The Canadian agriculture industry experienced a series of mixed messages last week as the COVID-19 pandemic continued to influence the cogs and gears motoring the world’s economy. However, if Canadian producers in the prairies are enabled to seed and harvest as they normally would, the nation’s farmers will be harvesting their highly-valued products for eager international markets this autumn.
According to Rayglen Commodities, as most countries begin to self-isolate, there could be a spike in food purchases around the globe. In turn, value inflation in Canadian markets, as well as dollar deflation, will exhibit a robust sway over the prices of domestic and imported food products for some time to come. A rise in the prices of standardized goods and services over a lengthy period of time might result in price upsurges in food, perhaps long after the coronavirus has been tamed.
Producers could feel a slight bit of confidence as the 2020 growing season begins, with the worldwide food supply demanding instantaneous restocks, but there are still many unresolved factors to be addressed. Yet producers can have an immediate sense of relief, since Canada’s financial system has seen rapid support from the Bank of Canada in the interim, after Governor Stephen Poloz and the Governing Council delivered a .5 per cent interest rate cut on Friday, March 25.
"The pandemic-driven contraction has prompted decisive fiscal policy action in Canada to support individuals and businesses and to minimize any permanent damage to the structure of the economy," read the Bank of Canada’s statement.
However, even with the Bank of Canada’s support and the increased need for Canadian food products, certain farming necessities might be hard to acquire in 2020, which could turn this great year of possibilities into a troublesome time with a difficult growing season. For example, pesticides and herbicides might be in short supply in the coming months. Farmers in the United States told Reuters their regional farm co-operatives have cautioned customers in Iowa, Minnesota and Wisconsin about possible delays in the deliveries of herbicides and pesticides at the beginning of the season, since there might be fewer truck drivers to haul the chemicals stored in the south. A lack of transporters could also have a devastating effect on Canadian producers.
Reporting for MarketsFarm, Phil Franz-Warkentin said North America’s biggest farm suppliers were accelerating shipments of fertilizer, seeds and agricultural chemicals to the continent’s crop-growing regions in an extraordinary marathon as anxiety and panic ensued. Certainly, the effects of the coronavirus could threaten this year’s planting season in unprecedented directions.
Despite the mayhem created by the pandemic, prices have remained strong for most Canadian agricultural products in late March. Glen Hallick in MarketsFarm reported that canola contracts were steady to higher on March 27. Producers have delivered 406,800 tonnes of canola at the end of March, compared to 415,700 tonnes a week before.
Wheat prices slumped downwards to $5.50-$10 per tonne, according to appraisals compiled by Price and Data Quotes. Bids for Canada Prairie Spring Red Wheat were also lower, having sunk to $7-$12.50 per tonne. Prices for CPSR fluctuated from $198 per tonne in southeastern Saskatchewan to $218 per tonne in southern Alberta.
Chickpea markets gained strength at the end of March, as a slight rise in value meant a greater number of buyers were exhibiting interest. Niche markets were more appealing in opposition to mass exports, meaning the products being purchased were small in quantity and specific for sizing, according to information from Rayglen Commodities. Also, lentil markets were strengthening by March’s end, with buyers searching for all varieties and colours of lentils, from yellow to red.
In similarity with pulse crops, the nation’s barley markets were also responsive with strengthening prices across the board. In accordance, bids on old and new crops from western Saskatchewan and eastern Alberta rose on the markets. Rayglen Commodities supposed this boosted interest in Canadian barley might’ve been related to the weakening dollar.