Higher prices lure farmers

Reuters / Canadian farmers intend to plant nearly a million acres more wheat than the industry expected in the first year of an open grain market, along with a record-large canola crop, Statistics Canada reported late last month in its initial forecast of 2012 planting intentions.

Drier-than-normal weather in Western Canada, stretching back to last summer, brought millions of previously flooded acres back into production this spring, lifting plantings of most major crops.

All-wheat plantings may rise 13 per cent to 24.3 million acres (9.8 million hectares) from last year’s 21.5 million acres, blowing away the average trade estimate of 23.4 million acres in the first year farmers can sell their wheat or barley to buyers other than the Canadian Wheat Board.

A new Canadian law will end the wheat board’s 69-year-old marketing monopoly on western wheat and durum for export or human consumption on Aug. 1, allowing farmers to sell their next crops to any buyer, not just the CWB.

Manitoba farmer Doug Chorney, who heads Keystone Agricultural Producers, said farmers’ bullishness about wheat is less about the marketing change than high prices.

“I’ve been able to forward-sell my spring wheat at very good prices. Producers are fairly bullish on wheat this year,” he said.

Canada is the biggest exporter of spring wheat, durum, oats and canola.

Western Canada’s wheat acres, like those in the U.S. northern Plains, are getting a boost from a dry spring after two years of severe floods, said Mike Krueger, president of the Money Farm grain-marketing advisory service near Fargo, North Dakota.

“They have had big fallow acres for the previous two years because of very wet conditions. So acres did not get planted in 2010 and especially in 2011,” he said.

Statistics Canada surveyed 13,432 farmers across the country between March 23 and 30.

Oat plantings look to be 3.4 million acres, just as traders forecast, and compared to 3.1 million acres a year ago.

StatsCan expects farmers to plant eight million acres of barley, up by nearly one-quarter from last year, and higher than trade expectations for 7.7 million acres.

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