Canada’s Record Rains Cut Wheat Acreage to Three-Year Low

Photographer: Daniel Acker/Bloomberg

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Photographer: Daniel Acker/Bloomberg

For the first time in 47 years of farming, Giles Norek got 10 inches (25 centimeters) of rain within 48 hours on his Saskatchewan crops. Half of his 12,000 wheat acres were flooded by the late-June deluge, and the plants that weren’t killed are struggling to survive.

“All in all, it’s a pretty big disaster,” Norek, 63, said in a July 18 telephone interview from his farm in the rural municipality of Spy Hill. Even as the weather has been drier since, he’s not expecting damaged plants to recover. “Some of it isn’t going to make it. It isn’t going to become a good crop,” he said.

Widespread flooding after record rainfall in parts of the Canadian Prairies last month is exacerbating the outlook for smaller wheat seedings, which the government had already forecast would fall 7.4 percent this season. Municipalities in Saskatchewan and Manitoba declared a state of emergency after the June storms. The nation is the world’s third-largest exporter, trailing the U.S. and Australia.

“In a lot of areas, we’re hearing of some major losses,” Alyssa Mistelbacher, a market analyst with FarmLink Marketing Solutions in Winnipeg, Manitoba, said in a July 21 telephone interview. “Wheat production will fall, but to what degree, it’s hard to tell right now.”

Sowings will probably drop to 23.5 million acres, 9.8 percent smaller than a year earlier and the lowest since 2011, according to the average estimate in a Bloomberg News survey of seven analysts. The government forecast 24.1 million acres in June, before the worst of the rain.

Canola Acres

As many as 3 million acres in Saskatchewan and 2.5 million acres in Manitoba have been flooded and are unlikely to produce a crop, according to estimates from Saskatchewan’s government and Keystone Agricultural Producers. The nation’s canola plantings will decline to 19.1 million acres, down 5.8 percent from the government’s June forecast, and oat seedings will fall 6 percent, according to the analysts surveyed by Bloomberg.

Statistics Canada is scheduled to release its next crop forecast on Aug. 21 in Ottawa.

While warm, dry weather in July has allowed producers to return to the fields in southeastern Saskatchewan, some plants remain underwater. Half of the fall-cereal crops and 57 percent of spring cereals in Saskatchewan are behind their normal stage of development, the government said in a July 17 report.

Farmer Losses

Manitoba farmers may lose C$1.1 billion ($1.02 billion) from the recent rain and flooding, according to Keystone Agricultural Producers, a Winnipeg-based farm group. As much as C$500 million of those losses may not be covered by existing insurance programs, Doug Chorney, the president of Keystone, said July 18. Farmers who filed claims for excess moisture in 2011 are now paying higher deductibles for less coverage, and programs currently only cover between 50 percent and 75 percent of losses on seeded and unseeded acres, he said.

The outlook for a second straight bumper global wheat crop may limit price gains for Canadian farmers looking to recoup part of their losses. World inventories next year will rise 2.8 percent to the highest since 2012, according to the U.S. Department of Agriculture. Futures tumbled 13 percent this year to $5.2475 a bushel at 11:07 a.m. in Chicago.

Walter Finlay is still knee-deep in water three weeks after torrential rains flooded almost a third of his 3,000-acre farm in Manitoba, where he grows wheat and canola. He’s unable to spray more than half of his crop for weeds because his equipment keeps getting stuck in thick, wet mud.

To access parts of the farm, “I have to go through water,” Finlay, 61, said yesterday in a telephone interview from his farm near Souris, Manitoba. “Some of it is three or four inches. Some if it is two feet.” The rains have “stunted” the wheat crops, and “it’s still not a healthy green color in lots of cases, because of the excess water,” he said.

To contact the reporter on this story: Jen Skerritt in Winnipeg at jskerritt1@bloomberg.net

To contact the editors responsible for this story: Millie Munshi at mmunshi@bloomberg.net Patrick McKiernan

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