The dry growing season has reduced crop yields by about half in the Lakeland, but commodity prices are taking up the slack—for now, anyway.
“Harvest is going faster than normal, partly because there’s not that much crop to take off,” said Sarah Davis, a Lloydminster-based farm marketing adviser with Farmers Business Network. “Producers are enjoying a less-stressful pace of harvest this year.”
The pace may be relaxed, but the low yields are troubling.
“Everything’s down by about half of a normal yield this year. And that’s pretty general. Some fields are still yielding closer to normal, but overall the average is about half,” Davis said.
“That being said, the prices are about double what they are normally so that’s adding up, at least on the grain side, to be a little bit less of a stressful year. It’s still going to be profitable for the most part, especially because a lot of farms participate in crop insurance. So it’s not as dire as it initially would have seemed.”
Crop failures in the US and drought conditions in most of the world have supported demand and prices in the export market for most crops.
Livestock markets are a different story.
Drought across the prairies has affected the availability of grass and put more pressure on feed supplies. Many beef producers will be selling off cattle for lack of feed, which means abundant supply for feedlots and packers and lower prices for producers.
“Hay is harder to find. At least if you have a grain crop that is half the yield, the prices are double what they normally are so you can still profit. But for the cows, it’s a live animal that needs the same amount of food and they’re just not getting it. So lots of them are going into the market,” Davis said.
“Some people are holding on to their cows. People who have enough pasture and hay and corn, I guess. A lot of farms in the area ended up harvesting some of their crops to feed their cows this year. Even canola—baling things that they wouldn’t normally feed to cattle because they don’t have another option and they don’t want to sell.”
Commodity prices are never stable, but Davis says prices for cereals, pulses, and oilseeds look good for the next little while. “The export market is strong,” she said.
For many producers, the bottom line for profitability may depend on other factors. “We’ll see what happens,” Davis said. “For example the oil price is affecting things, and so is the dollar. Other circumstances will often come into play.”