By: Marc Schober
Marc Schober is the editor of Farmland Forecast an educational blog devoted to investments in agriculture and farmland.
Wet Weather in Canada Worst in 40 Years
Jun 28, 2010
Canadian farmers are in a difficult position as record amounts of rain in Western Canada’s crop belt will leave the most unplanted acres in roughly 40 years, according to the Canadian Wheat Board. Heavy rains have flooded farmland in Canada, preventing farmers from planting up to one-fifth of the region’s farmland.
As of June 21, crops in Saskatchewan, the biggest Canadian producer of grain, were only 76% seeded, according to the Ministry of Agriculture. Typically, planting in Canada is completed by now.
Wheat, canola and oats are the crops primarily affected by the wet weather. Futures prices have shot up significantly on the news of reduced production estimates due to the wet weather. Oats have rallied 46% and canola 12% this month.
“The historic wet weather in Canada continues, and the longer it does, the more damage that is done to yields,” says Shawn Hackett, president of Hackett Financial Advisors. “The crop could be one of the worst in recent history.”
Crop quality is a major concern, as excessive moisture will prohibit growth and can lead to disease. The late development of the crop also leaves it vulnerable to frost in the fall. Yields are less of a concern, as crops respond better to excessive moisture than to drought.
Lawmakers in the Canadian government are requesting that the wet situation be considered a “disaster,” which would trigger federal funding. Declaring the situation a disaster would provide farmers money from crop insurance and the federal programs AgriStability and AgriRecovery.
Wet weather is also causing problems in the U.S. in Iowa, Illinois and Missouri. Roughly six times the normal amount of precipitation has occurred in Iowa and Illinois.
Everyone knows 2010 is going to be a disaster for Canada, but the question remains how bad the production numbers are going to be. A lot will depend on what the growing conditions are like during the remainder of the summer, so it will probably be a month or two before the industry gets a handle on actual damage.
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