CNS Canada –– Corn prices across the Prairies have broken out of their long-held range, which should put cash in producers’ pockets, but it may not be enough to significantly increase seeding plans this spring.
For much of 2017 and the early portion of 2018, corn prices in Western Canada were hanging around the $4-$4.30 per bushel range.
A few weeks ago prices started to climb and recently hit the $4.50-$4.80 range.
According to Myron Krahn, a director with the Manitoba Corn Growers Association, last week’s planning intentions report from the U.S. Department of Agriculture helped solidify the spike.
“The report talked about a lower corn crop than the market was expecting,” he explained. USDA pegged this year’s corn crop in the U.S. at 89.3 million acres, 2.2 million fewer than the year before.
By comparison, western Canadian farmers seeded 470,000 acres of corn in 2017, according to Statistics Canada. The agency is scheduled to release its first estimates for 2018 on April 27.
The price increase means farmers may start to make some profits, rather than just breaking even, Krahn said.
“We’ve come up 30 to 50 cents which doesn’t sound like a lot but we’re working with such tight margins to begin with.”
That’s a spot price, Krahn noted, so it may not be enough of a catalyst on its own to increase this year’s acreage.
If the increase ever spread to the futures market though, he says more farmers could decide to plant corn. As well, seeding problems in the U.S. could sway producers’ minds.
Manitoba corn is still heading to southern Alberta, he added, but shipments are slowing down due to rail backlogs.
“Now it’s going by truck, which is more costly and less efficient. That almost put the lid on the idea of shipping corn to the west.”
The rest is mostly being sold at home with little, if any, going to the U.S.
Going forward, Krahn said he’d like to see some warmer weather and rain.
According to an agronomist with the Manitoba Corn Growers Association, cold temperatures in March may have actually helped cut down on the potential for pest problems this spring.
“The mix of dry and cold may have killed (cutworm) larvae in the soil,” said Morgan Cott. “They are the biggest concern in the first month.”
Farmers will likely be planting in fairly dry conditions this spring, she said, but traditionally May has seen timely showers help get things started.
— Dave Sims writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting. Follow CNS Canada at @CNSCanada on Twitter.