All of a sudden it seems like “Game on!” for new crop marketing.
Instead of a clogged grain handling system glutted with mountains of good wheat, oceans of canola and piles of beautiful lentils, it now looks like farmers and the industry will be moving a far more variegated crop and there will be many ways to get better treatment for good-looking crops.
Unfortunately, the biggest factor that has changed the situation is the relentless rain that caused such damage across such a wide swath of Western Canada. Rain is good, but not when rain comes every three days and creates root-rotting soil conditions, a greenhouse effect inside the canopies and stands, and challenging conditions for sprayers.
In early July most crops were looking great. By late August that was no longer the case in thousands of quarter sections.
That leaves thousands of farmers with worse crops than they thought they were going to have in early July. Lots worse.
But that damage is already understood by most growers, who have been anxiously surveying their crops for weeks and have already been lowering their expectations. The silver lining is that many other growers suffered the same problems, so there will be less to move across the Prairies and good quality crops are now much more in demand. That should make buyers more aggressive.
The demand situation for canola was greatly improved last week with Prime Minister Justin Trudeau’s success in getting China to back down from its threat to crimp imports of Canadian canola from Sept. 1 onwards.
That threat was hanging over the canola industry for months, worrying exporters and causing buyers to pull back from making purchases.
Now there seems to be little stopping the flow of canola westward – at least for a while. I can’t imagine the Chinese government quickly overturning the reprieve it gave Trudeau and International Trade Minister Chrystia Freeland, unless it deliberately wants to embarrass them.
Continued Chinese demand and a crop that won’t glut the system suggest farmers should have a good winter of canola movement.
In wheat, there is already lots of talk about protein and quality premiums. Spreads between lower and higher protein crops could become a significant factor if crops are as mixed-up as many are saying.
And the strong demand for pulses now won’t be overwhelmed by overproduction, which was a worry with lentils. That’s not much succour for farmers who have seen all their lentils destroyed by disease, but for those who get an OK crop it should be easier to market and probably bring better prices.
The situation is a lot different now than in early July, when the crops looked so good. Nothing can fix that.
But at least for marketing and moving the crop farmers can expect to face a better winter than they feared when crop projections were so hopeful.