Canada Grain and Feed

An Expert's View about Crops and Support Services in Canada

Posted on: 9 Mar 2010

Due to favorable conditions during the harvest season the forecasts for Canada’s 2009/2010 grain crops increased but the crops, the total of 48.4 MMT for wheat, barley, corn and oats, are still down about 7 MMT compared to the previous year. Total wheat (excluding durum) is estimated at 26.5 MMT with exports totaling 18.5 MMT.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: 2/5/2010 GAIN Report Number: CA0005 Canada Grain and Feed Update Grain and Feed - January 31 Lock-up Report Approved By: Robin Tilsworth Prepared By: Robin Gray Report Highlights: Due to favorable conditions during the harvest season the forecasts for Canada?s 2009/2010 grain crops increased but the crops, the total of 48.4 MMT for wheat, barley, corn and oats, are still down about 7 MMT compared to the previous year. Total wheat (excluding durum) is estimated at 26.5 MMT with exports totaling 18.5 MMT. Barley production dropped almost 20 percent to 9.5 MMT due to reduced area and weather induced lower yields. Exports are forecast to remain flat at about 1.5 MMT with lower U.S. demand expected to be offset by increased demand from China. Corn also suffered from lower yields with production forecast at 9.56 MMT in 2009/2010 and imports are forecast flat at 1.8 MMT. Canadian growers responded to the oversupply of oats by reducing acreage and production to 2.8 MMT. The flush international market is forecast to curb oat exports to 1.6 MMT, or down almost18 percent in 2009/2010. 1 Post: Commodities: Ottawa Wheat , Barley, Corn, Oats Executive Summary: Based on new data from Statistics Canada Post revised the wheat (excluding durum) 2009/2010 production estimate up to 26.5 MMT off 9.5 million hectares. Exports are currently forecast to decrease to 18.5 MMT in 2009/2010 due in part to lower supplies and slightly lower world demand. Barley production is estimated to have fallen to 9.5 MMT, a 19 percent drop from the previous crop year?s level, and 23 percent below the 10-year average. This drop is due to lower yields and higher abandonment rates resulting from poor weather conditions. Barley exports for marketing year 2009/2010 barley are forecast at 1.5 MMT, nearly the same as the previous year?s level. Corn production in 2009/2010 is forecast at 9.56 MMT. Imports of corn are expected to remain flat at 1.8 MMT. Feed consumption of corn is expected to drop slightly, reflecting the downsizing and restructuring that is on-going in the Canadian hog industry. Oats production is estimated to have fallen to 2.8 MMT due to lower area planted and higher rates of abandonment caused by poor growing conditions. Despite this reduction in supplies, the oats market remains flush and exports are expected to decrease further from about 1.9 MMT in 2008/2009 to 1.6 MMT in 2009/2010. Agriculture Canada published the final production report for 2009 on December 3, 2009 and its latest Cereals and Oilseeds Review on December 18, 2009. The production estimates for the 2009/2010 crop year in these reports are mainly based on Statistics Canada?s annual November Farm Survey of 27,900 farmers conducted from October 23, 2009 to November 16, 2009. Prairie farmers reported harvesting a smaller area of the major grains and oilseeds. The 2009 growing season was difficult for many Prairie farmer. Prolonged cool temperatures and a late frost in the spring negatively impacted seeding progression. As well, dryness in many western areas and excess moisture and flooding in eastern regions delayed crop emergence. Throughout the summer, cool conditions slowed crop development, leading to frost threats as harvest approached. However, sunny and dry weather in September allowed most crops to reach maturity with a substantial improvement in yield and quality. After rain and snow throughout much of October, November brought unseasonably warm weather, allowing farmers to finish harvesting most crops and to complete fall field work. Feed grain production was down in all three Prairie Provinces as a result of declines in production of barley, oats and dry peas. WHEAT 2 Highlights for 2009/2010 Post revised the wheat (excluding durum) 2009/2010 production forecast up to 26.5 MMT off 9.5 million hectares based on the most recent reporting by Statistics Canada. The increase in the production level, compared with Post?s previous forecast, is due to improved weather conditions in the fall which permitted a more successful harvest. Nevertheless, forecasted production levels in 2009/2010 continue to represent a drop in production from the previous year. This drop in production is due to a combination of factors including lower seeding rates due to the large carry-in stocks resulting from a bumper wheat crop the previous crop year and strong world wheat supplies, combined with lower yields and higher abandonment rates due to weather-related poor growing conditions. The drop in production is partially off-set by the large carry-in stocks, resulting in total supplies of 33.4 MMT, or about the same level as the previous crop year. Exports are currently forecast to decrease slightly to 18.5 MMT in 2009/2010 due in part to lower supplies and slightly lower world demand. Meanwhile the Canadian Wheat Board has set a target of 18.7 MMT based on expected demand for high quality/high protein Canadian wheat. Strong competition is expected to affect Canadian exports as world supplies remain high due to large carry- over stocks from the previous crop year. Feed wheat consumption in 2009/2010 is expected to drop back to about 2.5 MMT after a surge the previous year due in part to a shortage in forage that year. Ending stocks in 2009/2010 are expected to total close to 7.0 MMT, on par with the 5-year average. The November farmer survey and other reports prompted some adjustments in Statistics Canada?s final report for 2009. Canadian farmers harvest 26.5 million metric tons of wheat (excluding durum). This was a 7.3 percent decrease from 2008, but above the five-year average of about 20 million metric tons. Harvested area of non-durum wheat was down about 5 percent 2008 and yields were only slightly below the record high of 2.8 metric tons per hectare set in 2008. The late harvest aided by warmer fall weather prompted the increase compared to earlier forecasts. Prairie durum wheat production decreased 2.2 percent from 2008 to 5.4 million metric tons. Production was well above the five-year average of 4.7 million metric tons but still significantly below the record high production of 6 million metric tons set in 1998. Yield increased 5.8 percent from 2008 to 36.0 bushels per acre. Highlights for 2008/2009 3 Wheat exports in 2008/2009 are currently estimated at 18.7 MMT, 11 percent higher than the previous crop year. Low 2008/2009 carry-in stocks, due to a small 2007 crop and high exports in 2007/2008, were off-set by a large, good quality 2008 crop and made ambitious exports of 18.7 MMT possible. This higher pace of exports in 2008/2009 of the large wheat crop was aided by the fact that the recession led to grain facing less competition in rail transportation. Wheat for use in feed consumption increased substantially from the previous crop year at 3.1 MMT. The main reason for the increased feed consumption of wheat was due to poor forage conditions spurring demand for other feed sources. Reflecting the large crop increase carry-out stocks are estimated at almost 6.6 MMT, up significantly from the previous year level of 4.4 MMT. BARLEY Highlights for 2009/2010 Barley production is expected to fall to 9.5 MMT, a 19 percent drop from the previous crop year?s level, and 23 percent below the 10-year average. This drop is due to lower yields and higher abandonment rates resulting from poor weather conditions. Close to average carry-in stocks will help off-set the drop in production so that supplies will only decrease to 11.9 MMT, 11 percent lower than the previous crop year. Barley exports for marketing year 2009/2010 are forecast at 1.5 MMT, the same as the previous year?s level. Initially, post anticipated a decrease due to lower domestic supplies and the demand for feed barley from the United States remaining low due to higher U.S. supplies of corn. However, an increase in demand from China is likely to drive Canadian barley exports higher than originally anticipated. Domestic consumption of feed barley is expected to decrease slightly to 7.4 MMT in 2009/2010 due to lower supplies, higher prices, and an anticipated decrease in livestock numbers as the Canadian industry continues to downsize and restructure. Anticipated lower supplies will pull stocks down to well below the five year average. Carry-out stocks are forecast at 1.7 MMT. Highlights for 2008/2009 Barley exports in 2008/2009 marketing year fell short of initial expectations. Barley exports are estimated at 2.3 MMT, significantly short of the previous year?s level of 3 MMT. This drop in exports is due to a drop in demand for feed barley by the United States. Canadian feed use jumped 17 percent as poor weather conditions hurt forage production, leaving livestock producers in western Canada to seek out additional feed grains. Feed consumption of barley is estimated to have reached almost 7.7 MMT in 2008/2009. Carry-out stocks are forecast at 2.3 MMT, on par with the 5-year average of 2.4 MM. CORN 4 Highlights for 2009/2010 Based on the Stats Canada data the estimate for corn production at 9.5 MMT is about 1 MMT below the 2008/2009 crop. The reduction is due primarily to lower yields due to poor weather. Imports of corn are expected to remain flat at 1.8 MMT. Feed consumption of corn is expected to drop slightly to 7.5 MMT, reflecting the downsizing and restructuring that is on-going in the Canadian hog industry. Corn for industrial usage is expected to increase as several corn ethanol plants in Ontario come on-line in 2010. Carry-out stocks, at 1.1 MMT, are forecast significantly lower than the previous year?s level of almost 1.9 MMT. Highlights for 2008-2009 Corn imports in 2008/2009 are estimated at 1.86 MMT, higher than originally estimated, but still significantly lower than the 10-year average of 2.4 MMT due to the availability of domestic corn and barley for feed purposes, and ample supplies of Canadian corn for industrial usage. In 2008/2009 corn for feed purposes is estimated to have fallen to 7.6 MMT from 10.2 MMT in 2007/2008, representing a return to more average consumption levels. Due to a stable demand from ethanol plants located in the province of Ontario, the domestic consumption of corn for industrial purposes remains significantly above the 5-year average of 2.7 MMT at 4.1 MMT. Carry-out stocks are forecast at 1.85 MMT. OATS Highlights for 2009/2010 Oats production is estimated to have fallen to 2.8 MMT due to lower area planted and higher rates of abandonment caused by poor growing conditions. This drop in production is expected to reduce supplies to 4.3 MMT compared to the availability of over 5 MMT in the last several seasons. Despite this reduction in supplies, the oats market remains flush and exports are expected to decrease further from about 1.9 MMT in 2008/2009 to 1.6 MMT. Expected lower supplies will draw down stocks, resulting in carry-out stocks for 2009/10 being forecast at 1.1 MMT. Highlights for 2008/2009 In 2008/2009, oats exports are currently estimated to have decreased to about 1.9 MMT, which 5 represents a nearly 19 percent decrease from the previous year?s oat export level. High supplies and low prices resulted in a standoff that suppressed exports. Producers continued to hold onto supplies as they held out for a higher price, but buyers had adequate supplies. This decreased exports resulted in higher carry-out stocks which are estimated at 1.5 MMT. WHEAT 2007 2008 2009 Canada 2007/2008 2008/2009 2009/2010 Market Year Market Year Market Year Begin: Aug 2007 Begin: Aug 2008 Begin: Aug 2009 All data in USDA USDA USDA USDA USDA USDA 1,000 hectares, Official Official Official Official Official Official 1,000 metric tons Data Data Data Data Data Data Area Harvested 8,640 8,636 10,032 10,032 9,500 9,539 Beginning Stocks 6,865 6,865 4,406 4,406 6,556 6,556 Production 20,054 20,054 28,611 28,611 26,500 26,515 MY Imports 390 388 378 394 400 300 TY Imports 387 380 387 403 400 300 TY Imp. from U.S. 302 293 301 318 0 250 Total Supply 27,309 27,307 33,395 33,411 33,456 33,371 MY Exports 16,116 16,035 18,812 18,720 18,500 18,500 TY Exports 16,561 16,478 18,583 18,517 18,500 18,500 Feed and Residual 2,167 2,403 3,207 3,118 2,400 2,500 FSI Consumption 4,620 4,463 4,820 5,017 4,900 5,400 Total Consumption 6,787 6,866 8,027 8,135 7,300 7,900 Ending Stocks 4,406 4,406 6,556 6,556 7,656 6,971 Total Distribution 27,309 27,307 33,395 33,411 33,456 33,371 Statistical notes: HS codes for all wheat trade include 1001, 1101, 190219, 190230, 190240; conversion factor used for wheat products to grain equivalency is 1.368. BARLEY 2007 2008 2009 Canada 2007/2008 2008/2009 2009/2010 Market Year Market Year Market Year 6 B Begin: Aug Begin: Aug egin: Aug 2007 2008 2009 All data in USDA New USDA New USDA New 1,000 hectares, Official Post Official Post Official Post 1,000 metric tons Data Data Data Data Data Data Area Harvested 3,998 3,998 3,502 3,502 2,920 2,918 Beginning Stocks 1,491 1,491 1,568 1,568 2,843 2,340 Production 10,984 10,984 11,781 11,781 9,520 9,517 MY Imports 55 58 42 68 50 47 TY Imports 53 55 42 55 50 45 TY Imp. from U.S. 53 57 42 54 0 45 Total Supply 12,530 12,533 13,391 13,417 12,413 11,904 MY Exports 3,046 3,040 1,483 2,342 1,500 1,500 TY Exports 2,947 2,947 1,618 2,342 1,500 1,500 Feed and Residual 6,616 6,565 7,715 7,685 7,100 7,400 FSI Consumption 1,300 1,360 1,350 1,050 1,350 1,300 Total Consumption 7,916 7,925 9,065 8,735 8,450 8,700 Ending Stocks 1,568 1,568 2,843 2,340 2,463 1,704 Total Distribution 12,530 12,533 13,391 13,417 12,413 11,904 Statistical note: Barley trade numbers do not include products; conversion factor used for grain equivalency of barley products (malt) is 1.338688. CORN 2007 2008 2009 Canada 2007/2008 2008/2009 2009/2010 Market Year Market Year Market Year Begin: Sept 2007 Begin: Sept 2008 Begin: Sept 2009 All data in USDA New USDA New USDA New 1,000 hectares, Official Post Official Post Official Post 1,000 metric tons Data Data Data Data Data Data Area Harvested 1,370 1,369 1,169 1,169 1,400 1,142 Beginning Stocks 1,337 1,337 1,457 1,457 1,857 1,853 Production 11,649 11,649 10,592 10,592 9,560 9,561 MY Imports 3,182 3,182 1,843 1,862 2,000 1,800 TY Imports 3,117 3,080 1,844 1,862 2,000 1,800 TY Imp. from U.S. 3,081 3,073 1,844 1,862 0 1,800 Total Supply 16,168 16,168 13,892 13,911 13,417 13,214 MY Exports 942 910 372 331 300 300 TY Exports 944 949 366 327 300 300 Feed and Residual 10,184 10,218 7,533 7,594 7,500 7,500 FSI Consumption 3,585 3,583 4,130 4,133 4,300 4,300 Total Consumption 13,769 13,801 11,663 11,727 11,800 11,900 Ending Stocks 1,457 1,457 1,857 1,853 1,317 1,114 Total Distribution 16,168 16,168 13,892 13,911 13,417 13,214 Statistical note: Corn exports and imports do not include products. OATS 2007 2008 2009 Canada 2007/2008 2008/2009 2009/2010 Market Year Market Year Market Year 7 Begin: Aug 2007 Begin: Aug 2008 Begin: Aug 2009 All data in USDA New USDA New USDA New 1,000 hectares, Official Post Official Post Official Post 1,000 metric tons Data Data Data Data Data Data Area Harvested 1,816 1,816 1,448 1,448 950 948 Beginning Stocks 556 556 950 950 1,527 1,527 Production 4,696 4,696 4,273 4,273 2,800 2,798 MY Imports 17 17 16 17 15 15 TY Imports 17 17 14 15 15 15 TY Imp. from U.S. 17 17 14 14 0 15 Total Supply 5,269 5,269 5,239 5,240 4,342 4,340 MY Exports 2,386 2,384 1,942 1,942 1,700 1,600 TY Exports 2,321 2,319 1,789 1,888 1,700 1,550 Feed and Residual 1,293 1,298 1,110 1,107 900 1,050 FSI Consumption 640 637 660 664 650 600 Total Consumption 1,933 1,935 1,770 1,771 1,550 1,650 Ending Stocks 950 950 1,527 1,527 1,092 1,090 Total Distribution 5,269 5,269 5,239 5,240 4,342 4,340 Statistical note: Oat exports and imports do not include products; conversion factor used for grain equivalency of oat products is: 1.823051. 8
Posted: 09 March 2010

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