Some cropping choices may be winners and some may be losers due to the pandemic, but it’s really tough to know what will be happening in the world six to eight months from now.
It’s a reasonable bet that oil prices will still be low by autumn. Even if Russia and Saudi Arabia end their tit-for-tat overproduction, oil demand is going to remain historically low and prices will be depressed.
That means continued tough times for ethanol. Nearly 40 percent of the American corn crop goes for ethanol production in normal times. In these abnormal times, corn is in danger of oversupply.
Cheap corn coming into Canada might put a lid on our feed barley prices. But then there’s the question of currencies. With a low Canadian dollar, corn will be more expensive to import.
And there’s also uncertainty over what will transpire in the Canadian livestock industry. If meat processing capacity is reduced in Canada or south of the border due to COVID-19 cases in the labour force, cattle and hog prices could be seriously affected, reducing feed grain demand.
In other words, there are so many variables and so many possibilities that making predictions is extremely difficult.
The low price of crude oil will also have an impact on biodiesel values and demand, which could affect how much of our canola goes to Europe.
Italy is a major durum processor, but the country has been devastated by the pandemic. Will it be a strong buyer of durum in the fall or will its pasta manufacturing be at a standstill?
What about Algeria, Morocco and Tunisia? They are also major durum importers. So far, their disease cases are quite low, but how prepared are they to curtail the threat?
A major league baseball season seems unlikely in 2020 and yet yellow mustard prices appear to be holding up. Baseball stadiums are usually considered a major customer for hot dog mustard.
The price of canaryseed has been relatively strong for the past seven or eight months and it’s generally expected that seeded acres will increase this spring. But is it a good bet to grow a crop used primarily as a bird seed rather than growing a food crop?
The supply of containers is another issue, particularly for minor acreage crops that aren’t usually shipped in bulk. China appears to be getting a handle on the pandemic, but how long will it be before it starts shipping more products in containers to Canada so those containers are available for the export of our commodities?
What will crop production levels be in countries like Russia and Ukraine where COVID-19 cases thus far have been relatively low?
Statistics Canada has suspended its normal field crop reporting. The seeded intentions report published near the end of April will not happen. While often criticized, StatsCan reports provide the basis for supply and demand estimates.
Statistics from many other countries might be disrupted as well, which could eventually lead to surprises that could be positive or negative for prices.
The old mantra is that people will always need to eat, but what they eat and where they buy could change dramatically in these uncertain times.
By fall, crop prices could be strongly profitable or very disappointing. It’s likely there will be winners and losers, even though identifying one from the other is currently a crapshoot.