Canada’s grain and oilseed stocks are significantly higher than they were last year and that’s posing challenges for farmers and the railways.
Statistics Canada released its grain and oilseed stocks report for the period ending December 31st. As many analysts expected, the report confirmed that wheat and canola were extremely large. Durum, Barley, Flax and Oats were also much bigger than a year ago.
Farmers are now waiting for the railways to ship them to port. Grain is moving through the system at about the same speed it was last year. However, it is a much bigger crop and the railways don’t have the capacity to move it all yet. As a result it is piling up on farms and in country elevators.
Herb Wall, who farms near Lethbridge said, “It’s going to take probably a year yet to get rid of this grain. The way the grain guys are telling me the pipelines are plugged until at least September or Or October before they’ll even talk to you so that’s discouraging.”
Agriculture and Agri-Food Canada’s January 24th supply and demand estimates predicted grain and oilseed crops would have higher ending stocks than last year with wheat and canola leading the way. Statistics Canada’s report shows they did.
Statistics Canada Grain & Oilseed Stocks Report
Total Stocks Total Stocks
Dec 31, 2013 Dec 31, 2012
(million tonnes) (million tonnes)
All Wheat 28.38 20.61
Durum 5.34 3.93
Canola 12.59 8.1
Barley 6.7 5.2
Flaxseed 0.505 0.412
Oats 2.87 2.05
“It could mean that you’ll have to maybe buy more bins this year or find creative ways to get rid of it,” said Wall.
Grain and oilseed prices also fell. Wall said wheat sold for $8 a bushel in August. Now, he said it’s just under $4 if it’s sold for feed and just over $4 if farmers can sell it at an elevator.
Fortunately, many farmers anticipated the drop and pre-sold crops before the prices fell.
“You have to be very proactive with your marketing when you have these crops,” said Jim Beusekom of Market Place Commodities in Lethbridge. “I’m quite sure at today’s levels you would be better off with a smaller crop at higher prices but that being said, remember that there are a lot of producers that are extremely proactive with marketing and they sold their grain at higher prices.”
“What goes up goes down and we’re not in it for one year, we’re in it for the long term,” said Wall. “I’m just happy to be a farmer and this builds character, this kind of situation. I don’t know anybody who’s ever run into this before.”
In some cases, farmers have never grown crops this big before.
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