Canadian farmers are in a difficult position as record amounts of rain in Western Canada’s crop belt will leave the most unplanted acres in roughly 40 years, according to the Canadian Wheat Board. Heavy rains have flooded farmland in Canada, preventing farmers from planting up to one-fifth of the region’s farmland.
As of June 21, crops in Saskatchewan, the biggest Canadian producer of grain, were only 76% seeded as according to the Ministry of Agriculture. Typically planting in Canada is completed by now.
Wheat, canola, and oats are the crops primarily affected by the wet weather. Futures prices have shot up significantly on the news of reduced production estimates due to the wet weather. Oats have rallied 46% and canola 12% this month.
“The historic wet weather in Canada continues, and the longer it does, the more damage that is done to yields,” said Shawn Hackett, President of Hackett Financial Advisors. “The crop could be one of the worst in recent history.”
Crop quality is a major concern as excessive moisture will prohibit growth and can lead to disease. The late development of the crop also leaves it vulnerable to frost in the fall. Yields are less of a concern as crops respond better to excessive moisture than drought.
Law makers in the Canadian government are requesting that the wet situation be considered a “disaster,” which would trigger federal funding. Declaring the situation a disaster would provide farmers money from crop insurance and federal programs, AgriStability and AgriRecovery.
Wet weather is also causing problems in the US as Iowa, Illinois, and Missouri. Roughly six times the normal amounts of precipitation has occurred in Iowa and Illinois.
Everyone knows 2010 is going to be a disaster for Canada, but the questions still remains how bad are the production numbers going to be. A lot will depend on what the growing conditions are like during the remainder of the summer, so it will probably be a month or two before the industry gets a real handle on actual damage.
Disclosure: No positions