Lentil area up 35 percent | Statistics Canada projects only six million acres of barley
Nobody loves barley.
Farmers usually push a few more acres into canola than they expected in the spring.
Special crops acreage is volatile year to year.
Those long-lived phenomena appear to be playing out again this year in the farm fields of Western Canada.
Statistics Canada’s seeded acreage numbers show a 14 percent decline in barley acres, an increase in canola acres to 20.2 million acre, and big increases in the acreage of some types of peas and lentils.
“Barley acres just over six million? Gee, that’s not much,” FarmLink Marketing’s Jon Driedger said June 27 after the Statistics Canada report was issued.
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Long-term trends have been friendly to canola, seeing its acreage rise each year as farmers seed every acre they can to the oilseed.
Traders and analysts are often surprised with canola acreage increases, not only beyond initial Statistics Canada estimates of intentions but beyond their own boosted estimates of what farmers really have put in the ground.
This might be one of those years, if farmers seeded what they intended.
The flip side of that coin is the phenomenon of barley, formerly one of Western Canada’s dominant crops but now failing to hang on to core acreage.
Wheat has also had trouble fending off acreage losses to canola, corn, and soybeans, but it has occasionally clawed back some acreage and regained popularity.
However, with barley it’s been a steady slipping of acreage. This year’s 14 percent decline pushes it further down in prominence, suggesting it is grown mostly by farmers with close connections to the cattle feeding market, whether with their own animals or local feedlots.
Malting barley is becoming a special crop, mostly grown in tight connection with end users.
“We’ve seen maltsters coming out early with some pretty decent contracts,” said Driedger.
A common market refrain is that “the answer to low prices is low prices,” and that principle may offer some relief for farmers who stuck with barley this year, according to Errol Anderson of Pro Market Communications.
Farmers have cut back so much, the price outlook is becoming bullish.
“If StatsCan is accurate about six million, we’ll have some snug supplies next spring,” said Anderson, who works closely with feed barley buyers. “If (other cereal) crops are OK, the market may recover from October onwards.”
However, continuing wet and cool weather could significantly downgrade wheat quality, which would see bigger supplies of feed wheat available to livestock feeders. That would weigh down feed barley prices.
Chuck Penner of LeftField Commodity Research said the story in pulses is interesting, with differences showing up within crop types rather than between them.
Green peas are surging in acreage, but yellow peas have increased only slightly. The green increase was generally anticipated, but the lack of increase in yellow might create a peppy market later in the year.
“It’s already a good market,” said Penner.
One hundred percent of the in-crease in lentils is in reds, while greens have fallen a bit.
Penner said he thought the red market was fairly strong, so the increase shouldn’t be too bearish. However, the lack of increase in greens could help boost prices for that type.
“Greens could get more interesting as the year goes on,” said Penner.
The Statistics Canada report had little impact. Most traders said the market had already moved on to worrying about poor growing conditions in Western Canada, with revisions in acreage a secondary concern.
“The weather in the next week or two is going to matter a heck of a lot more,” said Driedger.
