Are specialty crops poised to surge in Western Canada?

For a few years specialty crops were a tough sell to Prairie farmers. Now with lower grain prices, there’s a renaissance in interest

High grain prices send a very clear signal. Basically, it amounts to “get in while the getting’s good.” Nobody knows how long those high prices will last, and everyone is loathe to leave dollars on the table.

In the field, it means a lot of inputs and crop protection products get applied where they might not be in a year of tighter margins. Rotations also get squeezed just a bit tighter to take advantage of favourable market conditions. And rotations get simpler too, in favour of efficiency and productivity.

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So it’s no surprise that in the last five years, we’ve seen more canola and wheat, and fewer special crops, including big-acreage crops like some of the pulses.

Take the case of field peas in Saskatchewan. In 2008 (the year grain prices really began to spike) that crop saw over three million acres seeded. By 2011, it had sunk to 1.7 million. Other crops show similar patterns, though, of course, they vary a bit in the details.

But that was then. Now, wheat and canola prices have fallen and, suddenly, interest in special crops has rebounded as farmers start to do some hard penciling to find profitability.

This past season saw field peas in Saskatchewan leap in popularity, with an estimated 2.6 million acres going in the ground, a 21 per cent increase over the year before, according to StatsCan. Those same estimates showed the trend continuing to the west in Alberta, where the crop was covering just over 1.2 million acres for a 25 per cent increase over a year earlier. Likewise Saskatchewan, the biggest lentil producer by far, saw an estimated 2.8 million acres of that crop sown, a jump of 21 per cent.

Clarence Shwaluk knows this first-hand. This winter his phone has been ringing a lot, and at the other end are farmers interested in learning about opportunities to grow one of the region’s newest specialty crops, industrial hemp. The calls themselves are nothing new, says the director of farm operations for processor Manitoba Harvest. They’re typical of the time of year when growers ponder their seeding options. What’s a bit atypical for a processor like Manitoba Harvest, which has a solid grower base that’s remained largely stable over several years, is who’s on the other end of the line.

“The phone has definitely been ringing a bit more, as it does every year at this time, but I am getting more cold calls from producers wondering if they can get into hemp production,” Shwaluk says. “I really think we’re going to be seeing more interest in some of these more minor crops.”

In the end, Shwaluk says, it’s economics driving that interest. At the same time, Manitoba Harvest specifically and the hemp industry generally are beginning to enjoy the first benefits of critical mass. The company and others have clearly established an end-use market for the product, and in Manitoba Harvest’s case, they have also built a brand with growing popularity, providing growers with a stable outlet, something that’s not always possible with small-acreage emerging crops.

Meantime, growers have also done their job, tackling many of the most thorny production questions for the crop, serving to both increase production and make it more stable. In fact, it’s this success that Shwaluk says may limit opportunities for new entrants for a season or two. Plainly put, the company doesn’t want to oversupply the still-developing marketplace, and there’s a clear trend towards higher yields as growers really figure the crop out.

“I think at least part of any growth in demand will be met from increased production through higher yields from established growers,” Shwaluk says. However, he’s quick to add he expects this to be a short-term blip in what he sees as a longer trend towards higher hemp acreage and more growers in the coming years.

Another observer says this heightened interest in special or new crops is definitely happening. Scott Chalmers, an agriculture diversification specialist with the province of Manitoba, says he’s seeing growing interest in all sorts of new and emerging crops — including some like corn and soy that are, of course, only minor crops in the Western Canadian context.

“There seem to be emerging crops that are competing with spring wheat and canola,” Chalmers says. “It has to do with wheat and canola prices in this area, with a bit tougher times.”

In particular, the emerging dynamic appears to see soy replacing canola, especially in areas that are prone to wetter conditions and flooding. Soybeans tolerate wetter conditions and bounce back more readily from them.

Add that to their lower production costs, mainly because the crop fixes its own nitrogen, and you have a potent combination that growers have a hard time ignoring, Chalmers says. There’s also the benefit of a break in the disease cycle for some common crop ailments.

“It increases the rotation options and the length of time between canola and wheat crops, which helps with disease pressure for things like fusarium in spring wheat and blackleg in canola,” Chalmers says. He also notes that while clubroot isn’t a major concern yet, growers are well aware of the threat and view soybeans as a potential alternative crop that would help prevent the problem, or cushion the blow if it does crop up.

Chalmers says corn is also another crop that many cereal farms are eyeing with interest as it begins to creep out of the Red River Valley, where growers have a long history producing it.

How big could this production get? Nobody’s sure, but one champion of these crops says they could become a big deal on the Prairies. Monsanto Canada is predicting between eight and 10 million acres of corn, and six to eight million acres of soybeans in Western Canada by 2024. With Manitoba soybean acres sitting at 1.3 million in 2013, however, that’s going to be a tremendous growth curve.

Chalmers also cites hemp as another crop with elevated grower interest, noting that conventional contracts provided the potential for profitability and organic contracts looked particularly tempting, given lower prices for other crops.

“Organic production contracts are ranging around $1.50 a pound,” Chalmers says.

With the best organic growers reliably getting 600 to 800 pounds of seed an acre, those numbers have drawn considerable interest, he says.

Other crops being eyed for acreage expansion include flax, which saw nearly 1.5 million acres sown in Saskatchewan in last year’s StatsCan estimates. (Final figures will be released later this winter.) Despite that increase in acres, prices stayed solid at around the $11 mark.

Yellow and oriental mustard are getting some interest because prices have held up, but oversupply has pressured brown mustard prices downward.

Both Shwaluk and Chalmers say that for growers, it’s going to boil down to a combination of biology and economics, as anyone who’s been paying attention to the industry probably already knows. Growers select crops over time that can do two things for them: thrive under local growing conditions, and reliably return a few dollars to the operation.

The tough times in the ’80s and ’90s generated game-changing new industries like canola and lentils, with more and more farmers noting the success of early pioneers of these crops.

Are we starting another cycle?

This article was originally published as, “That special feeling” in the Feb/ 17, 2015 issue of Country Guide

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