What’s the price tag to the crops sector from this record rainfall spring? Great question, but it’s very difficult to answer.
Flooding damage to homes, businesses and roads will gradually be assessed with a high degree of accuracy. Replacement values can be estimated. You can’t simply rebuild a crop that’s been lost.
Now that the Saskatchewan Crop Insurance seeding deadlines have expired, it appears that about one-quarter of the acres will not see a seeder this year. Although it will take a while to determine with precision, it’s probably around eight million acres.
Those acres will need weed control, but very little will be invested as compared to seeded land. Inputs costs range widely depending upon the kind of crop and the amount of fertilizer applied, but in most cases there will be over $100 an acre in input costs that won’t be spent.
That adds up to over $800 million that won’t flow from farmers through the farm retail system.
It should be noted that in some cases, inputs like fertilizer and herbicides were applied to land that subsequently became too wet. In other cases, producers have fertilizer, seed and other inputs that were purchased in anticipation of seeding.
One of the special problems this spring involves the spring cash advance. If you took a spring cash advance and you weren’t able to seed the acres outlined, the outstanding advance comes due 30 days after the submission of the seeded-acreage report.
Trouble is you may have already spent the money. Inoculants have no value after their season of use and fuel can’t be returned. Fertilizer can also be a problem to return, especially blended fertilizer. Producers have been returning seed when possible, but it’s sometimes subject to significant restocking charges.
Of course, there will be no grain sales from unseeded land. Most of this land is in the higher-production regions of the province where a typical wheat crop should gross over $150 an acre, with canola at $300 or over. This varies widely from one area to another and one producer to another.
Using a conservative average of $200 an acre means $1.6 billion in gross revenue that will not be flowing.
Producers will get a bit of money from the Unseeded Acreage Payment of Saskatchewan Crop Insurance. While promoted as being $50 an acre, it more typically equates to around $35 an acre on most farms.
On top of that, about 30 per cent of the acreage isn’t enrolled in crop insurance and won’t be eligible. As a rough estimate, the Unseeded Acreage Payment may return about $200 million to producers.
It’s much more difficult to get a handle on flooded acres. How long will the water sit and how well will the crop recover after sitting in saturated ground?
In more normal years, a few flooded acres can often be a good omen. It means superior production on the acres that weren’t flooded.
This year, flooding is widespread and the lack of moisture is not a limiting factor to production. Flooded land is going to be a big price tag.
This isn’t necessarily a loss for which producers will receive compensation, even if they have crop insurance. The yield from flooded acres gets averaged with other land of the same crop type.
An even bigger intangible is the seeding delay and the lack of heat units.
When you add it all up, the never-ending spring rains have washed away a lot of money.
Kevin Hursh is a consulting agrologist and farmer based in Saskatoon. He can be reached at [email protected]