Farmers are rolling the dice and hoping for premiums this spring, say market observers.
That explains why so many have decided to grow barley despite dismal prices and plant peas when it’s hard to find bids for last years’ peas still in their bins.
“All in all, we were looking for larger oilseeds and fewer grains” in Statistics Canada’s survey of seeding intentions, said Mike Jubinville of Pro Farmer Canada.
“I don’t think you would have found too many people making predictions pegging these numbers the way they are.”
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He thought farmers would plan to grow about 10 percent less barley this year. But the survey says farmers plan to keep barley acres about the same as 1997.
“I am scratching my head as to why barley has held up this well,” said Jubinville.
Dulcie Price, of Optimum Agra, said she thinks many farmers will be trying to get their barley selected by maltsters.
“The malt has been sort of like durum. It’s generally been a good performer,” said Price. “Guys are playing the odds, basically.”
But barley that doesn’t get selected doesn’t stand a good chance of fetching a decent price in world markets, said Jubinville.
“The wheat board is just not going to be an aggressive barley exporter next year, so all this barley has got to be consumed domestically.”
He sees weather threats as the only salvation in the barley market in the near term. Both analysts said growers should take advantage of any weather rallies to price portions of their production.
Brian Clancey, of Stat Publishing, thought pea area might drop as low as 1.8 million acres this year. Instead, it looks like it might set a new record at 2.8 million acres.
Clancey thinks many growers were lured by the strong prices of $6.50 to $7 per bushel in the edible green pea market. But a much greater proportion of the total crop goes to the lower priced feed pea market in the $4 to $4.50 per bu. range, he said.
“You can’t reasonably expect to be able to sell to the best market,” he said.
Peas are considered to be more drought-resistant than lentils or canaryseed. Farmers with moisture concerns may have been attracted to peas for this reason, said Clancey.
Before the release of the report, canaryseed prices soared because many in the trade believed growers wouldn’t plant enough.
Instead, the survey showed farmers intend to plant 66 percent more than last year. An hour after the survey was released, Clancey said some players in the market “were still unable to exhale.”
Assuming average yields, Clancey said Canada could have two years’ supply of peas and canaryseed at the end of harvest, if farmers stick to their intentions.
The survey also showed farmers plan to grow more oats. Randy Strychar, an oat analyst at Statcom, noted Manitoba growers are particularly interested in oats with a 37 percent increase planned.
“When you look at the returns per acre across Western Canada over the last year, the numbers aren’t a surprise,” said Strychar.
Observers noted the survey was conducted a month ago, and some growers may changed seeding plans.
