Agriculture Canada’s Market Analysis Group is forecasting sizable acreage shifts in the upcoming growing season. The predictions are in the Jan. 25 edition of Canada: Outlook for Principal Field Crops. Released regularly, these reports include supply and demand projections from long-time federal analysts.
With durum prices running at a discount to most classes of wheat, the department has penciled in a durum acreage drop of 25 percent. However, durum has been gradually showing a bit of price strength, and my guess is that the acreage reduction won’t be quite that extreme.
Some of the durum drop will go to wheat. Agriculture Canada is calling for a nine percent wheat acreage increase with the four percent decrease in winter wheat offset by a 10 percent increase in spring wheat.
If the drop in durum acreage is less than expected, it would follow that the increase in wheat acreage may not be quite as high as anticipated.
Feed barley and oat prices have been a pleasant surprise, causing Agriculture Canada to predict a seven percent increase in barley and a five percent increase in oat acreage. Those would seem to be reasonable predictions.
Canola acreage is always a matter for great speculation. Agriculture Canada is predicting a one percent increase based on a shift out of soybeans and lentils in Western Canada. This aligns with the observations of many in the canola industry.
The Agriculture Canada report is for national acreages, and they’re calling for a slight decline in soybeans based on what they call a modest decline in Western Canada. What they consider modest is not defined.
As for lentils, the area seeded is expected to fall 11 percent due to weak prices. This would be on top of last year’s 14 percent drop. Like durum, lentil prices have been gradually improving, leading me to believe that this year’s acreage decline might not be as large as the department expects.
On peas, its prediction is for acreage to remain virtually the same as last year. Because this is another crop showing improved prices, particularly on green peas, it wouldn’t be surprising to see pea acreage actually increase a bit following last year’s 12 percent drop.
According to Agriculture Canada, flax acreage could be up 15 percent this year. With flax prices relatively strong, that would seem a valid prediction. Last year, flax acreage plummeted by 18 percent, so a 15 percent increase wouldn’t even get us back to the 2017 acreage.
On mustard, Agriculture Canada is predicting acreage to remain virtually unchanged, a prediction at odds with Chuck Penner of Leftfield Commodity Research, who expects a 26 percent decline. Based on the drop in mustard prices since last year, I think Penner will be closer than Agriculture Canada.
Chickpeas, based on the Agriculture Canada analysis, are set for a 58 percent acreage drop. Acreage nearly tripled in 2018 and with the precipitous drop in kabuli chickpea prices, it’s reasonable to expect acreage to retrench. However, with the corresponding drop in seed prices, chickpeas actually pencil out quite well and the acreage drop may not be as large as expected.
While lots of seeding plan adjustments could still be made over the next three months, trying to gauge farmer thinking is always an interesting exercise.