New season brings opportunities, optimism

Spring has sprung with gophers, crocuses and late-season snowstorms. The geese are back and spring auction sales are ramping up. Despite all the usual harbingers, there are many unique aspects to spring 2012.

Those baby calves frolicking in the sun are worth more money than ever before, meaning producers can justify more veterinary expense in the event of a calving problem.

As usual, seed cleaners are still running, finishing up the last of the spring planting needs, but more seed than ever will be canola purchased from suppliers in bags.

A high proportion of last year’s unseeded land will go into the oilseed. In the traditional canola-growing regions, producers will continue to squeeze their rotations. And acreage will continue to expand in non-traditional growing areas.

With old crop at $14 a bushel and higher and with new crop in the range of $12.50, the only question is how big the record acreage will be. July on the Prairies will feature more yellow fields than ever before.

Canola needs lots of nitrogen and sulfur. Indications point to the potential for rising fertilizer prices, particularly for urea. Many producers have locked in their fertilizer supply and are busy trucking it home to the farm.

The wind blows every spring, but this year it’s producing more soil erosion than usual in southeastern Saskatchewan and Manitoba. In many cases, producers have tilled the land they were unable to seed last spring and that has made the soil more erosion prone.

Before the widespread adoption of direct seeding, ugly black dust storms were an all too regular occurrence at this time of year. Thankfully, that is no longer a normal springtime ritual.

The most analyzed change this spring is the newfound marketing freedom for wheat, durum and barley. The major grain companies have new crop contracts available, sparking a brand new topic of discussion among producers. The blockbuster deal involving Viterra, Glencore, Richardson and Agrium is a major change in the landscape.

The CWB has officially launched its pooling and cash pricing programs for the new crop year, but so far has handling agreements only with Cargill and South West Terminal at Gull Lake, Sask., an inland terminal in which Cargill is a minority shareholder.

CWB officials continue to predict handling agreements with all the major grain companies, and they continue to make those agreements sound imminent. Unfortunately, it’s taking a lot longer than initially forecast, which is adding uncertainty to the marketing picture and the CWB’s ongoing role. Without more handling agreements, the CWB will not be a viable option for most producers.

The spring of 2012 will also be remembered for a significant spike in land prices and cash rental rates. It’s a topic of discussion everywhere you travel, as growers share the latest stories about who has bought or rented and at what price.

Should you buy more land before the price goes even higher or should you sell before the market drops? How can you acquire more land so the operation can support the next generation on the farm? Are the current values sustainable?

Spring is always a special time in the production cycle. It’s especially exciting when there’s such a strong potential for profit. For a lot of farming operations and for the industry as a whole, the spring of 2012 will be remembered as a turning point.


Stories from our other publications