StatCan crop estimates continue to shrink

Western Canada’s 2021 grain harvest keeps getting smaller, according to the most recent production estimates from Canada’s national statistics agency.

Last week, Statistics Canada released its latest production estimates for principal field crops, updating Aug. 30 figures.

Estimates for nearly every crop were adjusted downward as the full impact of this summer’s drought comes into focus.

StatCan’s latest estimates, released Sept. 14, now project Canadian canola production at 12.782 million tonnes, down from 14.749 million tonnes two weeks earlier. If that estimate proves accurate, Canadian canola production will hit its lowest level in 13 years.

Canadian farmers produced 12.645 million tonnes of canola in 2008.

Some analysts believe actual canola production could drop below 12 million tonnes this year.

Other notable numbers from the Sept. 14 estimates include:

  • Total Canadian barley production at 7.14 million tonnes, down nearly 700,000 tonnes from Aug. 30 estimates, and the lowest production since 2014.
  • Total durum production at 3.545 million tonnes, down nearly half a million tonnes from Aug. 30 estimates and the lowest production since 2010.
  • Total spring wheat production at 15.321 million tonnes, down nearly 800,000 tonnes from Aug. 30 estimates and the lowest production since 2013.
  • Total oat production at 2.579 million tonnes, down roughly half a million tonnes from Aug. 30 estimates and the lowest production in more than a decade.
  • Projected lentil production at slightly more than 1.8 million tonnes, down nearly 200,000 tonnes from Aug. 30 estimates and more than a million tonnes lower than last year’s crop.

Statistics Canada’s latest production estimates are based on satellite imagery, which observes plant vegetation and assesses yield using NDVI (normalized difference vegetation index) technology.

“These methods have been successfully used for the past five years to produce September yield estimates and to replace July yield estimates beginning in 2020,” StatCan said.

“The Crop Condition Assessment Program indicates that overall plant health in Western Canada was lower to much lower than normal, having decreased considerably throughout August. This indicates the likelihood of lower than normal yields.”

The Sept. 14 estimate paints a bleak picture of Canadian grain and oilseed supplies, but some analysts believe Canada’s actual harvest volumes will be even lower.

StatCan’s next production estimates are due to be released Dec. 3.

Mike Jubinville, market analyst with Glacier MarketsFarm, said StatCan’s latest production estimates are coming into line with what many industry observers expected and numbers could be even lower in future estimates.

“We are progressively moving to smaller and smaller numbers as to what Canadian agricultural production is for the year,” Jubinville said.

“Are we fully there yet? Probably not, I suspect. I think we’re working on a trendline toward smaller numbers but I would suspect that going into the final report on Dec. 3, we’ll probably see some numbers even a bit smaller than this.”

Jubinville said the most recent StatCan production estimates are based solely on reduced yield. The satellite-based estimates failed to consider abandonment rates and discrepancies between vegetative growth and actual seed production.

“We definitely know that abandoned acres this year were higher than the norm and you have no reflection of that yet in the (Sept. 14) report.”

Jubinville described satellite technology as a snapshot from the sky that shows how green the ground is. However, the technology doesn’t necessarily capture the full story when it comes to aborted kernels in cereal crops or seed size and pod-filling in drought-affected oilseeds.

Regardless of final production figures, supplies of Canadian commodities will be drastically lower than last year, and some buyers will be forced to look elsewhere for alternatives.

Based on StatCan’s latest numbers, Canadian farmers will harvest 38 percent less wheat this year than last, 34.5 percent less canola, 33.5 percent less barley and nearly 44 percent less oats.

Jubinville said it will be a “herculean task” this year for markets to move prices to levels that discourage demand.

For some crops, that could mean steadily rising prices. For others, it could mean an upward price trend over a period of weeks and months, with significant periods of short-term price volatility.

“I can’t recall one year in my career… where we’ve had such a dramatic (change) in available supply for export,” Jubinville said.

“Canada’s cupboards are going to be bare. We just won’t have enough to meet (all of the demand).”