Just as input bills are coming due, crop prices have shot up.
And as wheat hits 10-year highs, farmers are able to enjoy a small reminder of the days when the crop was a big moneymaker.
“It’s nice to see it going up. Guys are pretty happy about that,” said Marengo, Sask., farmer and grain elevator worker Adrian Boisvert.
“I hope they stay up.”
World wheat prices have staged a spectacular rally in the past month, shooting up about $1 Cdn per bushel in value since mid-September on U.S. wheat futures contracts.
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That takes prices back to nominal levels not seen since 1995-96. Some analysts expect prices to back down a bit, while others forecast a continuing bull market. But almost all analysts expect wheat and feed grain prices to remain relatively strong through the winter.
That’s a relief, said Bill Dobson, president of Alberta’s Wild Rose Agricultural Producers, because farmers need the cash.
“Any time prices go up, it’s good,” said Dobson with a laugh.
“We’ve had a lot of years of low grain prices to make up for. This will at least create some optimism.”
But he was quick to point out that matching 1995-96 prices isn’t as good as it sounds.
“These prices certainly haven’t skyrocketed when you take inflation into account. We’re still not at what a sustainable return for the investment we make is, but they look good compared to the last three or four years,” Dobson said.
Grabbing today’s good wheat prices can be complicated for a prairie farmer because of the Canadian Wheat Board marketing system.
Most prairie wheat prices will come from the wheat board’s pool accounts, which won’t be finally set for another year. The wheat board’s Pool Return Outlook are just estimates of what farmers are likely to receive by the time the pools are closed out.
Right now, PROs are considerably below U.S. futures prices on comparative grades.
But the wheat board’s Fixed Price Contract is offering farmers an indirect way to lock in that U.S. market price, which some farmers are now doing at the urging of their advisers.
Other crops are also attractively priced now, such as lentils and peas, which Boisvert said is making farmers in his area ecstatic. Feed grains are also bringing in a lot more money than normal.
Recently his elevator was offering $3.25 per bu. for non-board feed wheat and $2.50 for feed barley.
“That’s phenomenal,” said Boisvert.
For some farmers, though, today’s high prices are just a tease. Grain movement in certain areas has been slow and farmers there have been able to move little wheat so far.
“The quotas aren’t opening up and they’re not moving much grain,” said Ron Medwid of Swan Valley Co-op Ltd. “Things are sitting tight and they have to get it moved.”
Farmers in his area of northwestern Manitoba harvested a big crop with excellent quality, but many are anxious to start moving it and receive some of the high prices they have been reading about.
For farm supply dealers, getting money into farmers’ hands is crucial.
“Anything that can help get some profitability down to the farm helps everyone along the chain,” said Medwid.
