An increasing number of farmers are showing interest in locking in the price they will sell their crops for this year.
Prices for some crops are better than others and some farmers might shift from growing traditional crops by adding peas, flax, soybeans or other crops to their operations.
“I just looked at some prices here the other day and for me they’re not that attractive on wheat right now,” said Lynn Jacobson, a farmer and president of the Alberta Federation of Agriculture. “Canola is starting to look fairly attractive because there are 10 dollar contracts out for canola and some guys will be locking in at that price.”
Producers can lock some prices in with new crop contracts. Due to low wheat prices he says some are looking for a Cinderella crop, one that will give them a better return. He also said they are considering different crops including pulse, hemp, flax and others.
“You really have to watch what’s happening on the world markets and even in the Canadian market,” he said. “If there are opportunities to lock in prices that are going to give you a profit, know your cost of production and make your decision from there.”
There is some optimism that grain transportation will improve due to the federal government’s order in council and this week’s Fair Rail Service Act but some farm groups, including the Western Canadian Wheat Growers Association suggest the bill does not go far enough.
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“I think there are still some things lacking in it,” Jacobson said. “One thing we noticed right off the bat is there is still no requirement for a contract between the grain companies and the railroads.”
Contracts could set performance measures for railroads and grain companies. The Alberta Federation of Agriculture will talk to the federal government next week.
Jacobson said, “With the huge carryover, my feeling is the railways are going to be lucky to move what they said they were going to move which is a normal crop, and is still going to leave us maybe between 15 and 20 million tonnes of excess production left over going into next year which will definitely affect prices in Canada.
The situation has changed from what it was a month ago. Jacobson says the gap between what farmers could earn and what it cost to grow crops was too wide then.
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