March 25, 2008 

 

Rapeseed and wheat gaining favour among Canadian farmers

 

 

Rapeseed and wheat appear poised to gain acres in Canada for the 2008-09 (August/July) crop year while barley and oat acres are expected to decline according to industry sources.

 

Fertilizer prices, rotation concerns, economics and familiarity will be the factors at the forefront of producers' minds as they finalize their seeding decisions.

 

"To me certainly wheat looks attractive. Given the opportunities in fixed wheat contracts, if growers can lock in at CAN$10.00 per bushel, that is fantastic," said Mike Jubinville, farm analyst with ProFarmer Canada. "Rapeseed also looks very optimistic."

 

Doon Pauly, crop specialist with Alberta Agriculture Crop Information Centre, offered a similar forecast.

 

In Alberta, the extra land will come at the expense of acreage normally used for perennial forage rather than from traditional row crops, Pauly said.

 

"We received a lot of calls in the fall and spring about people terminating forage stands. We're going to see more annual crop acres in Alberta than we've seen in recent years. Any increase in land is not really going to be at the expense of crops other than the perennial grasses," he said.

 

Meanwhile, Pauly believes barley acreage may decline because its price is lagging behind other crop options. He said if farmers have the choice between C$4.00-per-bushel barley and C$12.00-per-bushel rapeseed, it is obvious which crop they will decide to seed. He added, however, that barley will continue to be grown as a rotation crop in 2008-09 and that there is still money to be made with barley, a far cry from the situation even just a couple of years ago.

 

Pauly said he does not think input costs such as fertilizers will deter farmers.

 

"It's quite a bit different than two years ago in the spring when fertilizer prices were really high and commodity prices were still low. We're in a drastically different situation now in terms of crop prices. It would have to take a significantly lower average yield situation coupled with traditionally high fertilizer use to pencil out losses. So yes, fertilizer prices are high but crop values will really make up for that," he said. said Dale Risula, crop specialist with Saskatchewan Agriculture, commenting on Canada's crop situation.

 

Plans of Canadian farmers will likely be finalized by the end of March or the middle of April at the latest. One reason, Risula said, is that many crop-insurance programmes have a March 31 deadline.

 

Another reason is that in many cases, products such as fertilizer and seed must be ordered months ahead of time.

 

"The best rapeseed varieties have probably been sold out since around December," Pauly said. "There are a lot of solid rapeseed varieties out there, but I suspect the hybrids have been long sold out. So, as far as that decision is concerned, it's long past."

 

Despite all of the talk this year about the intensity of the 2008-09 crop battle, Jubinville said that in reality maybe only 15 percent of crop decisions are "swing decisions," based solely on considerations of what product will give producers that best rate of return. The majority of decisions are based on agronomics.

 

Jubinville said he thinks rapeseed acres may be limited by the need to rotate it out this spring.

 

Jubinville noted that in some places in Alberta, rotations have already been pushed to the limits for rapeseed, so a 500,000-acre gain would be a realistic figure.

 

Pauly said while that may be true for some areas, he emphasized that not every Alberta farmer had pushed rapeseed rotations to their limits.

 

In the end, crop familiarity is also likely to play in producer decisions for the 2008-09 crop year, Jubinville said.

 

"You can grow yellow mustard. That is a big money maker, but there are not too many growers who are going to do that, they're just not. In situations like this, it often comes down to grow what you know. And farmers know wheat and rapeseed." Doon Pauly, crop specialist with Alberta Agriculture Crop Information Centre.

 

	Area seeded 08/09 Forecast ( million acres)	Area seeded 07/08 Actual ( Million acres)	Percentage change
Rapeseed	14.887	14.725	1.1 percent
All wheat	24.215	21.867	11 percent
Barley	10.921	10.864	0.8 percent
Oats	4.991	5.407	-7.7 percent
Source: Agriculture and Agri-Food Canada, March 6, 2008