EDMONTON – Expect canola acres to drop and prices to stay high for the next year, a market analyst told the Alberta Canola Producers Commission meeting.
“I don’t see us dropping off the edge of the cliff,” Larry Ruud told the annual convention here last week.
Ruud said he expects canola acres on the Prairies to hover around 10 to 11 million acres in the next crop year, down from 14 million acres two years ago and 13 million last year.
“I see a significant drop. Ten to 11 million acres is a serious drop in canola,” said Ruud, of Market Maximizer Inc. of Sherwood Park, near Edmonton.
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Increasing canola disease and production problems along with strong prices in competitive crops will encourage many farmers to switch to traditional crops such as wheat and barley at least for a year, he said.
“It’s been a while since we had good price strength on all crops.”
That 11 million acres of canola will produce about 5.5 million tonnes of seed, less than is needed to fill domestic and export orders.
As well, new canola crushing plants in Saskatchewan and Manitoba will battle with existing crushers for the smaller canola crop.
“We should set record levels in the domestic crush level,” he predicted. “Expect the domestic crush to consume over half of the canola,” he told the group.
Industry officials predict there is still about 700,000 to one million bushels of canola in bins on farms which may keep the price from reaching $10 to $12 per bushel for the rest of the winter.
But with the increasing domestic crush and smaller acres next year, Ruud expects stocks to be about half what they are now and prices to be strong.
He said farmers could lock in a $8.25 to $9 a bushel cash price soon for grain coming off the combine in the fall.
