Increasing global production and record U.S. corn and soybean yields in 2016 have led to growing stocks and lower prices, especially for coarse grains. What does this mean for seeded acreage and what should Canadian farmers expect in 2017? Last week I provided an overview of planting and farm input decisions for grain and oilseed producers in Eastern Canada. This week I provide the assessment for Western Canada.
The from the Saskatchewan Ministry of Agriculture indicate lentils, durum and canola remain top crop choices in terms of profitability for 2017. Despite strong projected margins for lentils and durum, Agriculture and Agri-food Canada (AAFC)’s most recent suggest acreage could decrease in 2017.
Historically speaking, lentil prices remain very attractive and acreage will still be above the five-year average. However, producers are expected to reduce their lentil acreage in 2017 for a couple of reasons: last year’s record acreage and subsequent production problems and a potentially large pulse crop expected in India next month.
Despite a strong profit margin estimate for durum, acreage is projected to decline in 2017 due to quality issues associated with the 2016 crop, coupled with large global stocks. Large Canadian stocks of durum are expected at the end of the marketing year with most of it being of feed quality. As such high quality durum seed will be in short supply.
Canola remains a profitable crop for 2017 as with strong demand for soybeans and palm oil in global markets supporting the demand for canola. Domestically, canola is being supported by a robust crush and export pace which are expected to hold year-end stocks at or below 2 million metric tonnes. As a result, AAFC’s projection of a 3% increase in canola acres seems likely to materialize.
As soybeans are a favourite worldwide crop for 2017, expect acreage to increase again on the Prairies. Soybean acres continue to move westward: Western Canadian acres were 1.9 million in 2016, an increase of 260% since 2010.
AAFC is forecasting Canadian oat acres to increase 7% in 2017, a projection consistent with the profit margin projected for the crop in 2017. Anticipated oat acres in the United States are expected to decline in 2017. Spring wheat acres are projected to increase 6% in 2017, driven by high quality varieties with high yields and from reduced winter wheat acres.
Pea acreage is projected to decrease slightly from last year’s record acreage as profit margins become tighter but remain positive.
According to Alberta Agriculture and Forestry farm , farm input prices declined 2% on average in 2016 compared to 2015 in Western Canada. Fertilizer prices declined on average 10% in 2016 compared to 2015 driven by a decline in natural gas prices. Overall, Western Canadian farm input prices in 2017 are expected to remain fairly stable despite a slight upward trend in energy prices.