Good year ahead for most crops | Sask. crop guide paints rosy picture for black soil zones
Saskatchewan’s Crop Planning Guide is celebrating its 25th anniversary with a bang.
“This one could be one of the best,” said Joe Novak, business economics specialist with Saskatchewan Agriculture and author of the 2012 guide.
“All across the board, farmers should be able to meet variable costs.… It just looks like a promising year.”
Almost every crop grown in the province’s black soil zone is expected to cover all of a farmer’s variable and fixed costs with some delivering a tidy profit. The two exceptions are red lentils and feed peas, both of which dip slightly into the red.
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Even cereal crops, which Novak usually describes as “loss leaders,” are shaping up to be more than just a rotational consideration this year.
“They can actually make some guys money,” he said.
Malt barley is expected to be the profit leader in the black soil zone, delivering a net return of $151.77 per acre.
Novak stressed that the guide should be used as a template. Farmers are strongly encouraged to use the interactive calculator on the ministry’s website to enter their own numbers.
The planning guide was put together in early December so it is already out of date. As a bare minimum, growers should update the commodity, fertilizer and fuel prices.
They also need to use yields that better reflect their particular operation. For instance, some growers in the black soil zone might think 62 bushels per acre is too low for an oat crop.
Novak expects a lot of producers will scoff at the notion that canola will be the fifth most profitable crop in the dark brown soil zone.
“Excellent. I love that attitude because now what you’re going to do is you’re going to go and disprove me and you’re going to go through and enter your own numbers and that’s what I want you to do,” he said.
Chuck Penner, market analyst with LeftField Commodity Research, is one of the skeptics. Oilseeds are shaping up to be a good bet this year, based on his analysis.
“Canola is a strong performer again, no question about it, even though futures are way off their earlier highs,” he said.
“Surprisingly, flax does not look too bad. It’s not at the top of the heap but it’s not at the bottom either.”
Penner does not share Novak’s enthusiasm for cereals, aside from malt barley, which stacks up well.
“The numbers that I’ve run on oats, it’s the same-old, same-old for oats. It’s kind of hanging at the bottom of the pack.”
He said new crop bids for spring wheat and durum have been rather ho-hum.
“Strictly from a dollars and cents perspective, they’re looking OK but no great shakes.”
There is one clear winner for the pulse crops, at least for farmers in the brown soil zone.
“Kabuli chickpeas are blowing everything else away by a wide margin,” he said.
Green and yellow peas and green lentils are showing good returns, but growing red lentils doesn’t appear to be a good prospect this year.
Novak said pulse crops often pencil out as one of the big moneymakers, but that can be deceiving. He encouraged growers to conduct a sensitivity analysis for those crops by entering better and worse yields to see what that does to the numbers because pulse yields can be wildly variable.
Large and small green lentils were the big winners when the first guide was published in 1987. At that time, the province analyzed only eight crops and it wasn’t broken out by soil zone.
Novak said it’s fun to look back and see that canola seed cost a farmer $4.25 per acre 25 years ago. Today he uses a cost of $51.25 and it’s still one of the most profitable crops.
Many growers eagerly await publication of the guide because it provides one of the first price estimates of the year. Saskatchewan Agriculture surveys 25 analysts from across the three prairie provinces to get their best guess on what will be the average price for each crop that year.
However, there are a surprising number of farmers who don’t even know the guide exists. Novak said that’s a shame because it is a free and easy-to-use tool that can assist growers with crop planning during the winter.
However, whatever economic information growers glean from using the guide should take a backseat to rotational and disease and weed considerations.
