Canada Canola Acreage Seen Falling to Five-Year Low After Frost

June 5, 2015 06:33 AM
Canada Canola Acreage Seen Falling to Five-Year Low After Frost

Widespread frost and freezing temperatures last month killed canola crops in Canada, the world’s top grower, and acreage could fall to the lowest in five years, according to ProMarket Wire.

After an early spring lured farmers into sowing fields, an arctic blast at the end of May damaged plants and now farmers are finding it difficult to get supplies needed to reseed fields, according to Errol Anderson, the president of ProMarket Wire in Calgary. Plantings could fall below the government’s estimate of 19.4 million acres to about 18 million, which would be the smallest since 2010, he said.

“Definitely, the acres will be lower,” Anderson said in a June 3 telephone interview. “It’s got a huge impact.”

It’s been a rough ride for farmers in Canada, where the cold weather follows a dry spell that hampered seeding in parts of Alberta and Saskatchewan, the country’s biggest crop growers. Canola seeds are crushed to make vegetable oil used by McDonald’s Corp., KFC, Taco Bell and Frito-Lay. Prices have jumped 12 percent this year.

Canola futures for November settlement rose 0.3 percent to C$490 ($392.31) a metric ton at 9:31 a.m. on ICE Futures Canada in Winnipeg, Manitoba. Prices touched $497.40 on June 2, the highest since May 2014. The contract could rise to as high as C$525 as supplies tighten, Anderson estimates.

Low Temperatures

The crops can’t withstand cold for very long, and some areas of the Prairies had temperatures as low as -11 degrees Celsius (12 F) during the last weekend in May, said Wendy McDonald, a manager of crop inputs for Winnipeg-based grain dealer Parrish & Heimbecker Ltd. The company is trucking in at least 1,200 bags of canola seed from Alberta and Saskatchewan this week to meet the demand from farmers in western Manitoba who need to replant about half of their acres, she said.

“I’ve never seen anything like this,” McDonald said in a June 2 telephone interview. “The canola is dead and gone now, so they have to reseed.”

While farmers in some areas are having difficulty obtaining seed, others may not be able to replant their crops because the soil is too dry, said Bruce Burnett, a weather and crop specialist with Winnipeg-based grain marketer CWB.

Areas of western Manitoba and eastern Saskatchewan got less than 60 percent of normal rain this growing season, according to the government’s agriculture agency. Farmers in this region may need to replant as much as 70 percent of their canola acres after the frost, said Jonathon Driedger, a senior market analyst at FarmLink Marketing Solutions in Winnipeg.

Trevor Scherman, who farms near Battleford, Saskatchewan, is reseeding all of his 2,200 canola acres after frost killed plants and turned them black. That’s something he’s never done before in 14 years of farming. Seed supplies near his fields are becoming scarce, and one of his neighbors drove more than 200 kilometers (124 miles) to buy 35 bags to replant his field.

“There are lots of people scrambling now,” Scherman, 37, said in a telephone interview. “We know we’re not going to grow the canola crop we had planned and hoped for.”

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