With the threat of another drought looming large in farmers’ minds, some Alberta canola acres could be lost to other crops in 2016.
During its spring-seeding intentions survey, Alberta producers told StatsCan they intend to grow 5.6 million acres of canola in 2016 — a hefty eight per cent drop from last year’s 6.1 million acres.
And while most canola farmers are saying it’s “business as usual,” others are scrambling to reduce the blow of another potential dry year, said Ward Toma, general manager for the Alberta Canola Producers Commission.
“I think the biggest driver right now is the moisture situation in a lot of the province,” said Toma in an Apr. 27 interview.
“The report showed a big increase in pulse acres, and that’s probably reflective of some of the prices there, but the real big acreage shift was toward cereals. That might have more to do with the fact that it’s very, very dry, particularly in the south and the central area.
“When that survey was done (in March), it might have been in a lot of folks’ minds that it’s too dry for canola.”
Sexsmith-area canola producer Greg Sears agrees.
“There’s very little subsoil moisture,” said Sears, who is also the board chair for the canola commission
“When you do see some moisture risk and crop establishment risk, canola does have a fairly high per-acre input cost, and there may be some producers who are trying to mitigate risk in the marginal areas or when they have less than optimal seeding conditions.
“With the dry weather in much of the province, we’re going to see additional acres going into deeper-seeded cereals and pulses as well.”
While canola prices have rallied in recent weeks, “prices aren’t what they have been in the past,” noted Toma.
“The profitability of other crops, like pulses, might be more attractive in some of the areas,” he said.
Aside from the strong prices — particularly with field peas — some producers are looking to “relax their rotations a little bit,” said Sears.
“With producers trying to extend their canola rotations — which is not necessarily a bad thing — people are trying pulses,” he said. “There are places in Western Canada with canola-wheat rotations, and introducing another rotational crop is not a bad thing from a farmer’s perspective.”
For some farmers, the drop in acres could be good news when it comes time to market their crop in the fall.
“Internationally, there’s still really good demand for the product,” said Toma. “If there’s a drop-off, we might see a bit of a positive action on our prices, but we won’t know that until we see what happens at harvest.”
Fewer acres may mean smaller export volumes or greater competition for Alberta’s crush industry, he said, but “it’s not an overly huge number.”
“We only have capacity for about 60 per cent of our crop (in the crush industry), so it’s just going to be a matter of who’s going to pay to get the crop,” he said. “Is it going to be our export customers? Or is it going to be the crushers who are selling the value-added meal and oil? Crushers will do what they have to do.”
But overall, Alberta’s canola industry isn’t going to suffer much from the dip in acres, said Sears.
“I don’t think growth in the industry necessarily needs to depend on growing the acres. Having stable rotations that accommodate good agronomic practices actually helps the canola industry in the long run by keeping highly productive crops growing,” he said.
“By improving the knowledge level of producers and by sharing best practices, we’re going to be able to maintain and grow the tonnage of the product without having to maintain the absolute acres in canola.”
There’s always going to be “ups and downs” in acreages depending on the weather and price forecasts, he added.
“Farmers have to pencil things out and figure out what the best risk management strategies are for their operations,” said Sears.
“But over and over, producers have come back to canola as a good, stable source of income, and I’m pretty confident that’s going to continue.”