So far it looks like western farmers are sticking to their rotations and not jumping out of canola this spring, despite losing their top market, China.
“Farmers are locked and loaded and sticking to it,” Canadian Canola Growers Association CEO Rick White said in an interview April 4.
“Yes, some have been pushing their rotations. There may be some slight adjustment, last minute, but I think the main driver will be their current rotation, what spring seeding moisture looks like, if they can get canola in early. If the environment is right I believe they will not veer off their rotation much or their seeding plans.”
Seed grower and retailer Simon Ellis of Ellis Seeds at Wawanesa agrees.
“We’re getting the odd phone call asking about different crops and options, but nobody has pulled the trigger on it yet,” he said in an interview April 5.
“Between optimism and sticking to a good rotation, it is probably going to keep people fixed to their canola acres, or at least for now.”
Farmers thinking of switching, canola or not, should contact their seed retailer right away, Ellis stressed.
Barley, flax and oat seed supplies are tighter than usual, he said. Poor crops in some areas last year hurt germination. Production has also declined because of reduced demand.
Ellis suspects interest in the three crops is up following dry growing conditions last year, which reduced yields for crops such as soybeans.
Barley is also a crop farmers can feed to cattle should dry weather reduce pasture and hay production, he said.
Policies around returning seed vary with the retailer, Ellis said.
“I think most retailers would likely take it back, especially if the customer would be willing to purchase a different product in its place,” he said. “Sometimes they’ve brought it in and they won’t be able to return it to the main company so then it’s a matter of working with your retail to find the best outcome.”
BASF and Bayer say returning seed rests with retailers.
“We bring back all of our seed at the end of the year,” Brent Collins, BASF’s North American seeds marketing manager said in an interview April 5. “We try to manage our inventory. We don’t put product out unless there are orders for it.
“I suspect in most cases they’ll (retailers) take that seed back because they’ll want to maintain a relationship with the grower, but as I said we’re one step back from that.”
Bayer Canada has a similar policy, its public and industry affairs director Trish Jordan wrote in an email.
“The distributors are permitted to return product which has not been sold and they receive full credit for the returns,” she wrote. “Our experience is that every dealer/distributor is going to allow for returns as per usual with no penalty and reasonable date restrictions.”
Neither BASF nor Bayer are hearing from suppliers that farmers want to cancel their canola seed orders.
Seeding weather is usually the biggest factor on canola seed sales, Collins said.
“For 2019 I think growers are pretty established in what they are growing. Now 2020 might be a different story if they can’t sell the canola that’s in their bin. That’s a different discussion.”
Last week Richardson International president and CEO Curt Vossen said Canadian canola plantings could drop five to 10 per cent this year.
Manitoba Canola Growers Association president Chuck Fossay told the Keystone Agricultural Producers meeting here April 2 he doesn’t think Manitoba farmers will cut canola plantings, but said based on “hearsay” Alberta and Saskatchewan farmers might. Some farmers who have been pushing canola rotations could plant less this spring, he said.
Meanwhile, grain companies are honouring their contracts to buy canola, he said.
“They are continuing to buy canola and they are continuing to contract for next year,” Fossay said. “That’s all good news I think. The basis might be widening but that’s a normal part of marketing. When things are uncertain basis levels will widen out.”