You might expect canola acres to shoot through the roof and cereal acres to fall through the floor this spring, given their prices, but analysts say a host of factors could hold farmers back from pushing acreage too far in any direction.
They say canola acres might be fewer than predicted in the Statistics Canada seeding intentions report with cereal grain acres higher. The report is due April 19 and is based on interviews with farmers in late March.
“The Stats Can numbers could be fairly inaccurate if the weather stays dry,” said Errol Anderson of the ProMarket Wire report.
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“There might be more barley going in than we expect.”
Analysts also say the area of some special crops could increase.
These factors might hold canola acres close to where they were last year:
• Drought on the western prairies. Farmers may be scared to seed too much of the costly-to-manage crop if they fear a lengthy drought. Cereal crops tend to be tougher in dry conditions and cost less to produce.
Most analysts expect farmers to increase canola seeding because it is the most profitable big acreage crop. They also expect red lentil acres to surge, as well as other special crops like canaryseed and edible beans.
But last winter’s expectation for many more oat acres appears to be changing as farmers react to falling new crop forward prices. Oats prices held up better than other cereals in the early winter, but slumped in the latter half of the winter, giving up most of their advantage.
“There had been a swing (of intentions) out of wheat and into oats, but oats prices have slipped so much, that might be gone,” said Jonathon Driedger of FarmLink Marketing Solutions.
That means cereal grain production might slip a little this year, but not radically, because there is no clear winner among the cereals.
“They’re all kind of dogs, but because you have to put a cereal in, they might not be as down as some people would expect,” said Driedger.
Clubroot has kept some farmers from pushing canola rotations, but Driedger thinks many may gamble with disease pressure in order to seed a bit more of the oilseed.
“It hasn’t bitten them in the butt when they’ve tried to do it in the past, so they may push that envelope again thinking they can get away with it,” said Driedger.
John Duvenaud of the Wild Oats newsletter said farmers will definitly seed more canola because it has looked good all winter, but the size of the increase depends on moisture at seeding time.
“There’s more of a move towards canola,” added Duvenaud.
If any crop is likely to show both acreage and profitability surprises, it is barley, added Anderson.
Farmers may increase acres because of drought and may get better prices than expected because of drought-induced hay and feed shortages.
“If we do have a dry year, feed prices are really going to start going up,” said Anderson.
Driedger said he doesn’t expect to see a radically different acreage mix from 2009.
“More than ever, guys are uncertain. So many crops are marginal or have negative profitability. When guys are uncertain, they default to rotation,” said Driedger.
