‘Yellow wave’ unlikely despite high canola prices

Favourable crop prices across the board, high fertilizer costs and dry conditions may keep producers from changing things up

Despite record canola prices, Manitoba is unlikely to see much of a yellow wave this summer, say some farmers and analysts.

Bill Nicholson. photo: Courtesy Bill Nicholson

“There isn’t a whole lot of room to increase acreage without deviating from best practices,” said Bill Nicholson.

Nicholson, who farms near Shoal Lake in western Manitoba, figured if farmers had flex in their rotations they’d consider planting more canola. His canola acres are already near the maximum.

Canola prices spiked in late 2020 based on increased demand, particularly from China. At the end of February, the open market price of canola in Manitoba was just over $16/bu., according to Manitoba Agriculture data. Some analysts reported canola going for over $17/bu.

Five months earlier, the price was just under $11/bu.

In January, analyst Chuck Penner of LeftField Commodity Research predicted Canadian farmers would plant six per cent more canola in 2021, Reuters reported.

While Alberta and Saskatchewan will likely see an increase in canola acres, “Manitoba will likely be the exception to that trend,” Bruce Burnett, analyst with MarketsFarm, said. (MarketsFarm is owned by Glacier FarmMedia, which also owns this publication.)

“In Manitoba we’re going to see a minimal increase in the canola number if at all, and we could even see a slight decline,” he said, “but I’m expecting it to be much the same as last year.”

“There isn’t a whole lot of room to increase acreage without deviating from best practices.” photo: Jeannette Greaves/File

In 2020 Manitoba’s canola acres were near the high water mark hit in 2018, said Burnett.

In 2018, producers seeded 3.4 million acres to canola, according to Manitoba Agriculture data, and was again 3.4 million acres in 2020, above the 10-year average of 3.1 million acres.

There might be a couple hundred thousand acres extra to seed to canola, said Burnett.

Farmers the Co-operator spoke to backed that up.

Warren McCutcheon. photo: Courtesy Warren McCutcheon

“On our farm we most likely won’t grow more canola just based strictly on higher prices,” said Warren McCutcheon, who farms near Homewood in south-central Manitoba.

McCutcheon said he’s looking at other issues like the ability to spread out the harvest workload, to direct harvest, and crops’ ability to withstand current dry conditions.

“Over longer periods of time we have had more success growing edible beans and pedigreed seed soybeans versus canola,” he said. “Market prices are also fairly strong for those commodities so at this point there is not a lot of motivation to chase more canola acres than usual.”

Jonothan Hodson said he would likely be planting an extra field to canola — about a 10 per cent increase.

“You don’t want to get too carried away,” said Hodson, who farms near Lenore at the far-west end of the province. Weather could turn against them, he said. Prices could drop. Others could also be planting more canola.

The province is dry. Following a fairly dry 2020, most of agro-Manitoba has seen less than 40 per cent of normal precipitation between November and February, according to Manitoba Agriculture data. Exceptions include the extreme-southeast corner of the province and Parkland region, which have seen between 40 and 50 per cent.

Jonothan Hodson. photo: Courtesy Jonothan Hodson

“I’m wishing there was more snow. I’m quite concerned about the moisture levels,” said Hodson. He runs a mixed farm, and was particularly concerned about what effect low snow levels would have on his pastures and dugouts.

“Our biggest concern for 2021 is moisture,” said McCutcheon. “Our land was extremely dry at the end of last growing season and we did not receive any precipitation after harvest and snowpack is non-existent here right now.”

In the Interlake, Curtis McCrae said his soil moisture was adequate. He was more concerned about timely and sufficient spring rains, he said.

“The signs are that it could be a dry spring, but a significant rain in the spring can change all that pretty quickly,” said Nicholson.

While crop prices are up almost across the board, so are input costs.

By mid-February analysts said urea prices had climbed by US$100 per tonne since the beginning of the year, and diammonium phosphate prices at the Port of New Orleans had risen by US$145 per tonne. They expected prices to continue to climb as spring seeding neared.

Curtis McCrae. photo: Courtesy Curtis McCrae

McCrae said canola and soybeans usually compete for acres on his farm. Soybean prices have also risen, and they require significantly less fertilizer than canola — but they need water, he added.

In Manitoba, soybean acres have dropped in the past few years, said Burnett. For instance, acres decreased 23 per cent from 2019 to 2020, according to Yield Manitoba data.

Some farmers have seen yields drop because of poor weather, he said (though the Manitoba average was 38 bushels an acre, up from 28 bushels an acre in 2019 by Yield Manitoba stats).

Burnett said he didn’t expect to see a jump in soybean acres, but some producers might be encouraged to plant acres back into soybeans, taking from canola.

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“I guess you’ve got to put the dartboard up,” McCrae said.

But, there are many things to be positive about said McCutcheon. With dry conditions in fall, his fields are in excellent condition and ready for direct seeding, he said.

With drier conditions, pea crops have done well. Hodson said he plans to increase his pulses by adding peas this year — both because of ideal conditions and as a way to diversify his rotation and build soil health.

“Crop prices are at the strongest levels we have seen in a number of years so there is an opportunity to have a profitable year if Mother Nature can co-operate,” said McCutcheon.

About the author

Reporter

Geralyn Wichers

Geralyn Wichers grew up on a hobby farm near Anola, Manitoba, where her family raised cattle, pigs and chickens. Geralyn graduated from Red River College’s Creative Communications program in 2019 and was previously a reporter for The Carillon in Steinbach. Geralyn is also a published author of science fiction and fantasy novels.

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