CANADA
Stakes are high for farmers as 2022 crop shapes up to be most expensive in history
The Canadian Press
CALGARY — The stakes are high as Canadian farmers take to the fields to plant 2022's crop, which some are saying could find a place in the record books as "the most expensive ever."
On her family's farm northeast of Calgary near Acme, Alta., where she farms with her husband Matt, Tara Sawyer already knows she's going to need a better-than-average crop this year just to break even.
All of her input costs have surged since last year due to inflationary pressures, spiking energy costs, and the war in Ukraine. The price of fertilizer is more than double what it was last year, and the diesel used to power her farm equipment also costs nearly twice what it did last year at this time.
But getting that above average crop could be a challenge. Last year, Sawyer's farm was hit hard by the widespread drought that reduced crop yields across Western Canada and there are fears already that this could be another dry year.
"Most farmers, including us, saw a 30 per cent reduction in our yields, so we need to be able to have really good yields come out this year in order to pay for that," she said. "But in our region, we're already horribly dry, so we're concerned."
But it's not all bad news. While the cost of everything from seed to herbicides to tractor tires has increased in 2022, so too have crop prices. Sawyer, for example, grows wheat, barley and canola — all of which are hot commodities right now due to supply pressures created by the Russia-Ukraine war and the aftermath of last year's drought.
“There’s a number of crops that are sitting at all-time highs, or near all-time highs," said Jon Driedger, of Manitoba-based LeftField Commodity Research. "If you go back two years, the price of canola has doubled, almost tripled. Wheat's higher than it's been in 20 years, corn's pushing up against a record high. It's really across the board."
In fact, Driedger said crop prices are high enough that any farmer able to produce a "normal-sized" yield should still be able to earn a sizable profit. But in addition to the dry conditions in Alberta, many farmers in Manitoba and eastern Saskatchewan have the opposite problem and haven't even been able to get onto the land yet due to flooding and excess moisture.
The acres seeded by Canadian farmers this spring will not only be the most expensive in history, but in some ways, the riskiest as well, Driedger said.
“For those farms that are fortunate enough to harvest a normal crop or even better, it could be a great year. But there’ll be a lot of farms for whom that’s looking awfully precarious right now.”
Cornie Thiessen — general manager of ADAMA Canada, a Winnipeg-based company that sells crop protection products like fungicides, herbicides and insecticides — said some of these inputs have become significantly more expensive and harder to find due to supply-side factors like COVID-driven disruptions at manufacturing plants and shipping delays. But he added the war in Ukraine is also increasing demand for these products, as farmers get the message that this year, their work is more vital than ever.
“Very high crop prices change the economics for farmers of how much they invest to protect the crop," Thiessen said. "With really high prices like we're seeing right now, it sends a message to farmers that the world really needs your crop so you need to make it as big as possible. You need to spend more on fertilizer and herbicides to maximize those yields."
Thiessen said 2022 will likely be the most expensive crop ever planted in Canada, and there's a lot riding on it.
"For the individual farmer, certainly there is an opportunity to take advantage of these high prices, but it's a bigger investment than before," he said. "If the weather works against them and they have a poor crop, that's where the downside risk comes in."
"And for the world, to help alleviate concerns about food security, we really do need Canada to produce a great crop this year," Thiessen added. "If Canada's crop isn't as strong as possible this year, it will further exacerbate concerns about food security."
This report by The Canadian Press was first published May 20, 2022.
Amanda Stephenson, The Canadian Press
Weather conditions continue to affect agriculture industry in Saskatchewan
From rain to snow to nothing at all, Saskatchewan weather is leaving many farmers wondering if they will be able to seed at all this season.
© Global News
It truly is a tale of two worlds. East Saskatchewan has too much moisture in its soil while the west is hoping to get even one rainy day. It's a challenge farmer Clinton Monchuk understands firsthand having farmland near the Lanigan area.
"We've probably had a little over three inches of rain since the beginning of May," Monchuk said. "So it is a little bit wetter and we're just having a little bit more of a tough time getting seeding done."
It's a reality faced by farmers across the province. On average, more than half of the seeding process is complete by this time. But, this year it's a different story.
Ian Boxall, president of the Agriculture Producers Association of Saskatchewan. has farmland near Tisdale.
"It's raining here today and it snowed this morning," Boxall said. "We're way far behind. Normally we would start seeding on May 1 and now I haven't started and it's the 19th of May so we are behind.
"I am not panicking yet but if it doesn't straighten up soon, I am going to start to panic."
According to Boxall, the seeding deadline is June 20. He says for producers in the west of the province with no moisture to be found on their land, it's a deadline they may not meet.
"Once it warms up we'll have a good crop started and out of the ground," said Boxall. "But those guys in the west, they really need rain to get that germinated and get that crop going over there so my concern is with them."
But seeding is not farmers' only concern. For Monchuk, it's the cost to farm. With inflation continuing to rise it's becoming more and more expensive to get their products out to the public.
"We know as we move forward food inflation is going to get higher," said Monchuk. "We are seeing some of those shortages so this is some of the reasons, some of the extra cost that we have now. It does filter down and will result in higher prices of food as we move forward."
From rain to snow to nothing at all, Saskatchewan weather is leaving many farmers wondering if they will be able to seed at all this season.
© Global News
Many fields in the eastern half of the province are still too wet to allow producers to seed, however some areas are desperate for rain, which brings mixed emotions from farmers across the province.
Kayla Guerrette - Yesterday
Global News
Global News
It truly is a tale of two worlds. East Saskatchewan has too much moisture in its soil while the west is hoping to get even one rainy day. It's a challenge farmer Clinton Monchuk understands firsthand having farmland near the Lanigan area.
"We've probably had a little over three inches of rain since the beginning of May," Monchuk said. "So it is a little bit wetter and we're just having a little bit more of a tough time getting seeding done."
Read more:
It's a reality faced by farmers across the province. On average, more than half of the seeding process is complete by this time. But, this year it's a different story.
Ian Boxall, president of the Agriculture Producers Association of Saskatchewan. has farmland near Tisdale.
"It's raining here today and it snowed this morning," Boxall said. "We're way far behind. Normally we would start seeding on May 1 and now I haven't started and it's the 19th of May so we are behind.
"I am not panicking yet but if it doesn't straighten up soon, I am going to start to panic."
According to Boxall, the seeding deadline is June 20. He says for producers in the west of the province with no moisture to be found on their land, it's a deadline they may not meet.
"Once it warms up we'll have a good crop started and out of the ground," said Boxall. "But those guys in the west, they really need rain to get that germinated and get that crop going over there so my concern is with them."
But seeding is not farmers' only concern. For Monchuk, it's the cost to farm. With inflation continuing to rise it's becoming more and more expensive to get their products out to the public.
Read more:
‘Very stressful’: Cold weather delays crops for many B.C. farmers, but no relief in sight
"We know as we move forward food inflation is going to get higher," said Monchuk. "We are seeing some of those shortages so this is some of the reasons, some of the extra cost that we have now. It does filter down and will result in higher prices of food as we move forward."
Video: Sticker Shock: Navigating the increasing food costs
CN Railway braces for surge in grain shipments as optimism grows for harvest
Jake Edmiston - Yesterday
Financial Post
© Provided by Financial PostAfter a tough year in Canadian agriculture, CN Rail believes farmers will see a better crop this year.
Canada’s largest railroad is bracing for a surge in grain shipments across the country this year — a sign of hope that this year’s harvest will be better than the last one, when extreme drought devastated crops across the Prairies.
“Every kernel that’s harvested this year is going to want to move,” Canadian National Railway Co.’s new CEO Tracy Robinson told the Bank of America’s transportation conference on May 17. “We need to be ready for that.”
After a tough year in Canadian agriculture, CN believes things are starting to look up, judging from soil moisture levels this spring that suggest a more normal grain crop is coming.
“It would be a good thing for the world, wouldn’t it?” Robinson said. “A lot has to happen right from here. But I think we’re starting out in a positive way.”
The shot of optimism comes as the world faces a food crisis driven in large part by Russia’s invasion of Ukraine. The conflict has destabilized one of the most important regions in the world for grain exports, causing major spikes in commodity prices that have contributed to a troubling burst of inflation. Prices are likely to stay high for months due to global supply issues, the United Nations’ Food and Agriculture Organization warned last week.
© Dave BishopA farmer plants durum wheat in a field on his farm by Barons, Alta.
And no matter how good Canada’s crop turns out to be, it won’t be enough to alleviate those issues on its own. The country’s agricultural output — even with a bumper crop — isn’t large enough to make a major impact on global supply, according to Ted Bilyea, a former executive at Maple Leaf Foods Inc. who is now a distinguished fellow at the Canadian Agri-food Policy Institute.
“I don’t think I see it moving the needle much,” Bilyea said. “We need a good crop just to keep things going where they are. … We’ve got to hope that the rest of the world has a good crop.”
Richard Grey, an agricultural economist at the University of Saskatchewan who helps his son run a family farm in Indian Head, Sask., was checking prices for canola on May 18. He could lock in a contract at about $24 a bushel, to be harvested and delivered to a shipper in November.
“That’s double what it was last year,” Grey said, adding that higher gasoline prices are driving up demand for ethanol and biofuel, which in turn drives up prices for grain and oilseeds, such as canola. “This is all to do with the international situation.”
Statistics Canada reported May 18 that food inflation is accelerating at a pace not seen since 1981. The consumer price index found grocery bills in April shot up 9.7 per cent compared to last year, with bread up 12.2 per cent, cereal up 15 per cent, pasta up 19.6 per cent, and cooking oil up 28.6 per cent.
“High inflation is here to stay in 2022,” Bank of Nova Scotia analyst Patricia Baker wrote in a note to investors. “Supply constraints and geopolitical conflict are expected to impact the energy, agriculture, and commodity markets.”
While Canada’s crop is expected to be better than last year, it’s not guaranteed to be good. In the middle of the spring planting season, farmers in Manitoba and southeastern Saskatchewan are facing fields so wet that they’re struggling to get seed in the ground. In southern Alberta, however, it’s too dry.
“Those that are saying we’re poised to have at least an average crop wouldn’t be out of line,” said Tom Steve, general manager with the Alberta Wheat and Barley Commissions. “To say that it’s going to be what we call a bumper crop, that’s pretty early to be saying that.”
CN’s chief executive agreed. “Now listen, I come from a farm in Saskatchewan,” she told the Bank of America conference. “And my father likes to say to me, `You’d like to get really excited about the grain crop, but so far we’ve never harvested one before we’ve seeded it.'”
Still, CN is preparing for an “inevitable surge” in grain shipments in the latter part of the year, investing in high-capacity hopper cars that can carry 10 per cent more grain, Robinson said. The railway confirmed it has added 3,000 hopper cars since 2019, with another 1,250 expected between 2023 and 2024.
“Getting this running is not just about the railroad getting ready,” Robinson said. “We need our partners, the terminals, and we need our customer facilities to be (ready) … We’re optimistic, for all of our sake, that this happens.”
Jake Edmiston - Yesterday
Financial Post
© Provided by Financial PostAfter a tough year in Canadian agriculture, CN Rail believes farmers will see a better crop this year.
Canada’s largest railroad is bracing for a surge in grain shipments across the country this year — a sign of hope that this year’s harvest will be better than the last one, when extreme drought devastated crops across the Prairies.
“Every kernel that’s harvested this year is going to want to move,” Canadian National Railway Co.’s new CEO Tracy Robinson told the Bank of America’s transportation conference on May 17. “We need to be ready for that.”
After a tough year in Canadian agriculture, CN believes things are starting to look up, judging from soil moisture levels this spring that suggest a more normal grain crop is coming.
“It would be a good thing for the world, wouldn’t it?” Robinson said. “A lot has to happen right from here. But I think we’re starting out in a positive way.”
The shot of optimism comes as the world faces a food crisis driven in large part by Russia’s invasion of Ukraine. The conflict has destabilized one of the most important regions in the world for grain exports, causing major spikes in commodity prices that have contributed to a troubling burst of inflation. Prices are likely to stay high for months due to global supply issues, the United Nations’ Food and Agriculture Organization warned last week.
© Dave BishopA farmer plants durum wheat in a field on his farm by Barons, Alta.
And no matter how good Canada’s crop turns out to be, it won’t be enough to alleviate those issues on its own. The country’s agricultural output — even with a bumper crop — isn’t large enough to make a major impact on global supply, according to Ted Bilyea, a former executive at Maple Leaf Foods Inc. who is now a distinguished fellow at the Canadian Agri-food Policy Institute.
“I don’t think I see it moving the needle much,” Bilyea said. “We need a good crop just to keep things going where they are. … We’ve got to hope that the rest of the world has a good crop.”
Richard Grey, an agricultural economist at the University of Saskatchewan who helps his son run a family farm in Indian Head, Sask., was checking prices for canola on May 18. He could lock in a contract at about $24 a bushel, to be harvested and delivered to a shipper in November.
“That’s double what it was last year,” Grey said, adding that higher gasoline prices are driving up demand for ethanol and biofuel, which in turn drives up prices for grain and oilseeds, such as canola. “This is all to do with the international situation.”
Statistics Canada reported May 18 that food inflation is accelerating at a pace not seen since 1981. The consumer price index found grocery bills in April shot up 9.7 per cent compared to last year, with bread up 12.2 per cent, cereal up 15 per cent, pasta up 19.6 per cent, and cooking oil up 28.6 per cent.
“High inflation is here to stay in 2022,” Bank of Nova Scotia analyst Patricia Baker wrote in a note to investors. “Supply constraints and geopolitical conflict are expected to impact the energy, agriculture, and commodity markets.”
While Canada’s crop is expected to be better than last year, it’s not guaranteed to be good. In the middle of the spring planting season, farmers in Manitoba and southeastern Saskatchewan are facing fields so wet that they’re struggling to get seed in the ground. In southern Alberta, however, it’s too dry.
“Those that are saying we’re poised to have at least an average crop wouldn’t be out of line,” said Tom Steve, general manager with the Alberta Wheat and Barley Commissions. “To say that it’s going to be what we call a bumper crop, that’s pretty early to be saying that.”
CN’s chief executive agreed. “Now listen, I come from a farm in Saskatchewan,” she told the Bank of America conference. “And my father likes to say to me, `You’d like to get really excited about the grain crop, but so far we’ve never harvested one before we’ve seeded it.'”
Still, CN is preparing for an “inevitable surge” in grain shipments in the latter part of the year, investing in high-capacity hopper cars that can carry 10 per cent more grain, Robinson said. The railway confirmed it has added 3,000 hopper cars since 2019, with another 1,250 expected between 2023 and 2024.
“Getting this running is not just about the railroad getting ready,” Robinson said. “We need our partners, the terminals, and we need our customer facilities to be (ready) … We’re optimistic, for all of our sake, that this happens.”
The grain industry has been at odds with the railways this year, with grain companies complaining that CN and Canadian Pacific Railway Ltd. haven’t been able to meet demand for railcars despite a 30-per-cent drop in crop yields due to last summer’s drought. The railroads counter that they have been facing challenges since late last year, when massive floods in British Columbia washed out rail lines and then extreme cold forced trains to slow down.
“Their performance has been absolutely abysmal this past crop year,” said Steve at the Alberta Wheat and Barley Commissions. “It was just horrible. They couldn’t move the crop that we had. So they’re telling their investors and shareholders that they’re going to do better? We’ll believe it when we see it.”
• Email: jedmiston@nationalpost.com | Twitter: jakeedmiston
“Their performance has been absolutely abysmal this past crop year,” said Steve at the Alberta Wheat and Barley Commissions. “It was just horrible. They couldn’t move the crop that we had. So they’re telling their investors and shareholders that they’re going to do better? We’ll believe it when we see it.”
• Email: jedmiston@nationalpost.com | Twitter: jakeedmiston
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