November 9, 2007

Canada 2007 all-wheat crop down 18 percent on-year; corn up by 17 percent

A wet spring and then a drought at the end of July severely impacted wheat production in Canada, reducing all-wheat production 18 percent in 2007 compared to 2006 levels, according to a US Department of Agriculture attache report posted Wednesday (November 7) on the Foreign Agricultural Services Web site.

The Prairie Provinces have had to contend with a wet spring and then were hit with drought like conditions at the end of the growing season. The former had negative impact on wheat planting decisions and the latter on wheat yields. A 10 percent decrease from 2006 levels in area seeded to wheat due to a wet spring, and then an estimated 8.7 percent drop in yield levels from crop year 2006 yield levels have resulted in 2007 production levels for all wheat being estimated at 20.6 million tonnes. This represents an 18.5 percent drop compared to 2006 levels. Domestic usage will compete with exports, as increased usage for ethanol will have to compete with supplying a world market with historically high wheat prices resulting from low world supplies.

Despite a 27 percent increase in area seeded to durum wheat, lower yields due dry hot weather in the major durum growing area has resulted in an increase in production levels of only 8 percent above 2006 levels. Production of durum wheat is estimated to be 3.6 million tonnes. Exports and carry-out stocks will also be reduced in the coming marketing year.

Increased seeding to barley resulted in increased barley production in 2007. Statistics Canada estimates barley production at 11.8 million tonnes, up from 9.6 million tonnes in 2006. Strong world demand for feed barley (due to tighter than expected world supplies) is expected to drive an increase in exports.

The decrease in average yield from 2006 levels for corn is attributed to the hot and dry conditions in July. Higher seeded areas however, helped offset these drops in yield. Corn for grain had lower than anticipated yields, offsetting the 26.9 percent increase in area seeded from 2006 levels. Despite this, corn production is estimated to be 10.6 million tonnes, a 17 percent increase from 9 million tonnes in 2006. Grain corn production has reached record highs in both Ontario and Quebec. Much of this increase in production is driven by the need to supply the burgeoning corn-based ethanol industry in Quebec and Ontario.