Drought more serious to canola growers than China

By Tim Kalinowski

While the premium Chinese market remains closed to Canadian canola, Kevin Serfas, vice-chair of Alberta Canola, says there are still decent marketing opportunities out there for those who are looking for them.

“There are some pricing opportunities that have come up north of $10 (a bushel),” he says, “and when that stuff does come around I would suggest guys sell at those levels because we don’t how long this is going to go on. It’s not $11, but it is still better than $9. There are opportunities, for sure.”

He is also encouraged by a strong domestic crush market so far in 2019.

“Anytime you can crush it locally, that’s always a better deal,” he states. “Lots of guys are telling me they priced out other potential crops to grow, but even at a reduced price canola is still the best option; so that’s what guys stuck with.”

Serfas says the much greater challenge facing the Alberta canola industry isn’t so much the lack of a Chinese market as the continued drought in many areas of the province.

“I think, to be honest, everybody’s biggest concern right now is the weather across Western Canada,” he confirms. “I really haven’t heard a lot of people talk about China. There biggest concern is getting a crop, period. If you do have a crop, I’ve heard there is something you can do with it. Traders are complaining that farmers aren’t selling, but they aren’t selling because they are not sure they are going to have a crop or not.”

Serfas admits he has reduced his acres sown in canola this year, but, again, that has more to do with the weather than the Chinese situation.

“I did reduce my acres,” he confirms, “but that decision happened before the whole China thing came into play. With the weather we have had the last few years, the risk-reward was not adding up for me.

“So we peeled back a lot of acres, to be honest. In hindsight, it was a good move— both because of the China thing and because of the weather we are having right now.” Serfas says while the immediate concern is drought, long-term he is concerned market volatility will continue to a degree which makes the margins on this great cash crop, canola, continually shrink going forward.

“I don’t think we have seen this before— not in my lifetime I haven’t anyway— where there is so much uncertainty worldwide with trade,” he explains. “It will be interesting to see where it all shakes out, and where it goes. I’m not holding my breath on anything right now.”