The seeding intentions guessing game is always a lot of fun — what crops will be up this year and by how much and which crops will see their acreage shrink and how will all of this ultimately affect the market?
Some different dynamics are at play this year.
Most analysts agree canola acreage will be up yet again, despite rotational concerns. Prices have stabilized and even seem to show strength from time to time. When you start comparing canola to other crops, returns are quite favourable.
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In southern regions where canola isn’t a mainstay, the dry conditions are causing some producers to pause. Canola is a high input crop with particularly high seed costs, and soil moisture is record low in some cases.
Still, canola acreage will be huge. When a crop is already dominant, a further five percent increase is a lot of acres.
A lot has been made about the tariffs imposed by India on field peas and lentils and how the carryover of those crops is going to be burdensome. Huge acreage declines have been predicted in both 2018 peas and lentils in this country.
In my opinion, the acreage drops won’t be quite as extreme as what some analysts are forecasting. For some producers in southern Saskatchewan, lentils typically account for half of their seeded acreage. It’s uncomfortable to make a massive switch to another crop. Besides, maybe India will have a production shortfall and the tariffs will be rescinded.
On peas, the price isn’t horrible even with India out of the market. Peas have many uses and other importers that can take up some of the slack. Yes, pea acreage will be down but perhaps not by the 20 to 25 percent that some are predicting.
It’s likely that more of both the lentils and peas grown this year will be the green types.
Red lentils, the dominant class, are only 18 cents a pound, while No. 2 large green lentils are around 29 cents. That’s a huge gap, and it will mean that a higher percentage of the lentil crop will be switched to green this year.
The situation is similar in peas where yellow is the dominant class and has seen the greatest price erosion. Yellow peas are currently in the $6.75 a bushel range with some new crop price contracts at an undesirable $6.
By comparison, green peas are currently in the $8 a bu. range with new crop contracts $1 per bu. higher than what is available on yellows. That premium will encourage a few more green peas as well as some specialty peas.
Most analysts are calling for an increase in durum acreage, and that’s probably correct. How quickly producers have forgotten the 2016 fusarium disaster in durum. With lentil and pea area declining, those acres have to go somewhere.
Barley acreage will be up, according to the predictions of most analysts, but that’s on the strength of feed barley prices rather than malting. With so much high quality barley available, malting barley scarcely commands any premium to feed, assuming you’re lucky enough to even have someone who will buy your barley as malting.
One marketing lesson has come out loud and clear since harvest — sometimes you should jump on attractive new crop contract prices very early. Mustard and kabuli chickpeas are two prime examples. The best 2018 contract prices were available last fall. Producers who acted on those opportunities are now glad they did.
