Drop in Acreage Impacting Canada Wheat Production-Global Output also Down

USDA forecasts Canadian wheat production to reach 20.5 million metric tons, down 6 million metric tons from last month. This 16 percent drop is due to a lower seeded area and higher than normal abandonment rate in the main wheat producing areas of Saskatchewan, Manitoba, and Alberta.

From May until mid June, the western provinces were cold and wet. Flooding and water logging in fields hindered planting. An estimated 83 percent of the wheat crop was planted or 17 percent was left unseeded because of excessive precipitation and below normal temperatures across the western Provinces. Because of this excessive moisture and below normal temperatures, provincial governments are reporting that crops which were planted are behind schedule and some are experiencing stress.

Statistics Canada June 2010 Preliminary Estimates of Principal Field Crop Areas reported from their spring survey that producers were planning to seed 9.2 million hectares in 2010 compared to 9.9 million hectares in 2009. USDA/FAS estimates that spring wheat was planted on 7.7 million hectares, down 15 percent from their June report. Saskatchewan, which was impacted the most by adverse weather, likely only seeded about 75 percent of their intended crop area. Alberta, second largest wheat producer, was only slightly impacted by excessively wet weather.

Although cold and wet conditions induced lower seeded area, producers had planned to plant less wheat this year than last. This lower planted area can be attributed to farmers anticipating lower wheat prices at the beginning of the season. Agri-Food Canada Grain and Outlook Report commented in both their May and July reports that the Canadian Wheat Board’s pool return outlook (CWB PRO) was 6 percent lower than for 2009-10 due to higher global supply. Farmers perceived during the beginning of the season that other crops such as canola were more profitable than wheat and barley.

 Global Situation

2010 global wheat production is forecast to drop by nearly 3 percent from a year ago. This decline is due to dry conditions impacting yields in the FSU and Russia and wet conditions across the western Canadian provinces that impacted planting. Wheat production by major producers is expected to decline: India (-2%), Russian (-14%), Pakistan (-6%), Canada (-23%), and Ukraine (-4%).  Production however is forecast to increase (3%) in the EU, whereas, in the U.S. production is forecast unchanged from the previous year.

Current USDA area and production estimates for grains and other agricultural commodities are available on IPAD's Agricultural Production page or at PSD Online.