New-Crop Planting Decisions More Difficult?

New-crop planting decisions are always difficult, but 2019 may present its own unique set of challenges.

Weather vagaries in other parts of the world and global trade disruptions mean there will be more factors – some of them political - for farmers to take into consideration before heading to the fields to plant next year’s crop.

“When you have a lot of political interference, it's no longer the supply and demand balance that you look at as much,” admitted Marlene Boersch of Mercantile Consulting. “You're trying to second guess what some of the tariff barriers will do. Similar to what we have seen on pulses in India for example; that has big implications as well.”

Although the U.S. and China seemingly made some progress toward resolving their trade differences over the weekend at the G-20 Summit, there’s still the potential the ongoing spat between the two countries will result in sharply fewer U.S. soybean acres in 2019. If that in fact occurs, it will have implications for corn, wheat and other crops as well as producers seek out other alternatives.

“It's very difficult to decide where this all is going,” Boersch said. “That obviously also has implications on where the futures prices go and what signals the farmers are taking from that.”

Meanwhile, droughts in Australia and India will also affect the global supply-demand dynamics for such crops as wheat, peas and lentils, although to what extent still remains uncertain.

India also still has import tariffs in place for peas and lentils, intended to keep lower priced foreign supplies out and encourage larger domestic production.

But even with all the uncertainty on the global stage, Neil Townsend of FarmLink Marketing Solutions said he’s not expecting widespread or wholesale changes in what Canadian farmers plant in 2019 versus a year earlier.

“When you're talking about Canadian farmers, a large part of what they do is kind of dictated by a rotation. So, they don't actually have as many swing acres as maybe people think they have,” Townsend said.

Regardless, Townsend said current weak prices mean 2019 durum acres will decline from this year, with some of that extra ground being dedicated to spring wheat. Oat, barley and fall rye prices look reasonably attractive, which should more acres into those crops well, he said.

In addition to the potential for higher pulse acres, Boersch said she expects Prairie farmers will continue their longstanding relationship with canola.

“Canola isn't moving quite as well as last year but you still can make some money with it,” she said.

Source: DePutter Publishing Ltd.

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