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Farmers Respond to Fluctuating Prices

Data provided by Statistics Canada compares seeded area by acreage from 2015-2018 along with predictions for 2019. While no changes to overall totals are predicted between 2018 and 2019, fluctuations among specific seeds offers an insight into the speculation of Canadian farmers. In their analysis of the data, Statistics Canada states that the “planting intentions may have been influenced by ongoing issues, including lower prices for some crops as a result of global supply, tariffs and decreased foreign demand due to ongoing trade issues.”

According to the data; Statistic’s Canada predicts there will be a decrease in canola, lentil, and soybean seeds planted over the coming year while wheat, barley, peas and flax are projected to increase. Furthermore, interesting conclusions can be reached when extrapolating the data further as summarized by GrainCentral.com: “…all wheat planting intentions were pegged at 10.4 million hectares (Mh). However, there were significant changes among wheat types, with the durum area expected to see its biggest single-year drop since 2010, falling 19pc to 2.03Mh. Conversely, the spring wheat area is predicted to increase by 12pc to 7.85Mh, the highest in 18 years … The area intended to be sown to barley came in at 2.76Mh, and the soybean area is projected to be down significantly from 2.55Mh to 2.3Mh. The latter is primarily due to poor yield results and lack of suitability compared to alternatives.”

Meanwhile, the forecasted reduction in acreage for canola seeds could be related to the current state of Canadian canola as the future of Chinese imports for the seed remains a question mark. Statistic Canada reports a likely 6.6% reduction in expected seeded acreage for 2019 as farmers are left to hypothesize about canola prospects. From Statistics Canada’s Principal field crop areas, March 2019: “record high year-end stocks for the 2018 calendar year, coupled with concerns regarding limited access to China’s canola market, possibly affected anticipated seeding area. These factors have contributed to lower than average prices, which may have some farmers considering seeding fewer acres of canola or other crops. However, resolution of trade concerns or increased canola prices could alter final seeding decisions.” Whether trade, global supply, or tariff related – it is clear that Canadian growers have altered their planting intentions for 2019 including a decrease in oil seeds.