The Canadian Wheat Board (CWB) and most farmers are hoping last year’s miraculous crop recovery happens again.
“It is my hope for all farmers that somehow we have a repeat of last year’s harvest and in the end wind up with a much better result than we all expect,” CWB chair Allen Oberg told reporters July 30 during the CWB’s annual crop year-end news conference.
A year ago, a warm September saved a late crop and helped produce a bumper harvest, including 24.3 million tonnes of wheat. But at least that crop was in the ground.
This past spring excessive rains prevented farmers from seeding 10.5 million acres, including 734,000 in Manitoba. Meanwhile, millions more acres of crop are suffering the effects of those heavy rains.
There are glimmers of hope. Some crops, especially in the southern Prairies, have been improving. While the CWB has reduced its 2010-11 “all-wheat” production estimate since June to 18.5 million tonnes, down 3.4 million from the 10-year average, it has raised the projected average yield to 38 bushels an acre.
Much of northern and central Saskatchewan received record or above-average rainfall between April 1 and July 25, as did parts of Manitoba’s Interlake and northwest. CWB weather and crop analyst Stuart McMillan said crops in those areas are poor.
“I think there is some cautious optimism for producers farther over in western Saskatchewan where the rains have been a benefit to them,” he said. “We are seeing some reasonable crop prospects in those areas.”
However, an early fall frost could affect yields and quality. According to McMillan, if there’s a killing frost at the normal time of around Sept. 5 in the north and Sept. 25 in the south, that could result in 10 per cent of the wheat grading feed instead of the average five per cent.
Last year 78 per cent of the Canada Western Red Spring wheat harvested graded No. 1 or 2, said CWB president and CEO Ian White.
Much of the crop in the Peace River area is suffering from drought.
The CWB forecasts farmers will harvest 15.6 million tonnes of wheat this fall, 5.5 million tonnes of durum and 7.5 million tonnes barley.
The CWB projects it will export 15.1 million tonnes, down almost three million tonnes from last crop year.
“Everyone needs to be aware this isn’t just about numbers,” Oberg said. “There’s a real human face to this devastation.”
The CWB marketed 22.1 million tonnes of wheat (15.7 million tonnes), durum (4.1 million) and malting barley (2.3 million) during the 2009-10 crop year, which ended July 31. White estimated farmers will receive $4.8 billion through the CWB’s pools and other pricing options.
“This marks the third-highest total return in the past decade and slightly more than what farmers saw in 2006-07 before the run-up in prices,” he said.
Of that 22.1 million tonnes sold, 18.8 million tonnes were exported – the highest volume since 1999-2000. That’s up 400,000 tonnes from the previous year and about 2.2 million tonnes over the 10-year average.
Wheat exports of 13.6 million tonnes were also the highest in a decade. Durum exports of 3.8 million tonnes were the highest in three years, and a significant number, White said, given high worldwide supplies.
Domestic sales of wheat, durum and malting barley were relatively unchanged from the previous year at 2.15 million tonnes, 290,000 tonnes and 1.1 million tonnes, respectively.
Although total CWB returns are up, the price per bushel is down, reflecting increased world grain stocks, White said. The July Pool Return Outlook (PRO) for No. 1 CWRS 13.5 per cent protein wheat is $6.42 a bushel, not including freight or elevator handling costs.
The PRO for durum and malting barley is $5.47 and, $4.53 a bushel.
Selling a big Canadian wheat crop after the world had harvested the second biggest on record was a challenge, White said.
Canada was the CWB’s biggest wheat customer in 2009-10 at 2.15 million tonnes followed by Iraq (1.18), Bangladesh (1.0), Mexico (0.884) and Japan (0.880). Except for Canada, the rest of the CWB’s top five customers last crop year are different than the previous crop year.
The CWB’s top five durum customers in 2009-10 were the same as the year previous. Italy was the biggest customer importing 557,000 tonnes, followed by the United States, which despite having its own bumper crop, imported 547,000 tonnes.
Domestic sales remained the CWB’s biggest malting barley customer at 1.1 million tonnes, followed by China (550,000) and the U. S. (395,000).
The CWB exported very little feed barley – 133,000 and 99,000 tonnes to Japan and Saudi Arabia, respectively – because domestic prices were higher.
Wheat futures prices have been increasing recently mainly because drought is hurting wheat production in Russia and Kazakhstan. When asked if prices will continue to strengthen White said: “I think at this stage you have to recognize there is a large crop in the world irrespective of what’s happening there (in Russia). We do have significant stocks, particularly in the U. S.” [email protected]