Canada’s canola, wheat, pea acres forecast to rise

(Resource News International) — Canola, wheat, and field peas appear poised to gain acres in Canada for the 2008-09 crop year, according to industry sources. Lentils and edible beans are also forecast to see increased acreage while barley and oat acres are expected to decline.

Fertilizer prices, rotation concerns, economics and familiarity will be the factors at the forefront of producers’ minds as they get set to finalize their seeding decisions.

“To me certainly wheat looks attractive. Given the opportunities in fixed wheat contracts, if growers can lock in at $10 per bushel, that is fantastic,” said Mike Jubinville, an analyst with ProFarmer Canada in Winnipeg. “Canola also looks very optimistic. On the other end of things, feed barley and oats could potentially lose acres.”

Doon Pauly, crop specialist with Alberta Agriculture and Rural Development’s Ag-Info Centre at Stettler, offered a similar forecast. “I wouldn’t be surprised if canola, wheat, and pea acres go up slightly and barley and oat acres go down slightly.”

In Alberta, the extra land will come at the expense of acreage normally used for perennial forage rather than from traditional row crops, Pauly said.

“We received a lot of calls in the fall and spring about people terminating forage stands. We’re going to see more annual crop acres in Alberta than we’ve seen in recent years.

Any increase in land is not really going to be at the expense of crops other than the perennial grasses,” he said.

Meanwhile, Pauly believes barley acreage may decline because its price is lagging behind other crop options. If farmers have the choice between $4-per-bushel barley and $12-per-bushel canola, it’s obvious which crop they will decide to seed. He added, however, that barley will continue to be grown as a rotation crop in 2008-09 and that there is still money to be made with barley, a far cry from the situation even just a couple of years ago.

Pulses

As far as pulses go, field pea and lentil acreage is likely to be expanded as low carry-out levels and low stocks-to-use ratios encourage strong prices, according to Dale Risula, crop specialist with Saskatchewan Agriculture in Regina. In Manitoba, Jubinville said more edible beans may be seeded than in 2007-08.

For lentils, Risula said he would not be surprised to see an increase in the red variety over the green variety as has been the trend in recent years.

For field peas, a factor likely to encourage its seeding,
in addition to strong prices, is the high cost of fertilizer.

“I think the high price of nitrogen fertilizer might pressure a lot of producers to grow more field peas than they normally would,” Risula said. “The field pea is able to create its own nitrogen and is also able to contribute some amount to the following years’ requirements. That will likely have an impact on producer decisions.”

At the same time, while crops needing little or no fertilizer are always attractive, Pauly didn’t think input costs will deter farmers from planting crops that do require the use of chemicals.

“It’s quite a bit different than two years ago in the spring when fertilizer prices were really high and commodity prices were still low,” he said. “We’re in a drastically different situation now in terms of crop prices. It would have to take a significantly lower average yield situation coupled with traditionally high fertilizer use to pencil out losses. So yes, fertilizer prices are high but crop values will really make up for that.”

Regardless of what farmers decide to seed this spring, their plans will likely be finalized by the end of March or the middle of April at the latest. One reason, Risula said, is that many crop insurance programs have a March 31 deadline.

Another reason is that in many cases, products such as fertilizer and seed must be ordered months ahead of time.

“The best canola varieties have probably been sold out since around December,” Pauly said. “There are a lot of solid canola varieties out there but I suspect the hybrids have been long sold out. So, as far as that decision is concerned, it’s long past.”

Despite all of the talk this year about the intensity of the 2008-09 crop battle, Jubinville said that in reality maybe only 15 per cent of crop decisions are “swing decisions,” decisions based solely on considerations of what product will give producers that best rate of return. The majority of decisions, the outstanding 85 per cent, are based on agronomics.

Risula agreed. “Rotations are something that a lot of producers have made an integral part of their farming operation to reduce the incidents of disease, insect buildup or even weed problems. Every crop can kind of bring on a particular problem if you grow it too many years in a row.”

Canola maxed

Jubinville believed canola acres, for instance, may be limited by the need to rotate the crop out this spring.

“It’s been brought to my attention, that in some places in Alberta, rotations have already been pushed to the limits for canola,” he said. “So can we gain two million acres of canola? I doubt it. A Prairie-wide gain of 500,000 acres seems more realistic.”

While that may be true for some areas, Pauly emphasized not every Alberta farmer had pushed canola rotations to their limits.

“Also, in the areas that it is a problem, land will probably will be shifted to CPS or Andrew to be used for either feed or ethanol,” he said.

In the end, crop familiarity is also likely to play in producer decisions for 2008-09, Jubinville said.

“You can grow yellow mustard — that is a big money maker — but there are not too many growers who are going to do that, they’re just not. In situations like this, it often comes down to grow what you know. And farmers know wheat and canola.”

Agriculture and Agri-Food Canada 2008-09 acreage forecast, March 6, 2008, in millions of acres.