Grain industry officials say Statistics Canada missed the mark by a wide margin in its first production estimate of 2010.
They are convinced the agency grossly underestimated how many acres went unseeded due to the wettest spring on record in many regions of the Prairies.
The result, some analysts say, is a widely read report that contains inflated production numbers, which could distort grain markets.
In its July 31 production estimate, Statistics Canada said western Canadian farmers planted 50.3 million acres of crops, down 5.3 million acres from what they intended to seed in the June 23 survey.
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The dry weather in the west was welcome for preserving grain quality and advancing harvest, but it has resulted in very dry soil moisture conditions.
That’s a far cry from industry estimates. Saskatchewan Agriculture said eight million acres went unseeded in that province alone. Viterra believes it was eight million acres Prairie-wide, while the Canadian Wheat Board pegged the unseeded number at 10.5 million acres for Western Canada.
“There is a significant gap there,” said Bruce Burnett, the CWB’s director of weather and market analysis.
That gap is narrowed by Statistics Canada’s forecast of another 3.8 million acres lost between seeding and harvest, which is higher than Viterra’s estimate of two million acres and the CWB’s prediction of 2.5 million acres.
Even with that adjustment, Statistics Canada’s harvested acreage number is higher than analysts believe it should be.
“It’s tough to see where all the flooded land has gone,” said agriculture commentator Kevin Hursh after reviewing the report.
Rod Merryweather, North American director of seeds and traits for Bayer Inc., said the agency is off base on its canola estimate of 16.6 million seeded acres and 15.5 million harvested. He thinks those numbers should be 15 million and 13.5 million respectively.
Bayer is Canada’s largest canola seed provider. Because 97 percent of all canola acres are planted with certified seed, Merryweather believes he has a good grasp of the situation.
“I think I’m within a few thousand acres,” he said.
Burnett would have more confidence in the survey results if the agency used the same method it used in the June seeding intentions report. But the sample size dropped to 14,400 farms in July from 25,200 farms in June, which he believes caused the problem.
A consequence of overstating the acreage is that international buyers might think Canada will produce a bigger crop than analysts believe is really coming.
For instance, Statistics Canada is forecasting 22.7 million tonnes of Canadian wheat. That is substantially higher than the CWB’s estimate of 21 million tonnes and the United States Department of Agriculture’s forecast of 20.5 million tonnes.
“It’s fairly optimistic to expect production up at those levels,” said Burnett.
The forecast gives the market false hope that Canada can fill more of the void in world wheat markets caused by Russia’s decision to ban
wheat exports.
Burnett said Statistics Canada’s overzealous acreage estimates have been partially mitigated by its conservative yield forecasts.
With some other crops, analysts believe the agency made mistakes in predicting above average yield. Hursh said there is no way Saskatchewan farmers will realize an average lentil yield of 1,400 pounds per acre.
“Looking back at data all the way to 1998, that’s the highest lentil yield in all those years. I have a tough time buying that,” he said.
Burnett predicts Statistics Canada’s seeded acreage numbers will fall in the agency’s forthcoming September or October production estimates.
“They will eventually get this right because they have the best survey out there,” he said.
