by PAUL RAYNER

If there was a term to describe the feelings of professionals in the field this spring in terms of agricultural commodities, it is “cautious optimism”.

Prices are there, for some crops in particular. Of course, many other factors play into the game. But at least there is some chance to look forward to this planting season. Seed dealers and elevator operators may not completely agree with one another when making predictions about what will be planted, but they do agree some opportunities exist.

“Everything looks good,” said Wes Froese of Boissevain Select Seeds Ltd. “The question is what looks best. There are opportunities to make money again.”

The one crop everyone is pointing to is canola. According to Duncan Armstrong of Armstrong Seeds, two years ago they were budgeting for canola at $6 a bushel. Now, depending on the source and the day, prices over the last few months have hovered between $17 and $11 a bushel.

“The fall projections change daily,” explained Bob Wilson, the manager of the Paterson elevator in Boissevain. “It can change twice a day. A couple of years ago it was $5 a bushel. We’re seeing some all time highs.”

“With canola, the price looks good,” Froese stated. “We were sold out of (seed) for a lot of varieties by Christmas time.”

“Certainly, I think people will be leaving as many canola acres as they can,” said Doug Robertson of Blue Bird Farm. “I find people are sticking to what has made money for them in the past, with a proven track record, and that is canola and wheat.”

Canola is not without its risks. It can be a touchy crop. Robertson said some are planting it earlier than they did in the past. However, that can increase the risk of frost damage. As well, heat can play serious havoc in the summer. It is a bit of a chancy situation.

“Canola is tight,” Armstrong stated. “There is frost if it is in too early. It can be nipped where the cereals can take it. The heat can be bad too. When it hit the high 30’s last year for that long while, we figure we lost ten bushels to the acre. It hits it hard. The odd hot day is not bad, but if it stretches, the roots can’t take it.”

Another concern is rotation. Although farmers’ decisions about what to plant have a fair bit to do with prices, Froese said rotation is a major factor as well. As Robertson explained, there is always a need to be careful on that front.

“A lot of people are stretching rotations a bit,” he stated. “Canola on top of canola can be a bit of a concern. You have to get away from it eventually or you get diseases.”

Wilson said there are a number of farmers doing pre-price contracts on canola, as well as red spring wheat. The concept is to lock in a number of bushels of the crop with an elevator at a pre-harvest price, banking on the price dropping over the summer. There are benefits to this, but also drawbacks. The farmer is responsible for delivering what is in the contract, unless they buy their way out of the contract or covering their shortfall.

“You are seeing more and more of it,” Wilson said, “but there is a risk. Most are living with the risk.”

The other big crop everyone is pointing to is wheat. According to Wilson, 1 CWRS 14.5 is presently predicted at $9.25 a bushel net to farmers which is impressive

“That’s wonderful. It has never looked this good.”

“Wheat is doing well,” Froese agreed, “there is an opportunity to make some money on wheat again. There was some concern the wheat acres would come up too much and drive the prices down, but I think we could have a year or two before that. ”

Robertson said some of the people needing to rotate from canola might choose wheat. As well, weather predictions may play a role.

“There is talk of a drought,” Robertson said, “and wheat is better than canola if it’s dry.”

Many reasons may abound for rises in prices. One of the big ones quoted is the growth in ethanol production. It creates more need, particularly for corn, which helps those prices. As well, as more farmers, especially in the US, move more to corn production, it drives up wheat prices as well.

“Ethanol creates an increase in demand,” said Froese, “year after year. It has been great for farmers. It is a shortage of supply with so many acres moving to corn.”

After canola and wheat, there are a few divergences in crop predictions. Flax prices are good – Wilson said about $14 a bushel, although they were higher – but there are differences regarding whether or not farmers will grow this oilseed crop. Robertson said it is hit and miss, which shows through other opinions. Froese saw flax down some, while Armstrong said it was one of the ones he was sold out of. Berkeley Holstein, the facility operation manager of the Viterra inland terminal outside of Boissevain pointed to a reason for reluctance.

“I think flax might be up marginally,” Holstein predicted, “definitely wheat and canola. But flax doesn’t yield as good and the stubble is hard to get rid of.”

Holstein felt barley would be down, as did Froese. Although Armstrong for one thought it could be strong, Holstein felt it might go down in acreage due to the uncertainty regarding whether or not the government would keep it within the Canadian Wheat Board.

“I think with other commodities, they will feel there is a better handle on them.”

Despite good prices for many commodities, it is not completely smooth sailing. The ground is dry, and as Froese stated, you have to grow a crop to collect. Armstrong said those who do practice zero till help themselves, as it keeps the moisture in better.

“A couple of timely rains and we’ll be okay.”

However, higher prices have been matched by higher input costs. As Armstrong stated, many people do not understand the impact. He said when he started in 1973; they were paying 17 cents a gallon for diesel fuel. Now it is $1.07 a liter.

As for fertilizers and herbicides, Kent McKay, the plant manager of Double Diamond in Boissevain said it is different for different products, making a general comment difficult to make. He said herbicides are for the most part unchanged, with everyone getting used to small increases each year. Some fertilizers are up significantly, while some are not.  The big one is 11152 phosphate. A year ago it was about $575 a ton. Now it is running in the $1300-1400 range, although a lot of product has been secured at a previous price.

McKay felt some of the price rises were due to demand. Due to the positives for agriculture, places like the US, India and China are buying up all the fertilizer they can. This plays a role in creating shortages just as it does with crops.

“There is some demand,” he said, “that didn’t exist before, so there is not enough product. We do have to feel fortunate. It comes at a time when things are overall pretty positive economically. It this happened a year or two ago, it would be a dire situation.”

The seed plant operators say the cereals will be getting into the ground soon, followed by canola. In some cases, such as canola, the decisions and purchases are made by the end of the Christmas period. In others, decisions and purchases are made on the fly. Armstrong said they usually seed till the middle of May and then start to peter out, unless it is a wet spring, then it goes until June.

At any rate, some things look a little brighter than they have in a while.

“My famous quote is that I am ‘cautiously optimistic,” Armstrong stated. “We never lost a crop in April. But things look better and hopefully we can have a good year.”

“I don’t want to be blindly optimistic,” Froese added, “but we could be in for a couple of good years.”