It appears to be a pivotal juncture for Statistics Canada and its field crop reporting. When the highly anticipated seeding intentions report was released on April 27, most of the grain trade dismissed the numbers as completely wrong.
It’s not unusual for the trade to second guess information from StatsCan surveys. Often, it’s a timing issue. Too much time elapses between when producers are surveyed and when the information is tabulated and released.
For this report, it’s more than timing. All the analysts were predicting another record acreage of canola. However, StatsCan says canola acreage in Western Canada will drop by seven percent. That’s a huge discrepancy.
Most analysts were confidently predicting big drops in lentil and pea acreage, in the range of 20 percent. StatsCan, based on surveys with thousands of producers, is calling for much more moderate decreases of only eight percent on lentils and 5.5 percent on peas.
So who is right, the analysts or StatsCan? The marketplace is obviously siding with trade estimates. The StatsCan numbers should have been a market shock causing an immediate increase in canola prices. That didn’t happen.
It’s been a long-running joke that farmers don’t tell the complete truth to StatsCan. Until now, the assumption has been that the lies balance out and that the surveys are still be best estimates available.
But what if farmer fabrications lean one direction? What if a significant number of producers were convinced this spring that deflating the canola acreage estimate might help prices?
That has long been the fear in some minor acreage crops like canaryseed. Are producers telling fibs, downplaying acreage and production in an effort to boost prices?
But if StatsCan can’t generate justifiable acreage numbers on canola, the number one crop, what’s the point of the whole exercise?
Maybe the trade is wrong. Maybe producers are fearful of disease issues and tired of the big investment required to grow canola. Plus, dry conditions in some southern areas could cause some producers to back away from canola.
If that’s what’s happening, it would be useful for the entire industry to know. If that isn’t a reasonable reflection of intentions, what’s the use of the whole survey process?
You’d be hard pressed to find producers who are fans of the StatsCan reports. In my opinion, farmers are the ones who have the most to gain by having access to publicly available credible information, but I’m in the minority.
The timing issue is something that could and should be fixed. In this age of instant communication, there’s no reason why surveys results take so long to tabulate.
However, if the problem is that large numbers of farmers give false information because they think it might influence the market, that cannot be easily fixed and it may be the fatal last blow to the credibility of StatsCan acreage numbers.
On the other hand, maybe, just maybe, StatsCan’s estimates are closer to reality than all the trade guesses. That would be an interesting end result and would go a long way to exonerating the much-maligned reporting process.
Kevin Hursh is an agricultural journalist, consultant and farmer. He can be reached by e-mail at email@example.com.