The extreme dryness that’s sparked wildfires in Canada’s Alberta is also threatening output of agricultural commodities from the province, a major supplier of grains and wood products.
Some fields in Alberta and Saskatchewan, the country’s top growers of wheat and canola, have received less than 40 percent of average rainfall since May 1, according to data from Agriculture and Agri-Food Canada. Hot, dry, windy conditions led to a fire at wood-panel maker Norbord Inc.’s mill yard on Wednesday afternoon and quickly spread to a log-storage area. The company immediately suspended production, according to a statement.
This is the second straight season that dry weather is hampering crops in the region. In 2015, Alberta declared a disaster after drought parched fields. Plants bounced back later when rains in August boosted yields. This year, western parts of the province along with areas of central Saskatchewan will probably continue to receive below-average precipitation for the next 30 days, which may hurt early-seeded spring wheat and canola, according to Joel Widenor, a meteorologist at Commodity Weather Group.
“It’s going to be a bit of a struggle to see a big turnaround in moisture,” Widenor said in a telephone interview from Bethesda, Maryland. “Our biggest concerns are back into Alberta.”
The fire at Norbord’s mill in High Level, Alberta, may raise prices for oriented-strand board, Ketan Mamtora, an analyst at BMO Capital Markets, said in a note. The company is one of North America’s largest producers of the wood product, and the High Level facility has an annual production capacity of 860 million square feet.
“At this time, Norbord is in the process of assessing damage to the mill and the impact to its production schedule,” the company said in the statement.
Some farmers are waiting to plant canola in hopes of increased moisture, leaving this season’s seeding progress in Alberta trailing last year’s pace, said James Wright, a risk analyst with Alberta’s farm insurer Agriculture Financial Services Corp. Very little or no rain fell in Saskatchewan last week and many parts of the south and west will need rain soon to help crops emerge, the province’s agriculture ministry said Thursday in a report.
“The later they wait, they bring down the yield potential significantly,” Wright said.