Canadian Canola-Acreage Drop Seen as Short Term by GroupJen Skerritt
The decline in Canada’s canola acreage will be a “short-term phenomenon” as farmers shift some land to wheat, according to Rick White, the general manager of the Canadian Canola Growers Association.
Growers will seed 19.7 million acres of canola this year, down 8.3 percent from 2012 and the first decrease since 2006, Statistics Canada said in a report on June 25. The biggest decline will occur in Saskatchewan, where planting will fall 8 percent to 10.3 million acres, according to a government survey.
“I’m confident this is not a long-term trend because the demand for vegetable oil, and in particular canola oil, continues to grow,” White said in a telephone interview from Winnipeg. “There’s more demand out there than there is supply.”
Many farmers often plant canola because the crop is more-profitable than other commodities, White said. Higher wheat prices have prompted producers into a “more-reasonable crop rotation” to avoid a higher risk of disease and pests, he said.
Farm cash receipts for canola rose 1.9 percent to $2.23 billion in the first quarter of 2013 from a year earlier, government data show.
Canola futures for November delivery rose 0.4 percent to close at C$536.90 ($509.05) a metric ton today on the ICE Futures Exchange in Winnipeg. Earlier, the price touched $531, the lowest for a most-active contract since Feb. 8, 2012. The commodity has dropped 9 percent this year.