It’s a sunny time for Alberta farmers in 2023 as strong commodity prices, high quality, quality crops and good yields have translated into big gains in 2022.
It’s a sunny time for Alberta farmers in 2023 as strong commodity prices, high quality, quality crops and good yields have translated into big gains in 2022.
That’s the opinion of Neil Blue, a provincial agricultural market analyst at Alberta Agriculture and Irrigation.
“We’ve had record — or near-record — high crop yields and profits for the last few years,” he confirmed in a recent interview with Rocky View Weekly. “The pleasant surprise was a rebound in crop yields versus the drought-reduced yields of 2021.”
A second surprise was a fairly dry autumn, which, according to Blue, allowed producers to finish their harvests on time and with good quality (harvest) as well.
“This good quality helps us with our marketing program for the year,” he said.
Wheat prices could be the biggest question mark in 2023, according to Blue, as record harvests in Russia and Australia weigh on markets this winter after near-record highs earlier this year. Before the 2022 crop arrived, supply shortages due to the 2021 drought and the war in Ukraine had led to inflated prices, Blue said.
“Most harvests reached record highs in late winter (2021-2022) and into spring,” he said. “This was mainly due to concerns about the drought, but also to the Russian invasion of Ukraine. There it stopped exports from both Ukraine and Russia for a while and has since restricted the production and harvestability of crops in Ukraine.
“(However) Russia had a bumper crop of about 100 million tons last year, so they have a lot of wheat to export.”
However, Blue pointed to the Canadian dollar’s weakness against the US dollar and the excellent quality of Canada’s crop this fall has allowed Canadian growers to continue growing despite the abundance of Russian and Australian wheat flooding the market this winter to generate income.
“Despite the slump in US futures markets, our (high) quality may seem to be helping us as well,” Blue said. “So we haven’t seen Canadian wheat prices fall as much as they have in the US.”
According to Blue, another bright star for Alberta farmers this year has been canola. This is mainly driven by the canola crush market due to vegetable oil shortages or inconsistent supply in other parts of the world.
“High vegetable oil prices in general have been supportive of our canola oil, and therefore canola seed prices, over the past year,” said Blue. “COVID disruptions have caused uneven demand for vegetable oils, but they have certainly pushed canola prices higher (in 2022). And that demand remains strong.
“Another factor increasingly affecting this vegetable oil market is the increasing demand for its use as biodiesel. As Blue said, “It’s an ever-evolving story.”
Despite this high price for canola, Blue said he doesn’t expect a large increase in Alberta farmers’ canola fields sown in 2023. That has nothing to do with price, Blue said, but everything to do with crop rotations that are at increasing disease risk.
“There is certainly an incentive to grow more acres of canola this year; However, farmers are pushing their rotations as far as they already dare,” he said. “A lot of rotations are just wheat, then canola, then wheat, then canola. From a crop rotation perspective, this is not a good idea in the long run as there are diseases involved in both crops.”
That likely means many Alberta farmers will try to grow some sort of alternative crop alongside wheat or canola to protect their fields from disease.
Fortunately, Blue says, through 2023, farmers have a cornucopia of options with higher prices on almost every crop option. Lentils are likely to be a popular alternative rotation option this year, as may be oats for forage or human consumption, and likely barley and malting barley. Blue said even peas could get a second look from some farmers this year, despite some potential disease implications.
“The prospects for the crop sector are very good (in 2023)”, he concluded.
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