By Tim Kalinowski, Staff Writer
With the fall harvest nearing completion in many areas, provincial crop market analyst Neil Blue says it has been fascinating to see how the year played out for Alberta producers. The biggest surprise to Blue was the weather. Drought had been predicted by many coming out of a very dry winter.
“Many areas, with some exceptions, never really dried out this year after the rains started in later May,” states Blue. “One of things producers were generally able to do this year is have a fairly early start because of the fairly dry spring. That enabled producers to have more flexibility in their seeding time. Peas, for example, don’t like wet feet. But they were able to get quite a good start before the rains became more prominent. So the pea crops turned out quite well, and most other crops, in general, are going to be yielding above the five year average.”
There have been, however, a few negatives about the wet summer and fall, says Blue.
“One of the exceptions that didn’t do that well under moist conditions was lentils. Lentils do not like being wet; they favour dryer conditions. So the lentil crop yield may be lower than average. But that’s the only exception that comes to mind.
“The moist conditions also resulted in quite a bit of disease pressure. As opposed to last year where it was a very dry start… There is quite a bit of disease in the crops this year, I think. The other thing that is coming in on the harvest reports is some quality downgrading because of the rains we’ve had going into, and during, harvest so far.”
That downgrading could become a huge factor for some producers, admits Blue.
“The feed grain side may have trouble recovering from price pressure it has experienced over the summertime, and that could well drag into the spring and throughout this crop year. That will tend to mean price negative for crops like feed barley and feed wheat. There is going to be lots of feed around, it looks like.”
Blue says forward contracting could be the key difference maker this year when all is said and done.
“It certainly has been so far a year to have forward priced,” confirms Blue. “The prices that were available in the spring that were available for forward contracting in the fall, were very good back in the spring, particularly for yellow peas and lentils, so the farmers that took advantage of those contracting opportunities are doing very well because some of the pea yields have been extraordinarily high. That’s going to benefit those farmers who forward priced.”
Despite these disease pressures and pricing concerns over big yields, Blue expects most farmers to have a decent year.
“We are going to have a pretty good demand on export crops as far as getting those markets going, and being able to then try to prepare for the second half of the marketing year,” he says.
Blue notes grain is moving well with no capacity problems in the system like there was in 2013. And already ships carrying peas and lentils to international customers are leaving Canadian ports on a regular basis. Strong demand may mean better prices in 2017 on some commodities. Canola may be one of the biggest beneficiaries of this increased demand, despite current uncertainty over China, says Blue.
“The prospects for canola are still quite strong, and the fundamentals for the industry are still quite strong in terms of likelihood of good exports and strong crushing industry here with fairly strong crush margins that are higher than last year at this time. That bodes well for the canola demand side… Depending on the eventual outcome of yield on canola, I think we’ll have a bit of a bright spot there on the canola market.”