If price predictions are correct, the 2024-25 crop year will see significant price declines for most crops. Wheat and flax are the only crops where prices may be a bit better than the crop year that just ended.
The Market Analysis Group within Agriculture Canada issues regular outlooks for the principal field crops grown in this country. Production, supply, carryover and demand are assessed both domestically and internationally.
The price predictions are an average for the entire crop year. With the 2023-24 crop year nearly over when the July 22 report was issued, it’s reasonable to expect those forecasted prices to be very close to the real numbers.
Read Also
Determining tariff compensation will be difficult but necessary
Prime minister Mark Carney says his government will support canola farmers, yet estimating the loss and paying compensation in an equitable fashion will be no easy task, but it can be done.
For the year ahead, all sorts of events could happen to change the outlook, but the price forecasts appear credible based on the information currently available.
First the good news. The average price of spring wheat is expected to be slightly ($5 per tonne) better than last crop year. As well, flaxseed continues to show some strength with the price prediction improved by $35 a tonne compared to last year.
While wheat is looking a bit better, durum is not. Agriculture Canada is expecting the average price of durum to fall from $430 a tonne last crop year to just $350 a tonne this crop year. That would be a mere $20 a tonne premium to spring wheat.
Feed barley prices have been soft and are expected to get even softer with the new crop average price slipping by $20 a tonne, the lowest in three years. Oats are expected to be lower by $40 a tonne, the lowest in four years.
The average price for canola is expected to be $25 a tonne lower. We sometimes see price moves of nearly that much in just a day’s time. No doubt there will be better than average pricing opportunities from time to time, but the Agriculture Canada analysis is based on the price midpoint.
The news isn’t good in pulse and specialty crops, either. The average price of peas is expected to be down by $35 a tonne. However, there have been big differences in the price of yellow peas versus green peas and maple peas, the latter two being much more attractive.
The average price of lentils encompassing both red and green types is pegged at $830 a tonne for this new crop year, down dramatically from the $1,010 a tonne posted for last year. The chickpea price forecast is down $125 a tonne.
Canaryseed is down $155 a tonne with mustard price expectations crashing by a monstrous $370 a tonne.
Will better yields and higher levels of production compensate for the expected drop in prices? In some cases, yes, while in other cases, no. The jury is still out on what yields will be. The extended heat wave has cut yields in many parts of Alberta as well as many areas of western and southern Saskatchewan.
Despite those declining yield prospects of recent weeks, expect much smaller crop insurance claim numbers and payout levels than last year. That’s a source of income that will be dramatically reduced for this year’s income equation.
Some producers with big yields are going to have a good year despite declining prices, but the overall grain sector sentiment has become guarded. Unless unforeseen events improve price prospects, producers aren’t going to be in a spending mood.
