“We’ve seen near normal precipitation throughout most of Saskatchewan and well as southern Alberta and much of Manitoba,” said Trevor Hadwen, agroclimate specialist with Agriculture Canada.

This precipitation occurred Sept. 1 to May 1.

“The challenge with fall, winter and early spring precipitation is that that’s our dry period of the year. We get less than half of what we would during the summer months, quite often much less than half. Getting near normal precipitation for that period is great, but it’s not making up for the dryness that we had last year,” he said.

The Edmonton region and northern Alberta up to the Peace River region has been incredibly dry.

“We’re seeing precipitation based on the statistical curve of a one-to-500-year event, depending on where we are exactly. It’s not very common to see conditions this dry this early in the spring for that region,” said Hadwen.

“We’re concerned about that area. We’re seeing drier conditions, especially in short term drought situations. That’s going to impact agriculture specifically.”

Winter precipitation in general was a bit misleading this year. It was normal across southern Alberta and most of Saskatchewan and Manitoba, but the precipitation that fell this year had to battle higher than average temperatures.

“We started to see moisture loss throughout the winter in terms of evaporation from the freeze thaw cycles that we saw. We saw a lot of sublimation where the snowpack just turns into a gas without even going through the water cycle,” said Hadwen.

There wasn’t a ton of moisture in the early spring snowpack.

“When it started to warm up, the runoff was very minimal. And the impact of soil moisture was not as great as you would expect from the snow that we saw on the ground or the snow that we received throughout the winter. The winter snowfall wasn’t as effective this year in recharging dugouts or recharging reservoirs. It wasn’t even that effective at recharging soil moisture because of all the freeze thaw that was drying out of the soil during the winter period,” he said.

In many places, soil was exposed, and the temperature stayed right around that freezing mark.

“When you don’t have that insulating blanket on the soil, we’re losing moisture throughout the winter period. If we have windy days and it’s three degrees out there or even just a little bit less, we’re starting to lose moisture that we did have in the soil through evaporation,” said Hadwen.

Conditions are not great for soil moisture.

However, things are starting to improve.

“What we’re seeing these last couple weeks or last month has been an improvement from previous months,” he said.

“May precipitation is typically double what April precipitation is, so we can start really start accumulating that moisture,” he said.

“That’s going to help farmers, especially people who are seeding into annual crops right now.”

Southern Alberta, Saskatchewan and Manitoba have all seen considerable amounts of precipitation the last couple of weeks. That should give a head start to the crops. However, many of those regions are extremely dry in the subsoil, and don’t have the reserves to withstand long periods without precipitation or with long, hot periods throughout the summer. These areas are going to need moisture on a timely basis or much more moisture during upcoming weeks and months, he said.

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The feds on Friday announced their 60 per cent, or $219 million, share of AgriRecovery program funding for the three westernmost provinces.

“I’ve had the opportunity to meet with farmers and producers from across Western Canada and they’ve shared just how challenging this growing season has been for their operations,” federal Ag Minister Lawrence MacAulay said in a release.

Program details are still being worked out, the Alberta government said, but its federal-provincial program will see livestock producers with grazing animals able to apply for financial support to cover losses incurred in managing and maintaining breeding herds. Eligible producers could access up to $150 per head for breeding animals, the province said.

In Saskatchewan, the program will cover 70 per cent of extraordinary costs related to feed and freight incurred after May 1, 2023 through to the application deadline of March 1, 2024 with initial payments of up to $150 per head to eligible producers to help maintain the breeding herd in the drought regions, with additional payments to be based on availability of funding. The province had already committed up to $70 million toward its share of AgriRecovery funds.

In B.C., farmers will be able to seek up to 70 per cent support for transportation costs to move livestock to feed and water through the recovery period, and for feed testing for additionally purchased forage, plus support of up to $160 per animal for “extraordinary replacement costs” where breeding herds were downsized.

In areas of B.C. where Crown range or pasture were lost due to wildfire, supports will also be offered for alternative grazing requirements, with up to $80 per head to re-establish safe winter-feeding facilities and general cleanup; and up to 70 per cent of extraordinary wildfire-related costs for veterinary services, mustering of livestock, mortality of breeding animals, uninsurable irrigation and infrastructure repairs, labour costs to repair private fences; and reseeding and re-establishing tame forage.

Also, up to 70 per cent of the extraordinary costs will also be covered for B.C. beekeepers and honey producers to replace lost colonies, apiaries and equipment, the province said.

More details to come.

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The severe to exceptional drought choking the lower Mississippi River valley is expected to improve this winter as the El Nino weather pattern brings better rains to the region, NOAA said in its U.S. winter weather outlook.

But lingering drought in the upper Midwest and forecasts for normal to below-normal precipitation across basins that supply tributaries such as the Illinois and Ohio rivers could slow the Mississippi River’s recovery.

Low water has slowed export-bound barge shipments of grain from the Midwest farm belt for a second straight year during the busy fall harvest season, making U.S. exports of corn and soybeans less competitive in the world market.

“We are expecting improving drought conditions for the lower to middle Mississippi Valley during the next few months. But for the hydrological impacts such as low river levels and low ground water levels, that will be a little slower to recover,” said Brad Pugh, operational drought lead with NOAA’s Climate Prediction Center.

“The hydrological impacts could linger beyond the end of January,” he said.

The Mississippi River fell to an all-time low on Monday at the Memphis, Tenn. river gauge, eclipsing the previous low water record set nearly a year ago, according to National Weather Service data.

Shallow river conditions prompted barge shippers to restrict the amount of grain they haul to avoid getting stuck in the drought-parched waterway.

Still, areas of the lower Mississippi River have been closed to navigation at times over the past several weeks following vessel groundings or as U.S. Army Corps of Engineers crews dredged low spots to deepen the channel.

— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago.

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FCC on Tuesday announced what it calls the Replacement Heifer Program, consisting of a loan with a maximum loan life of seven years and a maximum two-year period of interest-only payments.

Variable interest rates for loans made under the program will be capped at prime plus 1.5 per cent, and loan processing fees will be waived, FCC said.

The federal ag lender cited Statistics Canada data which put recent Canadian beef cattle inventory at about 10.3 million head, down four per cent from 2017.

READ MORE: Bleak 2024 for Canadian beef sector, says U.S. report

“The drought conditions this summer affected a large cattle producing area in Western Canada and right now ranchers are making decisions about how to best manage their herds,” FCC chief operations officer Sophie Perreault said in a release.

The new program, she said, “will help reduce cash flow pressures for those who want to maintain or grow their herd.”

Garner Deobald, president of the Saskatchewan Stock Growers Association, hailed the lender’s announcement, saying the program “will help producers rebuild or maintain their herds after consecutive years of drought.”

Perreault said ranchers with other needs beyond heifer financing are urged to contact an FCC representative. — Glacier FarmMedia Network

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Italy’s government called a crisis meeting in May as prices for the staple food jumped by more than double the national inflation rate. With global production of durum wheat headed for a 22-year low, Italy’s famed pasta makers have turned to unusual suppliers such as Turkey for their main ingredient.

In Toronto, Continental Noodles knew there was trouble when the cost of a 20-kilogram bag of semolina flour, milled from durum, rose 24 per cent in a few weeks of July to $26. Family-owned Continental, which sells fettuccine and ravioli to Whole Foods and the general public, is also paying more for tomatoes used in sauce after crop setbacks in Spain and India.

One of Continental’s owners, Vincent Liberatore, fears prices will rise even more now that farmers in Canada have seen their harvest devastated by drought. He said the business will absorb the costs as long as possible, and is uncertain how much more consumers will pay.

“The population has tapped out. Everything has been going up,” Liberatore said. “The biggest stress for us business owners right now is the unknown – the roller coaster up and down.”

Retail pasta prices rose about 12 per cent this year in Europe and eight per cent in the United States, according to market research firm Nielsen. Prices of another staple, rice, have also spiked following export curbs in India.

The International Grains Council forecasts 2023-24 global durum production at a 22-year low, pushing world stocks to their smallest in three decades.

Canada dry

When the Prairies turned dry this summer, Alberta farmer Darold Niwa saw hopes of a bumper durum harvest dashed.

“Until June 10, I felt I was sitting pretty,” Niwa, 67, said from his farm near Oyen. Now “we’ll probably take a loss.”

Niwa’s durum has produced only six to eight kernels per head instead of the usual 45 to 52. His break-even level is 32 to 35 bushels per acre but he is harvesting just 10 or 11 bu./acre.

Canada accounts for around half of global trade in durum but this year’s harvest looks to be the country’s second-smallest harvest in 12 years. Canadian farmers are expected to produce 4.3 million tonnes of durum this year, Statistics Canada reported Sept. 5.

“The pipeline in Canada is empty,” said agriculture analyst Jerry Klassen.

The United States is also expected to harvest a smaller crop due to dryness, while drought has cut production in Spain and severe weather has produced mixed quality in Italy and France.

Deteriorating supplies drove up the Euronext futures price benchmark to a six-month peak in early August. The spike led major importer Algeria to cancel an August durum tender, though it later announced a new one.

Turkey turns exporter

In Italy, which relies on imports to complement domestic crops, some firms are turning to new supply sources. Turkey has emerged as a surprise durum exporter.

Market estimates place Turkish durum export sales so far this season at 300,000 tonnes, with most bound for Italy.

Traders said Turkey is tapping a bumper harvest and high stocks to reverse its usual role as an importer. Its exports are widely expected to reach 500,000 tonnes and possibly one million, depending on government export approvals.

The Turkish trade ministry did not respond to a request for comment.

Turkish exports have cooled Mediterranean and North American durum prices, but they should resume their climb when Turkey runs out in a month or two, said Philip Werle, partner at Spain-based Northstar Brokerage.

Short-term supply relief has also come from Russia, which has shipped over 100,000 tonnes to the European Union since July, according to EU import data.

Pasta giant Barilla, which processes local durum in various countries, said it currently saw no critical supply issues.

Consultancy Strategie Grains says pasta makers could use more soft wheat where regulations allow and consumer income is limited. Durum, the hardest wheat, produces pasta with the prized “al dente” firm texture, unlike soft wheat. In North Africa, durum is also used to make couscous.

“There’s not going to be enough durum to supply the whole world at a normal demand level,” said Strategie Grains analyst Severine Omnes-Maisons.

In the meantime, Vincenzo Martinelli, president of the durum section of Italian millers association Italmopa, nervously awaits the outcome of the Canadian harvest.

“Without Canada, prices will only go up,” he said.

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Corn futures also rose, while the soybean market eased as traders awaited the start of U.S. harvesting.

After the markets closed, the U.S. downgraded its good-excellent rating for the nation’s soybean crop to 53 per cent from 58 last week. That was below analysts’ expectations for 55 per cent. The corn crop was rated 53 per cent good-excellent, down from 56 a week ago and below analysts’ expectations for 54.

Traders are keeping a close eye on U.S. crops after a hot, dry end to the summer raised concerns about damage.

Dryness in major wheat exporters Australia, Argentina and Canada has also raised doubts about the upcoming availability of global supplies, analysts said.

Australia trimmed its wheat production outlook by 800,000 metric tonnes to 25.4 million and projected output will drop 36 per cent from last year as dry weather curbs yields. Dry weather in September could lead to further reductions, traders said.

“We are in an El Nino, and that’s generally bad for Australia,” said Matt Wiegand, commodity broker for FuturesOne.

The most-active wheat contract ended up 3-3/4 cents at $5.99-1/4 at the CBOT after earlier dropping to its lowest level since May 31 (all figures US$). Corn settled 4-1/2 cents higher at $4.86 a bushel and soybeans were down 4-1/4 cents to $13.65 a bushel.

“Wheat markets still appear relatively relaxed despite the fact that the signs of tightening supply are gradually increasing,” Commerzbank said in a note.

In demand news, the U.S. Department of Agriculture reported exporters sold 251,000 tonnes of U.S. soybeans to unknown destinations, the latest in a string of recent sales.

In Argentina, where drought hurt soy harvests, exports of the oilseed could increase following a government move to allow shippers to use foreign currency income to buy soybeans, market analysts said.

— Reporting for Reuters by Tom Polansek in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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The high-delivered bid for Alberta feed barley was $8.06 per bushel, $1.42 less than one month ago, according to Prairie Ag Hotwire. Those in Saskatchewan and Manitoba were $6.50/bu. (down $1) and $6.40/bu. (down $1.10), respectively. The high-delivered bid for feed wheat in Alberta was $10.75/bu., 95 cents lower than last month. In Saskatchewan and Manitoba, they were $9.50/bu. (down 85 cents) and $8.65/bu. (down $1.20), respectively.

Jim Beusekom, president of Marketplace Commodities in Lethbridge, said the general trend over the past month for feed grain prices have been lower, but he also outlined multiple factors behind the declines.

“Since the start of August, there’s harvest pressure. There’s available supply from producers and although the crop is smaller due to drought pressure, there still is supply available right now,” he said.

“To add to that, 50 to 60 per cent of Feedlot Alley is using corn right now. They have that corn purchased and coming in and they will continue to use what they have. It’s priced competitively with barley, anyway.

“It’s more about what corn is doing rather than what barley and wheat are doing,” he added. The December corn contract on the Chicago Board of Trade lost 32.25 U.S. cents/bu., to US$4.8075 since July 31.

Beusekom added that a lack of demand for feed barley and feed wheat has also pressured prices.

“The prices defied the (Statistics Canada supply/demand) report that said we’re short on barley compared to a year ago. It’s because the corn market is strong, which in turn dropped the barley market,” he said.

In order from largest to smallest amounts, Beusekom listed the feed grains currently going to feedlots as corn, barley, distillers’ dried grains with solubles (DDGS), wheat and assorted grains such as rye, oats and triticale.

“Until there’s price action that shows the market is no longer downtrending, then I’ll say it’s different. But at this point, it’s in a downtrend. So you can expect further (price) declines over the next few weeks,” he said.

— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.

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StatCan on Tuesday released those projections, which largely presented a reduction in yields due to ongoing dry conditions on the Prairies. As of July 31, Canadian dry field pea output was estimated at 2.191 million tonnes, a 36 per cent decline from the 2022-23 total and its lowest yearly figure in 20 years.

Lentils showed a similar decline, producing 33.2 per cent less at 1.537 million tonnes, its lowest total since 2009.

Dry bean production was pegged at 269,934 tonnes, compared to 312,994 last year while hitting a seven-year low.

Meanwhile, soybean production was expected to see a 2.9 per cent increase from last year at 6.735 million tonnes. Chickpea production was slated for 3.6 per cent growth to 132,575 tonnes.

Pulse Canada director of market access and trade policy Mac Ross said while there were drier-than-normal conditions in many parts of the Prairies, he does not expect a repeat of the yield cuts caused by the 2021 drought.

“We’re likely going to be better off this year with pockets that fared a little better than others, but we also had less acres on major pulses lentils and peas this year,” Ross said.

Both projections for lentils and peas were well below pre-report trade expectations and the potential lack of supply was reflected in recent price movement. High-delivered bids for lentils ranged from 30.3 to 60.5 cents/lb. as of Monday, according to Prairie Ag Hotwire. Prices have risen between three to eight cents compared to last month and between 4.3 to 18 cents since last year.

High-delivered bids for chickpeas ranged from 35.5 to 51.5 cents/lb., with most varieties gaining seven cents in price over the past month and between 2.5 to 10.5 cents compared to one year ago.

“We’re seeing on the lentil and chickpea side prices going up. We know in India there’s some real concern regarding their kharif planting and the effect El Niño is having on supplies. There’s also some questions about the size of the North American crop,” Ross added.

“The drier conditions we’re seeing in Canada is not just a Canada story. The El Niño effect is kind of impacting production globally and it’s something we’ll have to watch.”

He added that lentil demand from India and pea demand from China are both still very strong, despite a slight decline in the latter. Meanwhile, domestic demand continues to move forward.

“We’re seeing a trend of increased domestic processing here in Canada. We have now about 600,000 tonnes of pulse processing alone here in Canada. If you look at that in terms of volume stacked up with our export markets, the Canadian domestic market is now second behind China as far as our largest markets,” Ross said.

— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.

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Drought is expected to send global wheat stockpiles for major exporters to the lowest levels in more than a decade, a Reuters analysis has shown.

Canada is the world’s fourth-largest wheat exporter and the biggest shipper of canola, which is used largely to produce vegetable oil.

Statistics Canada estimated all-wheat production at 29.5 million metric tonnes, the second-lowest in eight years, and down 14 per cent from last year (see table below). The estimate fell below the average industry expectation of 30.4 million in a Reuters survey.

“We’re down significantly. We’re seeing a tightening (of supplies) in the major exporters,” said Bruce Burnett, director of markets and weather at MarketsFarm.

Farms in areas of North and South America, Europe and Australia face crop losses as extreme weather spreads over an unusually wide geographic area, making food production increasingly vulnerable.

Production of spring wheat, used in baking, looked to fall 14.5 per cent to 22.1 million tonnes. The harvest of durum wheat, used in pasta production, is expected to plummet 26 per cent, to 4.3 million tonnes.

Farmers look to produce 17.6 million tons of canola, down six per cent from last year. It would be Canada’s second-smallest canola crop in nine years.

The average trade estimate was 17.4 million tonnes.

ICE Canada November canola futures extended gains after the report, rising 0.6 per cent.

Oat production looks to fall by more than 50 per cent to 2.4 million tonnes, Canada’s smallest output since 1991.

StatsCan based its estimates on satellite and agroclimatic data as of July 31, before much harvesting had taken place. It will release new estimates on Sept. 14 using data as of Aug. 31.

— Rod Nickel is a Reuters correspondent in Winnipeg.

Table: Statistics Canada’s estimates of production of Canada’s principal field crops as of July 2023, released Aug. 29, 2023.

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Application forms are expected to be available via Saskatchewan Crop Insurance Corp. (SCIC) “in the coming days” for funding “to help offset extraordinary costs of feeding livestock to maintain the breeding herd in Saskatchewan.”

Precipitation has remained well below normal in much of Saskatchewan, particularly in western regions, contributing to “a substantial moisture deficit and hindering recovery of pasture and forage ranges,” the province said.

The provincial funding pledged Monday will provide eligible producers with up to $80 per head “as soon as possible” to maintain breeding stock for beef cattle, bison, horse, elk, deer, sheep and goats. SCIC, on its website, said more information “will be available in the coming weeks.”

The funding will be available based on receipts or appropriate documentation for “extraordinary expenses for the purchase of feed or transportation of feed or livestock,” the province said in its release Monday.

Meanwhile, the province said, it “continues to work quickly with the federal government to jointly examine how AgriRecovery could help respond.”

For its part, the federal government said in a separate release Monday that work with drought-affected provinces to finalize AgriRecovery programming is “urgently progressing,” and that it’s already “worked quickly” with Saskatchewan as well as Alberta and British Columbia on joint AgriRecovery assessments.

The feds on Monday announced their initial list of areas eligible for the livestock tax deferral provision for 2023, including 96 RMs and other municipalities in western Saskatchewan.

“We appreciate the province stepping up and providing their portion of the AgriRecovery payment,” Keith Day, board chair of the Saskatchewan Cattlemen’s Association, said in the province’s release Monday. “We look forward to a similar announcement from the federal government to provide their funding to ensure our producers get the help they need through these challenging times.”

“We are confident that the federal government is working together with the province to assess how they can provide additional support through AgriRecovery and look forward to seeing what that much-needed assistance will be,” Ray Orb, president of the Saskatchewan Association of Rural Municipalities, said in the same release. — Glacier FarmMedia Network

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