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Millions of acres won’t be harvested

Canola yellowing in rain soaked soil after excessive rains in June 2014.  |  D’Arce McMillan photo

What a difference one storm can make.

“I’ve never really been through such a dramatic change in the outlook for so many crops based on a single week’s worth of weather,” said Brenda Tjaden Lepp, chief market analyst at FarmLink Marketing Solutions in Winnipeg.

“It’s going to become apparent fairly quickly how bad the damage was and my sense is that it’s going to be worse than what a lot of people initially thought.”

Recent record rain that fell across a huge portion of southeastern Sask-atchewan and southwestern Manitoba could take at least a million acres of seeded cropland out of production this year and possibly more, industry analysts said.

That’s on top of an estimated two million acres that didn’t get seeded this spring due to excess moisture.

Analysts are still assessing the extent of yield losses caused by excess moisture.

The emerging picture points to significant production losses, with crops such as peas, lentils and canola, which do not do well in wet soil, likely taking the biggest hit.

Tjaden Lepp said it is still too early to quantify the extent of damage but the losses will be significant.

Industry estimates suggest that at least three million acres in Saskatchewan and Manitoba, and possibly as many as six million acres, will not produce a crop this year.

These numbers include two million that went unseeded and another million or so that are assumed to be lost completely after recent rains.

Heavy, persistent rain fell across much of eastern Saskatchewan and Manitoba during the Canada Day weekend, dropping anywhere from 160 millimetres up to 260 mm in the hardest hit areas.

The worst damage happened in an area stretching from Indian Head, Sask., in the west to Portage la Prairie, Man., in the east.

In southeastern Saskatchewan, where crops were already struggling with excess moisture, heavy rain fell on both sides of the TransCanada Highway as far north as Yorkton and Foam Lake, Sask., and as far south as the United States border.

The epicenter of the storm was in an area stretching south of the TransCanada, including the communities of Broadview, Moosomin, Redvers, Carlyle and Gainsborough.

Tjaden Lepp said she has already taken one million seeded acres out of production.

That number could climb depending on how waterlogged crops respond over the next week or so.

Depending on the crop and its stage of development, many more acres could be written off.

“Peas and lentils are a good example,” Tjaden Lepp said. “Those crops have been struggling for the past two or three weeks (before the most recent rain).

“There’s no amount of perfect weather that can pull through a crop that’s standing in six inches of water and was wet to begin with.”

President of AgriTrend Marketing Derek Squair of Moosomin, Sask., said production losses caused by late-June rains will likely be in the million-acre range.

“The affected area is big … and it’s hard to say how many acres (were lost) but we’re estimating that about four million acres were affected in outlying areas and in the centre of it,” Squair said. “It’s early … but we’re taking out about 20 percent that is damaged and won’t come back and there’s probably another 10 percent that would have a significant lesser yield but will still make a crop.”

On top of lost production, Squair said crop development across much of the affected area is as much as three weeks behind.

“We should be in full flower in canola and full flower or starting to head out in wheat and it’s still at least two weeks away from that,” Squair said July 4.

“It’s kind of a double-edged sword because there’s the drowned out acres and the areas that are too wet to make a crop but there’s also the lateness and that’s going to be a huge factor in September.”

Both Squair and Tjaden Lepp said markets have been slow to digest the news from Western Canada.

The United States is looking at a record large soybean crop .

That has tempered the news of reduced canola production in Western Canada, which could be as much as 700,000 acres below recent estimates.

Tjaden Lepp says market reaction to lost production in Western Canada will become more visible in the coming weeks, especially for crops that struggle in wet conditions and others that entered the year in short supply.

“It’s not going to be very long now before you’re going to see what the extent of the damage is in the fields,” she said.

Market impact on crops such as durum are likely to be relatively small, given that durum is normally among the first crops seeded in the spring. Also its main growing area is west of areas hardest hit by recent flooding.

Market impact will be more obvious on crops commonly grown in southern Manitoba, such as sunflowers and dry beans, both of which entered the year with tight supplies.

Impact on spring wheat markets will be worth watching.

Generally the wheat market is depressed by ample world stocks and an expectation of good crop in other major wheat producing regions.

Tjaden Lepp thinks spring wheat production in Western Canada could be down eight or nine million tonnes from last year’s record harvest.

“From what I’ve seen … spring wheat production could be down to 22 or 23 million tonnes compared to 31 last year,” she said.

“I’ll be really interested to see how the market digests that. In a world market situation where you’ve got ample supplies, does eight or nine million tonnes lost out of western Canada matter or not?”

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