Poor weather conditions have dramatically reduced Canada’s production of grains and oilseeds this year and resulted in a lower-quality crop.
At the same time, prices for wheat, corn, barley and soybeans are much lower than last year, resulting in much lower projected earnings for farmers.
Last year was a record year for wheat production, with about 37.5 million tonnes, a 38% increase from 2012. Most of the durum wheat crop was of highest quality and the sheer volume that had to be shipped caused friction with the railways.
This year, total wheat production is expected to fall 27% to about 27.5 million tonnes, according to Statistics Canada.
Farmers are on track to meet or exceed historic average yields, according to Harry Brook, a crop specialist with the Alberta department of agriculture, but the grade of wheat produced will be much lower.
A snowfall and hail in September created poor conditions for farmers at a time when the wheat had to dry in preparation for harvest.
Brook said many farmers will be looking to sell their crop as feed because of the lower quality and that will hurt their income.
On the other hand, it’s good news for livestock producers, who will be buying feed. They are seeing record prices for livestock.
Canola, corn and barley production is also on track to be substantially lower than last year, Statistics Canada estimated in early October. But soybean production could be up.
After hitting new highs in 2013, prices for canola, wheat and other crops have plunged, in part because of supplies left over from last year’s record harvest in Western Canada, according to the latest commodity report from BMO.
An oversupply of corn and soybean production worldwide has led to a 34% drop in corn prices and 25% lower soybean prices than a year ago.
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