Stats-Can data 'a good dose of reality' says GFO chairman

Friday, December 6, 2013

by JIM ALGIE

Statistics Canada reports this week highlight record Canadian harvests of corn, wheat and canola together with the third, year-over-year drop in September farm prices.

“It’s a good dose of reality,” Grain Farmers of Ontario chairman Henry Van Ankum said in an interview, Thursday, about big crops and weak prices below $4 a bushel for corn.

“I think we always knew the market was cyclical and it would go back to its up and down ways,” he said of comparatively buoyant markets in recent years. “Certainly when you get down to the price range we’re in now, you’ve got to really examine your costs and you’ve got to figure out where you can gain some efficiencies,” Van Ankum said after a day spent harvesting late corn on his Wellington County farm.

Statistics Canada based its Wednesday production report on November interviews with farmers. The agency followed up, Thursday, with the Farm Product Price Index for September. Neither report brought surprises for market watchers.

Survey data shows higher production of most major field crops including several records.

Meanwhile the price index for farm products fell 0.2 per cent in September when compared with the same month last year. That’s mainly because higher livestock prices offset lower prices for crops.

Livestock offered the only bright spots. The price index for livestock and animal products rose almost 10 per cent in September of this year when compared with 2012. That follows a rising trend in livestock prices which began in April of 2013, following more than 12 months of decline.

Hog prices led the way sharply with a 35.9 per cent increase. Cattle and calf prices rose 8.6 per cent, the report says.

It’s partly because of limited livestock inventory. Total sales of cattle and hogs have reached their lowest levels since 2001 and 1995, respectively.

Grey County cattleman Bill Herron said Ontario’s current cow herd is smaller than it has been in 12 years. A Beef Farmers of Ontario director, Herron said his members have been chastened by years of high costs and low prices following the BSE crisis of 10 years ago. He predicted cattle farmers will be slow to respond to the market’s emerging opportunities.

“The challenge is that crops have been profitable enough that there has been a lot of land removed from pasture and hay and into the row crops,” Herron said in an interview, Thursday. “Whether that will ever be available to come back in any significant amount means growth will be slow,” Herron predicted of beef cattle expansion.

Even in Ontario where rain and snow has delayed harvest, this year’s corn production is abundant, Van Ankum said. He figures as much as 20 per cent of Ontario’s corn crop remains unharvested because of rain and occasional snow. Despite delayed harvest, corn yields are generally above average, Van Ankum said.

Stats-Can production data indicates a record, nine million tonne crop of grain corn in Ontario, up 4.8 per cent. It’s part of a national record crop of grain corn of 14.2 million tonnes, up 8.7 per cent, and a record harvested area of a million acres, the agency said.

Not only corn but canola, wheat and soybeans are all coming in at record levels, Stats-Can says. Nationally, canola production rose 29.5 per cent to a record 18 million tonnes.

Farmers reported record wheat production of 2.9 million tonnes, a 38 per cent increase over 2012. Reported soybean production nationally represents a 2.2 per cent increase over 2012 to produce a record crop of 5.2 million tonnes. Even so, Ontario soybean production declined 9.5 per cent to 3.1 million tonnes largely because of lower yields, the report says. BF