Winnipeg Free Press - PRINT EDITION

Rain on 1M acres of farmland

Analysts say a further million will be written off this season

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Rain has once again caused a sudden end to the year's business for about one million acres of farmland in Manitoba -- about 10 per cent of the province's total producing acreage.

And some experts believe a similar amount that has already been seeded -- another one million acres -- might eventually have to be abandoned before harvest because of moisture damage.

While the success of the farm industry is always somewhat dependent on growing conditions, the recent spate of dramatic weather events has increased uncertainty.

Bruce Burnett, head of weather and crop-production research and analysis at the CWB (formerly the Canadian Wheat Board) said unpredictable growing conditions have become more frequent in the past decade.

"Last year, there was a huge crop," he said, "This year, some of those farmers are going to have no crop. As a business, you would much rather have an average crop."

Three years ago, the rains came earlier and prevented more than three million acres from being seeded in Manitoba.

'Last year, there was a huge crop. This year, some of those farmers are going to have no crop'

And last year, when there was a record crop, transportation bottlenecks through the fall and winter robbed some farmers of as much as $50 per tonne in cash receipts -- a bitter pill for many after the heartbreak many experienced only two years prior.

Provincial budget documents say the agricultural sector's share of the provincial economy declined from 3.9 per cent in 2012 to 3.3 per cent this year.

In addition to the effects on the grain crops, the province's livestock industry -- hogs and cattle -- has been decimated over the past 10 years by cross-border issues regarding disease and trade restrictions.

But despite the spate of grief, Burnett said, "It is a highly regional thing in terms of the impact on the industry."

Western Manitoba to Portage la Prairie has been taking the brunt of the damage this year. Elsewhere, conditions are good.

Beef and pork prices are now on the rise, and cattle and hog herds are growing.

Farm cash receipts were up around 15 per cent in Manitoba for the first three quarters of 2013, the year of the record crop.

Even with all the challenges for the crop and livestock sectors from 2008 to 2011, total farm cash receipts were relatively stable in Manitoba, totalling close to $5 billion per year.

With volatility now more the rule than the exception, it can cause some consternation in trying to plan such a business. But there are an increasing number of tools available for producers to try to dodge their way through potential calamities and even try to capitalize on certain scenarios.

Derek Squair, president of Agri-Trend Marketing, which provides marketing service to farmers, said he believes this year's conditions in Manitoba will be just as hard on the provincial industry as 2011.

He said it does make farm planning challenging, but there are opportunities as well.

"We do lots of work with our clients with futures markets and different vehicles," he said. "We try to position them properly to capitalize on changing conditions."

If rain wipes out a field, it doesn't matter how sophisticated the farmer is. But another important factor at play in the farm economy is a trend toward improving yields.

The Canola Council of Canada set a target of 15 million tonnes by 2015. It hit 17 million tonnes in 2013, two years ahead of schedule. Its latest target is 26 million tonnes by 2025.

Derek Brewin, a professor in the department of agribusiness and agricultural economics at the University of Manitoba, said acreage seeded is not the only determining factor in the success of the crop year.

"Management techniques have changed, and there have been significant improvements of yield potential from hybrid versions of canola," Brewin said. "Those canola-yield gains and the ability to plant more area of canola has been a big shift over the past 10 years."

Lost agricultural production impacts the economy, but Brewin, for one, believes we underestimate the importance of agriculture in Manitoba.

Primary agricultural production may represent just 3.3 per cent of the GDP, but that does not take into account food production, including the substantial pork-production operations in Brandon, Winnipeg and Neepawa.

The big elevator firms such as Richardson International (owners of Pioneer Grain), Cargill Canada, Paterson and Parrish & Heimbecker are all headquartered in Winnipeg, as is Feed Rite, one of the largest feed companies in Western Canada, as well as some of the largest agricultural-equipment manufacturers.

"Producers are getting better and there is a huge input market -- about $300 of input costs per acre for canola," Brewin said. "That is an amazing amount of money flowing into the input sector in Manitoba."

Republished from the Winnipeg Free Press print edition July 11, 2014 B7

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