Well, another harvest has come and gone, and hopefully you are happily marketing a profitable crop while already planning and pricing the next one!
Although this crop started out slowly with heavy snow cover and plenty of rain keeping many producers on the Prairies out of the field until well after their normal seeding dates, Mother Nature changed her tune following and was quite kind for a large part of Western Canada.
For us here in the Parkland region of Saskatchewan, conditions really couldn’t have been better. Other than the odd hailstorm and some patchy areas that missed some of the summer rains, the growing season was very near perfect for a lot of producers. These conditions led to a well above average crop, especially in the cereal grains, which in turn, pushed prices lower going into harvest. While there is usually some pressure on grain prices at harvest, the especially large crop pushed commodity prices even lower early in the fall.
StatsCan numbers have varied throughout the fall, leaving many wondering where our actual production numbers sit on the major prairie crops. Traders and farmers alike have spent much of the fall trying to get a handle on grain volumes to properly market this crop. We have watched prices fall during the harvest season but should start to see a rebound as we look ahead and start to price new crop for 2023.
Following one of the worst crops in recent history with one of the best will make for some interesting market opportunities in the coming months as the battle for acreage this spring will be one for the ages. With all commodities coming off a short crop and carryout at all – time lows, this year’s bigger crop will not be enough to bring any kind of surplus to the supply numbers. Because we will still be sitting with tight supplies across the board, most cannot afford a slip in acreage going into 2023. This will force aggressive pricing for new crop contracts, and that will generally lift current old crop prices higher as well.
In a year like this, it can be difficult to be patient as we see prices falling while we know the crop is above average. However, looking at the bigger picture, and knowing that many shelves are bare, not only here in Canada but around the globe, can really be a benefit when trying to maximize returns. As I have mentioned before, it is imperative folks keep in close contact with their buyers and ensure that when opportunities arise they are top of mind. These opportunities will come, it will just take a little extra patience to be in the position to take advantage of them.
Until next time…