This year’s growing season in Canada, and particularly the prairies, was a real roller coaster. Farmers had to come to grips with the lower prices the 2023/24 marketing year brought along while facing challenging weather. Our July outlook highlighted the issues the Western crop was facing as it turned dry during pollination while Eastern Canada was having a better summer with higher yield potential. With most crops in the bin, we look at the year ahead and what could impact expected prices.
New marketing year prices are largely under the average of the past five years
In the 2023/24 marketing year, producers had to reduce their sales price expectations. For several years, prices have generally been higher than, and boosting, the 5-year average. However, new crop prices have now mostly fallen below their 5-year averages (Table 1) but remain well above pre-pandemic levels. In the upcoming marketing year, only feed barley and peas are expected to surpass their 5-year averages. Overall, in the three months since our July outlook, price forecasts have remained relatively stable.
Grain prices for corn, wheat, and barley are projected to remain steady next year, whereas oilseeds may face lower prices. Peas and lentils could experience price volatility due to trade risks.
Canadian crop production ends up near average after volatile summer
Although some Eastern Canadian producers are still harvesting, Statistics Canada's September 16th estimates predict another strong production year. Final survey-based production estimates for 2024 will be released on December 5, 2024, by Statistics Canada so there will still be changes to crop size. Corn and soybean crops should be similar in size to 2023 but above the 5-year averages (Table 2). Since crop planning began early this year, weak Ontario margins haven't changed much, as lower-than-expected prices were offset by higher yields.
Western Canada had a more volatile growing season. Prior to seeding we highlighted the extensive drought that correlated with lower yields, but fortunately crop saving rains came in May and June. By the start of July, satellite views of the crop were rated at its highest potential ever, but again the weather changed, and the taps turned off during the crucial pollination period. So, while 2024 turned out to be solid overall, it could have been a true bumper crop had rain showed up in July.
The biggest jumps in production in the Prairies come from a return to average yield for crops like lentils, peas, and durum. All of them are up sharply from last year and highlight how tough 2023 was. Barley production is down this year due to lower seeded acreage as yields were average. Production of canola and wheat are forecast to be down slightly from last year, but above the 5-year average. Crop margins in 2024 for a typical Saskatchewan canola and wheat rotation are unchanged from originally forecast in January, with the second year of losses in a row when including cash rent.
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