There is a wide range in quality over the limited amount of crop that’s been harvested. Within the lentil crop, a lot of disease and sprouting is evident, although there has also been some good quality harvested. With the weather this week, you have to think the quality of many crops is going to take a further hit. This is especially true on the eastern Prairies where there has been a lot of rain in the past couple of weeks and more rain is forecast. In addition to bleaching, sprouting and disease, the rain and cool weather is further delaying maturity. When the clouds finally clear, frost might not be far behind. It’s that time of year. The days are getting shorter and we can’t seem to get a sustained period of warm, dry weather. It’s been a difficult growing season and so far the same pattern is holding for harvest. We really need a repeat of last year’s abnormally hot and dry September. Otherwise the Saskatchewan crop is going to have below average quality as well as below normal quantity. I’m Kevin Hursh.
Livestock prices are a lot better than a year ago. The Saskatchewan Ministry of Agriculture publishes a Market Trends report that lists current grain and livestock prices versus the price one year earlier. A1 steers in Saskatchewan are currently listed at 90 cents a pound. A year ago, the price was 82 cents. D1 / D2 cows are a lot better at around 59 cents as compared to only 39 cents last year. With the fall calf run approaching, a lot of cow-calf producers will be following the price of feeder calves. The report lists the current price of 500 to 600 pound steer calves at $1.20 a pound, versus $1.09 last year. That’s roughly another $60 per calf. While that’s helpful, prices will have to increase further to provide a decent return. Many livestock analysts and observers believe cattle prices will indeed continue to strengthen. Look at the big turnaround in the hog industry. A year ago, Index 100 market hogs in Saskatchewan were around $95 per hundred kilograms. Now prices are in the $150 to $160 range. That’s the kind of increase cow-calf producers would like to see. I’m Kevin Hursh.
A rising tide is supposed to raise all the ships, but some grain prices have increased a lot more than others. Wheat, durum and barley price expectations took a major jump yesterday in the CWB’s newest Pool Return Outlook. Top quality spring wheat is up by nearly $1.50 a bushel. The price expectation for No. 1 CWRS with 13.5 per cent protein is now an average of nearly $6 a bushel net Saskatchewan. The PRO on top quality durum saw an increase of just over a dollar a bushel. No. 1 durum with 13 per cent protein now has a PRO of just over $5 a bushel. Malting barley is up by a dollar a bushel and now sits at $4.13 net Saskatchewan. Cereal prices still pale in comparison to canola, which has been around $10 a bushel and flax which is quoted at around $13. Price quotes approaching 30 cents a pound are now being seen for top quality large green lentils. Crops that you’d have to rate as disappointing include peas, mustard and canaryseed. Yellow pea prices remain under $5.50 a bushel, yellow mustard is only about 24 cents a pound and canaryseed is struggling to hit 20 cents. While some crop prices are in the upper range of historical bids, others are certainly not. I’m Kevin Hursh.
I spent some time yesterday north of Humboldt looking at the greatly expanded lakes, washed out roads and rushing culverts. Thousands of acres of crop land and pasture have been lost to flooding. Some forty year old houses have water problems in their basements for the first time ever. Rural municipalities are fighting with the federal Department of Fisheries over the unwanted water that’s flooding farm fields. Coincidentally, I received an email yesterday from a producer in the Humboldt area who says there are many local situations where more than 30 inches of rain has fallen this spring and summer. He says producers are already preparing to tow out combines which are likely to get mired in mud once the harvest begins. Grain carts are expensive, but in high demand because trucks will have difficulty navigating the soft fields. And everyone is looking ahead to the disaster that could be coming next spring. Given even a normal amount of snow over the winter, where is all the water going to go when the soil is already saturated? I’m Kevin Hursh.
With the growing season drawing to a close, the accumulated precipitation maps tell an amazing tale. Since April 1, there has been a record high amount of precipitation over about 40 per cent of the Saskatchewan grain belt. This record spills over into the east central region of Alberta and some northern parts of the Manitoba grain belt, but the majority of the record high area is in Saskatchewan. According to the maps published by Agriculture and Agri-Food Canada, the entire Saskatchewan grain belt has had above normal growing season precip. In the Prairies as a whole, the only area below normal is the Peace River region of Alberta. In fact, most of the Prairies have exceeded normal growing season precipitation by more than 120 mm, which is nearly five inches. The rainfall totals are incredible. Most parts of Saskatchewan and Manitoba have received over 400 mm. That’s over 16 inches. Many areas are over 18 inches and some are over 20. The traditionally dry regions are happy about the recharge of ground and surface water. Areas that often suffer from too much rain are wondering when their sloughs and lakes will ever recede. To view precipitation maps, just Google “Drought Watch” and go to the current maps of the Prairie region. I’m Kevin Hursh.
There are major developments in the feed barley market. Drought in Russia and Ukraine and restricted exports from those major feed barley suppliers has meant a significant increase in offshore prices. Suddenly, the export market can compete with what Canadian producers are receiving for feed barley in the domestic market. Our domestic livestock industry is going to have to pay more or else substitute barley with corn or Distillers Dried Grains from the U.S. The Canadian Wheat Board says it has sold over 200,000 tonnes of export feed barley in recent weeks. Producers can enter into three way Guaranteed Delivery Contracts involving the CWB and a grain company. The CWB has a guaranteed in-store price and a delivery period. Producers negotiate the freight and handling with the grain company. The CWB says the most recent contracts have had a guaranteed price of $215 a tonne basis Vancouver. By my arithmetic, that should equate to prices of well over $3 a bushel in Saskatchewan. The CWB says contract prices have been continually increasing as new tenders are awarded. Producers can call the CWB to find out more or call elevator companies to see if they’re participating in any tenders. I’m Kevin Hursh.
The long-anticipated Statistics Canada report on field crop production that came out on Friday has a lot of questionable numbers. As expected, there’s a big increase in Saskatchewan’s summerfallow acres due to all the land too wet to seed. Stat Can pegs summerfallow at 9.67 million acres, an increase of 5.5 million acres from last year. However, the provincial government has estimated 8 million acres were too wet to seed. On top of that, millions of acres that were seeded have been flooded out. When you compare the Stat Can estimates of seeded acres versus harvested acres, it’s tough to see where all this flooded land has gone. I also think some of the yield estimates are out to lunch. For instance, the Saskatchewan lentil yield is estimated at 1400 pounds an acre. Looking back at data all the way to 1998, that’s the highest lentil yield in all those years. I have a tough time buying that. While big yields are estimated on lentils as well as mustard and canaryseed, yield estimates are down substantially from last year in oats, barley, canola and wheat. After surveying 4,800 Saskatchewan farmers, Stat Can should have accurate production estimates, but I’m not convinced. I’m Kevin Hursh.
Reopening the Mexican market for Canadian canaryseed is taking a lot longer than most observers expected. The problem is Mexico’s list of quarantine weed seeds which includes wild buckwheat and stinkweed. Canada and Mexico have been unable to come to terms on how to minimize these weed seeds in canaryseed shipments. Mexico is our largest customer for canaryseed and shipments have been disrupted since late June. The Board of the Canadian Special Crops Association has now declared Force Majeure on canaryseed exports destined for Mexico. This trade rule clause basically says that unusual events have precluded the execution of contracts. The Canadian Special Crops Association says it has worked with the Canadian Food Inspection Agency, canaryseed exporters, Mexican importers and the Canadian government in an attempt to resolve the issue. The backlog of canaryseed shipments at the border has been addressed, but it’s not clear how future shipments will be handled. Most market analysts believe canaryseed prices will strengthen when exports to Mexico resume. Unfortunately, a deal to bring about the resumption of trade remains elusive. I’m Kevin Hursh.
Tomorrow, August 20, is going to be a big day for Canadian grain markets. Statistics Canada will be coming out with its estimate of field crop production for each of the grains, oilseeds and specialty crops. This is a bigger deal than usual because there’s so much uncertainty over how much was actually seeded this spring and how much of what was seeded has been flooded out. Stat Can’s estimate of crop area came out on June 23, but it was based on a survey conducted weeks earlier. Producers were unable to seed all the acres they had intended, so the estimates bore little resemblance to reality. On top of that, continuous rains flooded a lot of seeded land and some crops were hit harder than others. On many crops, Western Canadian production has a big impact on prices. Tomorrow’s Stat Can report could be a market mover in canola, oats, flax, lentils, mustard and canaryseed. The price moves could be positive or negative depending upon how the Stat Can numbers vary from trade estimates. With so much uncertainty on seeded acreage, market surprises are much more likely than usual. I’m Kevin Hursh.
The Grain Growers of Canada is making some great suggestions for what should be in the next federal budget. Invest in public research say the Grain Growers. They point out that real government dollars for basic agronomic research have fallen dramatically since 1994. Agriculture and Agri-Food Canada has far fewer plant scientists and breeders than it once did. The Grain Growers of Canada is also advocating a certified seed tax incentive. The idea is to encourage the use of more certified seed, especially on cereal crops, so that private industry has a greater encouragement to investment in cereal breeding. Another recommendation is to adjust capital cost allowance to spur certain investments by farmers in three categories – on farm fertilizer storage, farm machinery upgrades for precision applications, and improved on-farm grain storage that helps preserve crop quality. The final recommendation is to increase the lifetime capital gains exemption on the sale of farm assets from the current $750,000 to a million dollars. The Grain Growers of Canada argues that enabling retiring farmers to retain more of their life savings helps them pass on their farm to the next generation at a lower price and that would increase the rate of success for many young farmers. You can find the six-page submission on the Grain Growers of Canada website (www.ggc-pgc.ca). I’m Kevin Hursh.