With the exception of a few bright spots, crop prices are disappointing. As harvest gears up, many producers are facing lower returns than their cropping budgets projected.
The biggest kick in the pants has to be canola. The 2019 Crop Planning Guide from Saskatchewan Agriculture published in January used a projected canola price of $11.59 a bushel. Instead the market price is about $2 a bu. lower. A 40 bu. per acre canola crop is going to generate $80 less per acre than what many were anticipating at the beginning of the year.
On top of that is quality risk. Many fields are at multiple stages with harvest on hold until green areas ripen. Unless the first hard frost is later than normal, a lot of canola could be downgraded and worth even less money.
In the main pulse crops, lentils have maintained price expectations but peas certainly have not.
Saskatchewan Agriculture used 16 cents a pound for red lentils in its guide. With the lentil harvest underway, prices are a cent or more above that expectation. On large green lentils, the crop budget price was 21 cents per lb. and that’s close to the current market.
On yellow peas, the crop budget price was $6.53 a bu. That’s not too far off the delivered price, but the FOB farm price is lower. Harvest pressure often pushes pea prices down and they recover later in the year. Hopefully, that’s the case this time around.
Green peas have maintained their price better than yellows. The budget price was $8 per bu., while the current market price is just a bit under that value at the farmgate.
Spring wheat is another underperformer. The crop budget used a price of $6.75 a bu. and the market price is about a dollar a bu. lower.
On durum, the crop budget price of $6.96 a bushel is just a bit above the current market. However, on durum there’s grade risk from the dry, hot conditions that prevailed in some areas. Some durum could be too light to make the top grade. Conversely, wet harvest weather could also cause downgrading.
Saskatchewan Agriculture used a feed barley price of $3.94 per bu.. Barley prices vary from one region to the next due to freight considerations, but that price projection is in the ballpark for most of Saskatchewan. Unfortunately, some producers, me included, are getting a nasty surprise from light barley.
To realize full value, feed barley needs to be 48 lb. per bu. I’ve seen discounts of 40 cents per bu. for 45 lb. barley with the discount growing to a full dollar if the bushel weight is only 42 lb.
Flax prices have declined as new crop production approaches, but the January projection of $12.62 a bu. is close. With flax holding and canola dropping dramatically, flax could generate a better net return than canola on many farms.
Although a minor acreage crop, canaryseed is one of the few that has seen a significant improvement in price prospects. Sask. Ag budgeted 21 cents a lb., which seemed reasonable at the time. The current price is around 25 cents and some believe it could have upside potential based on this year’s lower acreage and production.
With the major crops of canola and spring wheat seeing significant price drops and with quality concerns that could impact prices on many commodities the economic outlook has certainly dimmed on many farms.