In a context of the current conflict in Ukraine, Canada, as one of the major producers and exporters of wheat and other agricultural products, is becoming one of the alternatives to the volumes potentially absent from the Black Sea region.
This Summer, Argus teams together with Left Field, our local partner, conducted a crop tour in Canada to estimate soft wheat production in 2022-23.
In this Agriculture Insights podcast Angelika Melikian, Argus- tour manager, is joined by Jonathon Driedger, Vice President of Commodity Research, to compare the first wheat harvest results with the findings made during the crop tour in early August. Durum wheat and canola crop conditions are also discussed.
Hello! And welcome to this “Agriculture Insights” podcast, where we analyse the forces shaping the all-important global agriculture markets. This podcast is produced by Argus Media, a leading provider of commodity markets’ analysis. This is the second episode of our “Back from the fields” series, where we discuss the findings from our crop tours.
My name is Angelika Melikian and I am in charge of the Argus-Agritel joint crop tour initiative. In today’s episode, I am joined by Jonathon Driedger, Vice President of LeftField Commodity Research, our local partner in the organisation of the Canadian crop tour.
Today we will compare with Jon the findings from our crop tour and the first harvest results from fields.
Hi Jon, let’s start with a few words about our crop tour which took place in early August. Our two teams covered more than 4000 km in the three wheat producing provinces: Saskatchewan, Manitoba, Alberta.
Hi Angelika, yes, we spent a week visiting nearly 50 different farms across western Canada. Reports from farmers prior the tour suggested the wheat crop was likely to be average, or perhaps slightly better overall, but we were looking forward to getting out into the fields and meeting with farmers at their operations. This growing season was a bit unique in the sense that 2021 was a severe drought, and this planting season started out with some challenges (very dry again in some parts of the western Prairies, and a delayed, wet start in the east).
The tour largely found what we anticipated for production, with most farmers thinking their wheat would see average yields overall, or a bit higher. Of course, this varies by specific region as well, with some dry areas measuring below average, while others were looking at very good crops.
Indeed, this year, Canadian wheat production is on track to make a solid recovery from last year's disastrous harvest. Argus’ initial production estimate for total non-durum wheat production in 2022-23 is 28.4mn. his would be on par with the 2020-21 harvest and the second highest since the 2013-14 record.
However, during the crop tour many farmers mentioned the risk of late harvest this year which could adversely affect the production potential and the crop’s quality: as nights get longer, temperatures get lower, and the risk of heavy rain and frost increases.
At the end of September, can we say if some of these risks have materialised?
Yes, Angelika, I confirm that many of the fields were later developing, bringing some risks. In talking with farmers after harvest, overall, it would seem that yields were at least as good as we anticipated in early August, and perhaps slightly better.
Here I would like to specify that our yield estimates are based on the methodology which relies on field countings and farmers' assessments on crops conditions this year compared to last year and to long-term averages.
Fields are chosen at random but represent areas that would cover a wide range of climate and soil diversity across the Prairies. They are carefully marked so that the results can be compared afterwards with the farmers’ findings.
Yes, and as one might expect, there are individual fields where the actual yield result was higher, and a few that were lower. This reflects an element of randomness when picking places in the field to test for yield, and how that isn’t always a full reflection of what production will be like across the entire field. But the overall reports from farmers so far suggest a final crop that might be slightly larger than expected at the beginning of August, although likely not dramatically so. Warm and dry weather helped advance the maturity of some of the later developing crops. When combined with first frost dates that are only coming after most of the wheat is harvested, it would seem there won’t be much of the crop that will impacted in a negative way.
It’s still a bit early for know too many details about quality, but in general the quality of the Canadian harvest has been quite good. Wheat protein will be lower than last year’s very high levels that were driven by the extremely hot and dry conditions, but still be quite good.
Yes, I know that farmers are always reluctant to talk about quality before the end of the harvest, which this year is, unsurprisingly, still underway in many areas. However, based on the first feedback from farmers but also official figures on surface areas in particular, we could say right now that our mid-August estimates might be very close to actual results.
Yes, I agree with that, it might warrant a small upward adjustment to the size of the Canadian soft wheat crop. So I believe the estimates from the tour will end up being quite close to the final number, but where perhaps the combination of some favorable weather into the final stages of the growing season and general trend of good conditions results in a somewhat better average yield.
Our teams did a good job then!
To finish our podcast, a few words on durum wheat, which, unlike soft wheat, was negatively impacted by drier conditions, with its production concentrated in regions that have seen less rainfall this year. And what about canola, Jon?
As a reminder, our tour focused on measure wheat fields specifically, although we did talk to farmers about canola as well. The feeling was that canola wasn’t going to produce as well as soft wheat, with farmers instead thinking yields might be average or a little less. That also seems to be supported by harvest results. So where there is a trend towards some increase in Canadian wheat production, it’s very possible the canola crop comes in a bit below current estimates.
Thank you so much for joining me today Jon! Grain production potential and exports of wheat or agricultural products in general remain one of the most interesting topics at the moment as much of the world is experiencing high food inflation, with some areas exposed to the risk of famine. Markets are in turmoil and with so much uncertainty, it is important to produce estimates as accurately as possible.
Thank you for tuning in to our podcast today. For more in-depth analyses, crop tour insights, price assessments and so much more on grains, oilseeds and vegetable oil markets, make sure to check out the Argus AgriMarkets service.
We’ll be back next time with another episode on key factors shaping and moving global agriculture markets.