Pandemic fever grips the world, but producers still plan to spend as much as $15 billion to plant close to 60 million acres of crops
Unemployment is up, retail sales are down, restaurants are closing, hotels are empty, tourism has ground to a halt, and the oil and gas industry has taken a bruising.
Without a doubt, there are few segments of the western Canadian economy that haven’t been hammered since precautions were put in place to limit the spread of COVID-19.
But if there’s one industry that’s capable of weathering the storm in relatively good shape, it’s agriculture, says Saskatchewan farmer Daryl Fransoo.
“These are definitely strange times, there’s no doubt about that,” said Fransoo, who’s been watching the economic meltdown from his farm near Glaslyn, Sask.
“But as a farmer and an agriculture industry representative, I think we’re in a good spot compared to a lot of other businesses or industries out there.
“As an industry, I think we can help to lead the economy back to where it was, as long as we can get on our fields in a timely manner… and as long as trains, trucks and boats continue to move.”
In the next few weeks, Fransoo will begin the annual ritual of sinking hundreds of thousands of dollars’ worth of fertilizer, seed and crop protection products into the ground.
On his farm, Fransoo will seed about 5,500 acres of cropland this spring.
Across the West, other grain and oilseed producers will plant close to 60 million acres of wheat, barley, canola and pulse crops. In doing so, they’ll spend as much as $15 billion on variable-cost crop inputs including labour, fuel, fertilizer, seed and crop protection products.
That is a huge economic stimulus at a time when the battered western Canadian economy needs it most.
At Fransoo’s farm, the fertilizer required to plant this year’s crop has been in place since early winter. Seed supplies are also on-farm and crop protection products have been mostly delivered.
The only thing needed now is warm weather and sunshine.
“COVID has affected a lot of peoples’ lives but it hasn’t affected how we’re going to seed our crops this spring,” said Fransoo.
“It’s changed some of our habits and practices on the farm as far as social distancing is concerned and following some of the rules and regulations that government has put in place, but as far as production or spring seeding is concerned, nothing has changed.”
Fransoo’s assessment is consistent with comments made by other ag industry insiders, who have suggested that agriculture is one of few industries that could come through the COVID-19 pandemic in reasonably good shape.
Already there’s a renewed global emphasis on the importance of food production, said Fransoo.
“I think it’s time that farmers … and the science behind what we do, gets recognized, at least that’s my hope,” he said.
“We’re not only supporting the economy and providing employment. We’re also producing food as safely as we can, as efficiently as we can and as sustainably as we can, and I hope that finally gets recognized.”
Nearly 1,000 kilometres away in southern Manitoba, farmer Landon Friesen is also gearing up for another busy spring season.
This year, Friesen plans to plant about 7,000 acres on his farm near Crystal City, Man., just a few kilometres from the U.S. border.
Over the past few weeks, Friesen has been working to ensure that as many crop inputs as possible are in place on his farm.
Like Fransoo, Friesen sees disruptions in transportation and logistics as one of the farm’s biggest risks entering the 2020 production season.
As far as spending on crop production is concerned, it will be business as usual.
“We’re getting our seed delivered here in the next week so it sounds like everything is on schedule there,” said Friesen.
“I think we have about 90 percent of our fertilizer in place now and we’re also trying to get as much chemical in place as possible, instead of just going to the dealer for it as it’s needed.
“We just want to make sure it’s on the shop floor instead of sitting at the dealer and relying on retailers to have it….”
Friesen agreed that in the midst of a global health crisis, people are starting to place a greater value on primary agriculture.
“There’s a reason why farming is deemed an essential service. Everybody has to eat,” he said.
“We’ve seen some good, strong upticks in commodity markets lately and I believe that’s going to continue to happen as this (pandemic) drags out.”
Friesen said some farms may postpone spending on discretionary items, such as new farm equipment purchases, for the time being.
In a few months’ time, there might be bargains to be found at farm equipment dealerships that “need to move some iron.”
But as far as this year’s crop is concerned, cutting costs on inputs is not an option worth considering.
“It’s business as usual. Full steam ahead,” said Friesen.
“That’s one area where we refuse to skimp out is on growing a crop.”
Kent Erickson, a grain and livestock producer from Irma, Alta., said agriculture has always been a “steady, stable” engine.
In northern Alberta, many grain and oilseed farmers left a significant portion of last year’s crop in the field, so short–term cash flow needs and debt-servicing capacity are top-of-mind, Erickson said.
Other prevalent risks include potential disruptions in logistics, transportation services and global food supply chains.
It remains to be seen how the pandemic will affect Canada’s agricultural exports to countries like the United States, China and India, for example.
“I guess the one bright spot in all of this is that whenever you have any kind of a crisis… food tends to become the most important commodity,” Erickson said.
“Agriculture is a real base engine for a lot of other industries in Western Canada,” he added.
“We use diesel fuel and gas and lubricants from the oil and gas industry. We fuel the rural engines, whether its groceries or restaurants or equipment dealerships or service companies, and we create jobs in our own communities.
“As long as we can stay healthy and get the crop in the ground this spring, I think everything will be OK,” he added.
“That’s the main thing that this pandemic has done on our farm, is convinced us to put a bit more emphasis on making sure everyone is healthy and safe.”