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Canada farmers plant less spring wheat, switch to canola and durum
Jan. 27, 2016
Canada's farmers will pull back on spring wheat sowings this year, switching to alternative crops offering better returns, officials said, pegging canola area at the second highest on record, and durum area at an eight-year high.
Canada's farm ministry, AAFC, in its first forecasts for domestic crops for this year's harvest, said that sowings of spring wheat - excluding the durum wheat used in making pasta - would fall by some 2% this year from the 6.88m hectares sown in 2015.
The decline, which implies a drop in area to a five-year low, reflects soft farmgate prices for spring wheat, compared with more buoyant values of other crops.
In the Prairies, responsible for the vast majority of Canada's grains output, "spring wheat has competition from durum, oilseeds and pulses which is expected to limit the [spring wheat] seeded area", AAFC said.
'Significant price premium'
Durum seedings - supported last year by relatively high global prices following a succession of disappointing 2014 harvests, including in Canada - will nudge higher still, by 45,000 hectares to 2.40m hectares, the highest since 2008.
AAFC flagged "relatively high [durum] prices in 2015-16, and a significant price premium to hard red spring wheat".
For canola, of which Canada is the top exporter, sowings will rise by more than 300,000 hectares to 8.44m hectares, an area second only to that in 2012.
"Seeded area for canola is forecast to increase by 4%... on attractive returns compared to other field crops," the ministry said, estimating Vancouver prices averaging Can$495-525 a tonne for last year's harvest, an improvement on the Can$489 a tonne for the 2014 crop.
For lentils - for which Canadian growers are expected to see an increase of up to 71% in prices for their crop, reflecting the boost to the market from poor production in key consumer India - this year's sowings are expected to rise by more than 200,000 hectares to 1.80m hectares.
"Area seeded [in 2016] in Canada is expected to rise 13%... due to record prices the previous year and expectations for strong export demand."
Export prospects
Nonetheless, Canada forecast its wheat production rising this year - even factoring out expectations of an increase in durum output - thanks to expectations of a recovery in yields, besides an increased contribution from the country's relatively small winter wheat crop.
Production of non-durum wheat "is forecast to increase by 5% to 23.3m tonnes because of higher yields", AAFC wheat analyst Stan Skrypetz said.
Nonetheless, Canada's exports of non-durum wheat will fall to a three-year low of 16.0m tonnes in 2016-17, to ensure sufficient supplies to meet the country's own needs.
Durum exports will rise by 500,000 tonnes to 4.8m tonnes.
Source: Agrimoney
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