
prices have been sitting and are projected to go, and they have
in turn decided to concentrate on the grain side of the
business,” he said. “That move includes ploughing up pasture
land.”
Meanwhile, Ken Ball, a broker with Union Securities Ltd. in Winnipeg, felt the canola acreage base may actually decline
next spring.
“Canola area will come down as producers have pushed crop
rotation as far as they can,” Ball said. “By pushing the crop
rotation issue producers have started to run into increased
canola disease problems and the only solution to eliminating the
disease threat is to not grow the crop.”
Ball also felt canola area will fall as fertilizer
“We are already hearing from producers that suppliers are
forecasting fertilizer shortages next spring,” Ball said, noting canola is a high-input crop.
Flaxseed area in Western Canada was also seen climbing from
the 2007 level, also because of current strong returns for
producers as well as continued strong price outlooks.
Beckman projected flaxseed area in Canada in the spring
of 2008 could be 30 to 40 per cent higher than the 1.305 million acres
seeded in 2007.
The large increase in seeded area to flaxseed was expected
to come at the expense of oats and coarse grains, Beckman said.
“When you compare the price for flaxseed on a year-over-year
basis, the commodity has seen some of the largest price
advances,” Beckman said. “That will certainly be on the minds of
Flaxseed was also not seen as large a user of fertilizer as
canola is, which will only help to entice producers to give the
crop some strong consideration.
Another crop expected to garner a lot of
consideration will be peas, particularly yellows, Hursh said.
The current price for yellow peas has climbed into
the $8.50-$9 per bushel range, which was seen as
“absolutely astounding,” he said.
New-crop contracts for yellow peas were said to be already
over $7 a bushel, which will entice producers in Western
Canada to plant the crop.
Dry pea seeded area in Canada totalled 3.630 million acres
in the spring of 2007.
Peas also put nitrogen back into the ground,
which will be another big selling point for producers who are
costs, Hursh noted.
Another factor working in favour of peas is the fact that
the crop has slowly moved into southern regions of
Saskatchewan, Hursh said.
“It used to be that 15 or 20 years ago, peas would only be a
crop grown in central and northern areas of Saskatchewan, but now
if you look at the map, the highest acreage to peas in the
province has been just north and south of Swift Current,” Hursh
said.
Producers in the southern regions of Saskatchewan were said
to be very comfortable including peas in their crop rotation
plans, he said.
The area seeded to oats in Canada was expected to decline,
as values for the crop have been lagging other alternatives,
Hursh said.
Oats area in Canada in the spring of 2007 totalled 5.408
million acres.
Ball agreed oats acres in 2008 will decline as
prices just have not been holding up as well as the other crops.
“Adequate”
Barley area in Canada, meanwhile, was forecast by Ball to
rise from the 10.865 million acres seen in 2007.
“Values for the crop have been adequate enough to allow
producers to give it some serious consideration,” Ball said.
Barley area in Canada could also get a boost if the Canadian
government is successful in removing the Canadian Wheat Board as
the sole marketer of the crop, Ball said.
