WINNIPEG (Staff) – The canola industry will have to deal with extremely tight seed supplies in 1995-96, says an industry official.
It will be the third consecutive year of low stocks and raises questions about whether the present size and structure of the industry can be sustained, said Dale Adolphe, manager of planning and development for XCAN Grain Pool Ltd.
“We have grown tremendously over the last two years,” he told participants at Grain World 1995. “We can’t sustain the growth and we may not even be able to maintain it.”
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When the new crop year begins Aug. 1, there will be only enough stock on hand to supply the industry for less than one month, he said.
Adolphe is projecting a 20 percent decline in seeded area, to between 10 and 11 million acres, due to factors including prices relative to other crops, crop rotation requirements and a likely drop in acreage in the southern prairies.
Using average yields, that would produce a crop of around 5.5 million tonnes, second only to last year’s 7.2 million tonnes, but barely enough to meet demand.
“Such a production level would put us into a very tight seed supply situation for the third year running,” Adolphe told the conference.
He said farmers must produce more than seven million tonnes annually in order to support the current level of commercial activity. For 1994-95, the domestic seed crush will be about 2.5 million tonnes and exports will surpass four million.
Unrealistic expectation
That would require 14 million acres to be seeded to canola every year, a figure Adolphe described as “unrealistic.”
He said new varieties that would allow greater production in the south are a couple of years away, as are blackleg-resistant varieties that could take care of some of the rotational concerns.
Earlier in his speech to the conference, Adolphe said world oilseed prices look like they will be heading downwards, citing the following factors at work in the market:
- Major importers like China have bought larger amounts than they actually require in the short term in order to build a nest egg against future tight supplies.
- A large sunflower crop is in the works in Argentina.
- Soybean prospects look favorable, with production now expected to match or exceed records set in 1993-94.
