WINNIPEG — With the 2015-16 growing season fast approaching in Western Canada, farmers will soon be making their final seeding decisions.
But how many acres will be planted to canola this year is still up in the air.
“I think a lot of people aren’t getting a lot of feedback from growers, as they haven’t really indicated a lot of big changes in acres,” Ken Ball of PI Financial, said.
Despite a lack of information from farmers, there are many estimates by industry professionals floating around, but they also vary widely.
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Some believe that acreage could be as low as 19.33 million acres, a decline of five percent from the 20.32 million acres seeded last spring.
Those who are estimating lower planted area are citing rotational issues, problems with clubroot and more interest in growing soybeans for the anticipated decline.
Farmers are also becoming fed up with the cost of seed and fertilizer, Mike Jubinville of ProFarmer Canada said, adding that prices under $10 per bushel mean there’s more risk than reward to growing canola.
But if the market outlook starts to become more positive, with prices above $10 a bushel, farmers will probably grow more canola, Jubinville said.
Other industry officials believe that canola acreage will be fairly similar to last year.
“We know the acres on canola are going to be pretty much similar to a year ago. They might be down two percent or up two percent,” Errol Anderson of ProMarket Communications said.
Ball agreed that acres will likely be similar to last year, but predicted a slight increase compared to 2014. Agriculture Canada is also forecasting a jump, estimating seeded area at 20.76 million acres in its February supply and demand forecast.
“The price has offered some hedging opportunities here, largely bolstered by the Canadian dollar. A lot of growers do like to get something locked in before they seed, just for security,” Ball said. “They’re willing to grow it because they can pre-sell 20 to 30 percent of it at a respectable price compared to what it was a few months ago.”
Canola could be taking some acres away from wheat because of the more positive hedging opportunities for the oilseed.
“Farmers are really struggling right now to be able to use the wheat market to lock in any prices in advance of seeding,” Ball said.
“They don’t like the way merchants are quoting the price, they find it very bizarre. As a result, some of them for that reason alone are shying away from wheat because they just don’t want to do business with the commercials on wheat.”
