Canola market thriving

Yellow may not be the favourite colour of most people.

Yellow may not be the favourite colour of most people.

But with canola currently selling for around $14 a bushel, Prairie residents better get used to it.

“If I was to paint the Prairies, I’d paint them yellow,” suggested Harry Brook, a crop specialist at the Ag-Info Centre in Stettler. “I’m thinking we could have upwards of even 20 million acres of it in the Prairies.”

Terry Young, a director with the Alberta Canola Producers Commission who farms near Lacombe, has also heard the 20-million acre figure and believes it’s attainable.

“Historically, these are very attractive prices,” he said.

The values of other crops are also relatively high, but they don’t compare with canola. At $13 a bushel, calculated Brook, a canola crop that yields 40 bushels to the acre would generate $520. Even if input costs hit $350, the farmer would pocket $170.

“Which is phenomenal,” he said.

“Either the prices of other crops have to come up to make them more competitive, or the price of canola drop.”

As it stands now, many producers are looking to seed as much canola as they can. Some have been asking Brook about shortening their crop rotations — which normally consist of three or four years between canola crops — to two years.

That increases the likelihood of disease and insect infestation, including the dreaded clubroot. But many farmers are willing to take this risk.

“How do you fight with the economics of the situation?” asked Brook.

Young thinks rented land, where those farming often place a higher priority on production and profit than on land stewardship, could be particularly vulnerable. Such practices are a recipe for problems down the road.

“From the Canola Commission’s perspective, we would like a rotation that is sustainable for the long term.”

Despite the current strong incentive to plant canola, unexpected factors like adverse spring weather could undermine such plans, noted Young.

But for those who do get a crop in, Brook recommends locking in the current high prices for 10 to 20 per cent of their anticipated harvest.

“This is an ideal opportunity for producers to pre-price part of this year’s crop.”

Spring seeding is already underway in Southern Alberta, and Brook noticed that some local producers were “champing at the bit” during the recent stretch of warm weather here.

“Our recommendation is usually don’t seed until the soil temperature in the top two inches (five cm) is at least five degrees, maintained,” he warned.

“In Central Alberta, most people don’t seed until May anyway.”

Surface moisture is “decent,” noted Brook, but doesn’t extend far downward.

“There’s enough there to get a crop going, but it does mean we’re going to need some timely rains in May and June.”

For now, there’s still the potential for a good growing season. And with favourable ag commodity prices, farmers should be able to take advantage.

“We see fairly strong livestock and crop prices at the same time, which is uncharacteristic because usually there’s an inverse relationship,” observed Young.