While there were producers who didn’t get a crop this year, overall, the impact of wet weather on farmers in Saskatchewan and Manitoba seems to be better than expected, according to Farm Credit Canada (FCC).
“A fair number of producers on the Prairies experienced major challenges this year due to wet weather in the spring. Fortunately, this fall’s warm and dry weather helped a lot of them out,” says FCC Prairie VP Derwin Arnstead. Arnstead manages operations in Saskatchewan and Manitoba.
Production in the Prairies is expected to be lower this year due to the reduced number of acres seeded and additional acres lost due to flooding. However, favourable weather in October helped fields to dry out and meant that harvest was largely completed prior to freeze up.
Despite the delayed harvest and lower production, the number of November 1 and December 1 loan payments that were past due in Alberta, Saskatchewan and Manitoba are similar to slightly lower than previous years.
“We know that late harvest and weather caused delivery issues for some grain and oilseed producers, and this timing may be a contributing factor to late payments,” says Arnstead. “A large percentage of our Prairie customers make semi-annual loan payments in November and December, so this is one indicator of how this year impacted farmers.”
Earlier this year in Saskatchewan, Manitoba and parts of Alberta, FCC proactively invited customers to discuss their individual situations in response to excessive moisture. Employees work with customers to tailor a solution to their situation, for example by deferring payments. To date, the proportion of customers requesting adjustments is similar to previous years when they experienced challenges due to weather.
“We are always so amazed by the pride our customers take in their business. So when they need help, we work with them on short-term solutions,” says Arnstead.
Statistics Canada expects that wheat and canola production in Canada will be 14.6 and 4.6 per cent lower respectively in the 2010-11 crop year as compared to 2009-10. Provincial specialists have reported average to above average yields for those crops that were harvested, at below average quality in most areas of the Prairies (with the exception of southern Alberta and the Peace region). The full extent of the impact on crop quality is not yet known.
As at the end of October 2010, FCC’s grain and oilseeds portfolio was $5.1 billion. Of that, approximately $2.9 billion is located in the Prairie provinces, $1.6 billion of which is in Saskatchewan.
From a more global perspective and longer term, FCC Senior Agriculture Economist Jean-Philippe Gervais says, “Economic trends continue to favour agriculture. Inflationary pressures are subdued here in Canada. Although central banks in emerging countries are considering actions to ease inflationary pressures in their economies, world demand for commodities is still supported by positive economic growth prospects abroad.”
