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December 8, 2011

 

Canada's bumper wheat, rapeseed crop may affect prices
 

 

Aided by a hot, sunny summer, Canadian farmers grew more wheat and produced a record amount of rapeseed this year, but that will not mean good things for prices, one analyst says.

 

The amount of wheat produced in Canada this season jumped by 9% over the year before, while rapeseed rose by almost 11% to 14 million tonnes, according to Statistics Canada.

 

Alberta produced 5.3 million tonnes of rapeseed, the agency reported, with both a record number of acres harvested and a record yield. The province also saw record yields of 49.1 bushels per acre for wheat, StatsCan said.

 

Errol Anderson, of ProMarket Communications, said while prices were strong this summer, good yields across the globe means there will be less demand for Canadian rapeseed and wheat and the prices will start falling. For example, Australia is estimating a record 28.3-million-tonne wheat harvest this year.

 

The bright spot is barley, Anderson said. While production rose by about 2% this year over last - after falling 20% between 2009 and 2010 - he expects "barley supplies come spring will be quite snug."

 

Flax yields dropped by almost 13%, but Anderson said there is little demand for the crop, as the credit crunch in Europe affects demand.

 

StatsCan said Canadian farmers reported a decline in corn and soy crops, while Anderson pointed out China had record corn production this year.

 

The strong production across the Prairies came despite a wet, late spring in some areas. Hot, sunny weather helped mature crops, StatsCan said, although not in Manitoba, which was hardest hit by flooding.

 

StatsCan surveyed about 28,600 farmers between October 24 and November 10 and gathered estimated area, yields and production.

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