The first acreage estimates for 2011 suggest the Cinderella crop is poised to steal King Wheat’s crown.
“This could be the year,” said Chuck Penner, founder of LeftField Commodity Research.
“It’s possible. It could easily be.”
Most analysts are projecting 18 to 20 million acres of the oilseed, up from 16.8 million seeded in 2010.
That would put canola in a dogfight with wheat, which occupied 17.9 million acres of Canadian farmland this year.
Brenda Tjaden Lepp, co-founder of FarmLink Marketing Solutions, is forecasting 18.3 million acres of canola and 18.5 million acres of wheat.
Read Also
Alberta’s beets a sweet domestic segment in Canada’s sugar supply
The sugar beet industry is showcased during a Farm to Table tour, as Taber features the last remaining sugar beet processing plant in all of Canada.
“It could be tight. It could go either way,” she said.
Robert Hunter, vice-president of communications with the Canola Council of Canada, has heard forecasts calling for a 17 to 19 percent increase in canola plantings.
“Wow, it could be really big because of the acres that didn’t go in this year,” he said.
Seed suppliers tell the council that canola has been in high demand this fall.
Brian Clancey, editor of theStat Publishingnewsletter, said canola “will undoubtedly set a new record at around 19 million acres.”
Analysts say it is remarkable to be having a discussion about canola becoming Canada’s top crop at the close of a decade that began with more than twice as much wheat being grown as canola.
“That’s quite something. Put those two lines on a graph and it could be pretty interesting,” said Tjaden Lepp.
Chris Beckman, oilseed analyst with Agriculture Canada’s market analysis division, recently revised the 17.3 million acre estimate contained in his Nov. 26 canola situation and outlook report. His new number is 18.8 million acres.
“That’s based on good prices and new hybrid varieties that seem to be standing up better and yielding better than canola was five years ago,” he said.
The only caveat in Beckman’s forecast is that it may be too wet to plant the acres that went unseeded in Saskatchewan and Manitoba last year.
Tjaden Lepp attended a recent Informa Economics conference where one of the presenters predicted 16.1 million acres, for that reason.
“He said, ‘it’s too wet to get the acres in.’ I say, ‘it’s $200 an acre. The acres are going in,’ ” she said.
FarmLink began its forecasting exercise with the assumption that there would be a total of 65.1 million acres seeded to crops in Western Canada in 2011. Then it assigned those acres based on potential demand.
“We had far more needed acres than we had available acres,” said Tjaden Lepp.
So the FarmLink analysts were forced to refine the demand outlook based on “the strength of the appetite” for the different crops and canola came out on top.
“Canola has a bigger need to buy those acres in because you have recent capital investment (in crushing plants and) you have export demand that is a lot more inelastic.”
Penner said wheat economics also look good for the coming crop year, which may keep canola from stealing wheat’s crown for another year or two.
“From what I understand, the winter wheat acres are up fairly sharply in Eastern Canada,” he said.
Of course, how the acreage battle ultimately plays out will largely depend on how the spring unfolds. If conditions are good, farmers may plant some of the canola they couldn’t get in the ground in 2010.
But if it’s another wet spring, they are unlikely to risk planting a high cost crop, shifting instead to wheat, oats or barley.
Penner heard one forecast calling for 20 million acres of canola, but he thinks that is unrealistic. His outlook is for something in the low 18 million acre range.
“I wouldn’t stick my neck out too much further than that,” he said.
