(Resource News International) — Statistics Canada’s grain and oilseed crop production survey, scheduled for release Monday (Oct. 4), is expected to be taken with a “grain of salt,” with most market participants casting doubt on its numbers.
“The survey is likely to show production of the various grain and oilseed crops at a high level, whereas most of the industry believes the numbers will be a lot lower,” said Ken Ball, a broker with Union Securities in Winnipeg.
Part of that, he said, will be because the survey of the crop size was taken when only a very small portion of the harvest had actually been completed.
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Ball felt that the Canadian grain industry will be looking to see if the government agency also fine-tuned its acreage base in the report.
“The numbers are unlikely to be very trustworthy,” said Ron Frost with Agri-Trend Marketing and an analyst with Frost Forecasting Consulting of Calgary.
There will be a very low confidence level among the industry that the government survey will accurately predict what crop production in 2010-11 will be.
“Part of that will be tied to the adverse weather conditions during the growing season and the fact the survey was taken before some additional bad weather delayed development and impacted the crop potential,” Frost said.
The bad weather after the survey was taken included killing frost when very little of the crop in Western Canada had been harvested, he said.
There is a very high degree of variability regarding yield potential, Frost said, and that issue will only be addressed when the crop is actually in the bin.
There were also numerous questions regarding light test weights of the crop, particularly in the case of wheat, barley and oats, Frost said.
“I know that there were some great yield potential for both barley and wheat in select areas, but with the weather we’ve had over the past month and based on past experience, we have a high probability of overestimating production in this report,” Frost said.
“High yields are likely, but low test weights could result in us finding out that we lost five to 10 per cent of the production due to weight loss.”
“The key to this report will be the need to rationalize reality with perception,” said Mike Jubinville, an analyst with ProFarmer Canada in Winnipeg.
He defended the StatsCan survey, noting that the government agency will have taken some of the variability out of the numbers by checking with provincial government agronomists as well as crop insurance outlets.
The agency would have also reviewed the historic yield potential of the areas within the survey region, among other key information gathering factors, he said.
While the production numbers in the StatsCan survey will be overstated, Frost said, further updated reports will show what kind of yield loss there was and in turn reduced production estimates.
Table 1. Statistics Canada’s estimates and pre-report ideas for 2010-11 Canadian production, in millions of tonnes.
| Trade | StatsCan, | |||||
| estimates | July 31, | |||||
|
|
|||||
| Canola | 10.50 – 11.30 | 10.867 | 11.825 | |||
| All wheat | 20.60 – 22.00 | 22.659 | 26.515 | |||
| Durum | 2.70 – 2.93 | 3.122 | 5.399 | |||
| Barley | 8.10 – 8.50 | 8.488 | 9.517 | |||
| Oats | 2.00 – 2.40 | 2.392 | 2.798 | |||
| Flaxseed | 0.51 – 0.54 | 0.570 | 0.930 |
