Nervous times
Canola crops behind, at risk of early frost
Joanne Paulson
The StarPhoenix
Thursday, July 31, 2008
Saskatchewan's canola crop is blooming beautifully, but it is at higher risk than usual of an early killing frost, says commodities expert Larry Weber of Weber Commodities.
"In the northeast country, there's phenomenal crops. However, they are seven to 10 days behind," he said.
"If we had a frost like we did Aug. 19, 2004, or Aug. 2, 2002, we're done. We need five weeks with no frost."
A late, cool spring has put canola -- as well as some other crops -- behind in the ripening process.
There has also been substantial hail damage in the south, added Weber. On the bright side, the Bertha Armyworm -- one of canola's worst insect enemies -- should not be a serious issue this year. Moth counts as of July 16 are low over most of Saskatchewan's canola-growing area.
Weber says canola is becoming the west's most important crop, because of the cash flow it can generate.
"We haven't even begun to see the demand," said Weber, noting that two new plants at Yorkton and Cargill's new expansion will add 2.84 million tonnes in crushing capacity. Adding together crushing and exports, demand for Prairie canola will rise to 12.14 million tonnes by 2010.
This year's Prairie yield will be about 9.5 million tonnes, if all goes well, Weber predicts.
Canola prices have fallen during the last few months. In March, farmers could have locked in at more than $17; now the price is $12.90 per bushel.
"That's a big hit," said Weber.
Still, canola is well up from five years ago, when it brought only $7.46 per bushel.
The price has fallen recently for a couple of reasons.
"In March we were still waiting for South American crops to come to the market, and there was a farmers' strike in Argentina," said Weber.
It also looked like Australia was going to have another crop failure, but rain finally began to fall on the Australian crops.
But Weber sees canola as having a great future.
"I don't think we've even begun to see the health benefits of canola oil," said Weber.
"The health craze will even propel the demand (further). The canola industry is going to be so exciting."
jpaulson@sp.canwest.com
© The StarPhoenix (Saskatoon) 2008
