Stop it already. Let’s save the “times are hard and things are bad” whining until we have more serious problems to complain about.
By its nature, media concentrates on negatives. Houses not on fire aren’t news. This is understandable. To a large extent, it’s the job of media to highlight problems and issues.
However, we shouldn’t perpetuate the view that the grain economy is struggling when it isn’t.
Yes, there were certainly problems to report this year. Quality is ugly in some crops, particularly durum and lentils. Excess moisture cut yields in some regions. Some land was completely flooded, and the value of crop overwintering in fields in Alberta and Saskatchewan is in the range of a billion dollars.
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However, we must not lose sight of the fact that farm cash receipts in the grain sector remain very strong.
The simple truth is that Western Canada produced one of its largest crops ever, and prices remain decent for most grains. Much of the crop in the field will eventually be harvested, and what isn’t salvageable will be factored into crop insurance.
Crop insurance should be applauded for the support it’s providing. It is a strong safety net when grain prices are good. This year, quality factors pushed many producers into a claim position.
For example, in Saskatchewan the quality factor on No. 5 durum with 2.1 to four percent fusarium has recently been announced as .36. That turns a 50 bushel per acre durum crop into 18 bu. for crop insurance claim purposes.
Yield shortfall payments were quick, and quality factor money is now flowing. To its credit, Sask-atchewan Crop Insurance assessed claims on crops where harvest had been completed, even if producers weren’t done harvesting all their crops.
Bad news is far more popular when it comes to agriculture. Suggesting that farmers are doing well risks a backlash because there are always exceptions and there are always storm clouds on the horizon.
There’s also the issue of dashed expectations.
The excellent crop potential back in June and July faded in many areas when it just wouldn’t stop raining. So the year failed to match its potential and on top of that, it was one of the most prolonged harvests ever.
Despite the disappointment, most grain producers are going to do all right financially and some are doing very well.
While there have been many tough years in the grain sector, this isn’t one of them, at least not when you look at balance sheets.
Some of the “times are tough” mantra is being transposed to the Canadian Prairies from south of the border, where the price of major crops scarcely covers the cost of production. Farmland prices have been declining in the United States for the past two or three years.
Our situation is different. The low value of the Canadian dollar has shielded us from much of the drop in world grain prices. Our farmland prices may not be rising as fast as they were a few years ago, but they aren’t dropping. As well, there’s very little indication that land rents are dropping, either.
Next year will bring new challenges, and there’s no guarantee of long-term profitability. But for 2016, despite the setbacks, it’s a Merry Christmas for grain farmers.
