September 27, heavy snow was forecasted to bury a large portion of Alberta and farmers raced to harvest what they could. Previous to this, the growing season has been plagued with a late start, cool temperatures, extreme weather events, and wet conditions which has delayed the progression of plant growth and now the harvest. What remains in the fields after the snow will be affected in quality and may become unfit for human consumption. Conditions like these have been worsening for two years, especially across the globe. This has the potential to see prices rise in all categories outside of fruits and vegetables within the Canada Food Price Index.
Alberta Crop Report
The Alberta Crop Report (ACR) reports that as of Sept.14, harvest across Alberta stands at 17.7%, well under the 5yr avg of 31.3% (Alberta Government, Crop Report as of September 17, 2019, Para 2). Note, the ACR is a report of total crop production which includes most major crops. Beginning in late August, harvesting has been slowed due to cool and wet conditions across the province.
With freezing temperatures and forecasted snow loads across much of the province, what is still in the fields will affect the quality. The September 23 Alberta Crop Report was released last Friday (Sept.23), noting that only 32.6% of crops were harvested provincially and in the southern region almost ¾ harvested (Shooshtarian, 2019, para.2).
This time of harvest signals a couple of indicators. The maturation of crops has resulted in loss of quality due to late start and cool temperatures (Alberta Agriculture, 2019, Para.2). Discussion among agriculture and growing circles comment on the lack of heat during the night throughout the growing season. Though temperatures are warm during the day, temps during the night retard plant growth if they are not above 10 degrees Celsius (Personal Communications, 2019). This can be quantified into this equation which is called Growing Degree Days.
Simply put, there has not been enough heat to sustain plant growth which is predictable when heat is a constant factor during the growing season. As mentioned in previous blog posts, early corn offerings were in doubt because of delayed plantings and cool weather. Wheat has these same concerns in discussions about the progress of the crop. As of September 19, it was estimated that corn need two weeks of good temperatures to fully mature and this has not happened (Glen, 2019, para.4).
In transportation, crops are transported from the fields to manufacturers by trucks and trains. This entails contracts for delivery of crops and in anticipation of the expected numbers estimated at the beginning of September (Cross, 2019, para.3). Transport set aside for crop delivery are not being utilized by the estimated numbers.
In supply, canned products are looking at reduced numbers in the United States. Due to the low numbers in production fruit and vegetables for canning, there is a glut of cans which is a troubling sign (Tita, 2019, paras.1-2).
Mid season produce began to come into the food supply and led to a small decline in the Canada Food Price Index from 4.8% to 4.6% (Statistics Canada, 2019, Table 18-10-0004-03). Reduced corn and wheat production estimates will certainly reverse that number and see it climb higher.
In the Canada Food Price Index, prices for food, specifically fresh fruits and vegetables have been elevated over the last year. Wheat and corn, used in most processed foods, are certain to spike prices across all categories later this year. This bump will soon be evident in the pocketbook and impact those who are on fixed incomes or with limited financial means.
These last two years have seen extreme weather trend negatively impacting food production, leading to a slow boil of food prices. This trend is not specific to our region but planet wide. As our world population increases driving the need for more, it is not unreasonable to think that we are perhaps at the cusp of a food crisis. If climatic change do not stabilize or reverse, it is time to think about adaptations.
Alberta Agriculture (2019, September 20). Harvest restarts in Alberta, late progress seen in all regions. Alberta Farm Express. Retrieved from https://www.albertafarmexpress.ca/2019/09/20/harvest-restarts-in-alberta-late-progress-seen-in-all-regions/
Cross, B. (2019, September 25). Delayed harvest slows grain movement. The Western Producer. Retreived from https://www.producer.com/2019/09/delayed-harvest-slows-grain-movement/
Glen, B. (2019, September 19). Alberta corn crop behind schedule. The Western Producer. Retrieved from https://www.producer.com/2019/09/alberta-corn-crop-behind-schedule/
Shooshtarian, A. (2019, September 20). Alberta Crop Report. Retrieved from the Alberta Government website: https://open.alberta.ca/dataset/af95ff5b-f8cc-4fd9-9bd6-e2642816028e/resource/e29f8c64-18ec-4fbe-8dd3-441987083c13/download/af-crop-report-2019-09-17.pdf
Shooshtarian, A. (2019, September 20). Alberta Crop Report. Retrieved from the Alberta Government website:
Tita, B. (2019, September 9). Poor Vegetables Crop Dents Demand for Tin Cans. The Wall Street Journal. Retrieved from https://www.wsj.com/articles/poor-vegetable-crop-dents-demand-for-tin-cans-11568030401
Trading Economics (2019) Canada Food Inflation Forecast [Photograph]. Retrieved from https://tradingeconomics.com/canada/food-inflation#forecast
Extreme Corn and Wheat Losses
Production continue to be plagued by difficulties due to extreme weather events across the globe. Australia has become a net importer rather than an exporter of grains due to extreme weather and drought (Sullivan, 2019, para.6). China has been experiencing agricultural difficulties (Gu & Woo, 2019, paras.7-8), requiring it to invest in agriculture infrastructure in South America, Southeast Asia, and Africa (Filipova, 2018, para.3). Cool weather in the east has delayed or will result in lowered numbers for produce later next month.
Setting the stage.
U.S. wheat has experienced the worst harvests in a century going the last two years (Kennedy, 2019, paras.7). Though we have focused on wheat, corn is beginning to see negative numbers due to conditions during the winter and into spring.
Conditions over the winter produced extreme cold conditions decimating winter wheat and incurring a large snow load. Spring with a heavy snow and rain load resulted in flooding which delayed wheat and corn plantings in one of the key growing bread baskets of North America.
The floods in the Midwest resulted in the destruction of agriculture infrastructure, adulteration of carry over stocks, equipment loss, and delayed planting (Fatka, 2019, para.4). The USDA chose not to survey the losses and this led to confusion about projected figures from the current August WASDE (Nelson, 2019, para.9).
Close to home.
Wheat and corn losses are adding up, which began earlier this year with the harvest in the Southern Hemisphere and continuing into the coming harvest in the Northern Hemisphere. Food producers are seeking to fill their storage ahead the report and offering premium prices for available corn reported among conversations online.
After the release of the August 12 WADSE, the impact of the flooding was not factored in and as a result the markets reacted. One result is pig farmers are feeding their stocks with alternative sources of food like pastries not fit for human consumption (Polansek, 2019, para.1).
Crop Loss Map, Ice Age Farmer August 2019.
Wheat and corn losses are adding up, which began earlier this year with the harvest in the Southern Hemisphere and continuing into the coming harvest in the Northern Hemisphere. The U.S. harvest numbers will show continuing losses and recent Statistics Canada numbers are also predicting falling numbers (Turner, 2019,StatsCan August Production Survey Results, paras.1-3).
Corn is: used for feed which means meat is going to become more expensive, for fuel with ethanol meaning higher costs for transportation, and is used in virtually all processed foods. With this in mind, it is likely that food categories outside of produce will rise in price soon. Increases will soon be felt and observed in the food price index soon and we will expect this trend.
Bala, J. (2019, August 8). Alberta hail storm forces early end to Taber corn season. Global News. Retrieved from https://globalnews.ca/news/5744243/alberta-weather-hail-storm-taber-corn-season/
Burr, B. (2019, August 10). Reactions To Alberta’s Cancelled Cornfest News Are So Painfully Alberta. Narcity. Retrieved from https://www.narcity.com/news/ca/ab/taber-corn-crops-destroyed-in-crazy-hail-storm-photos
Gu, H & Woo, R.(2019, August 11). RPT-Crop invaders: China's small farmers struggle to defeat armyworm. Reuters. Retreived from https://af.reuters.com/article/commoditiesNews/idAFL4N258012
Fatka, J. (2019, April 5). Flood damage may be upwards of $12.5b in losses. Feedstuffs. Retrieved from https://www.feedstuffs.com/news/flood-damage-may-be-upwards-125b-losses
Filipova, V. (2018, February 26). China started to buy land aggressively agriculture land abroad. FarmLandGrab. Retrieved from https://farmlandgrab.org/27910
Kennedy, M. (2019, June 9). HRW Wheat Begins New Crop Year. Progressive Farmer. Retrieved from https://www.dtnpf.com/agriculture/web/ag/columns/cash-market-moves/article/2019/06/10/hrw-wheat-begins-new-crop-year-3
Nelson, K. (2019, August 18). Bearish shock to corn in August’s WASDE report. The Messenger. Retrieved from https://www.messengernews.net/news/local-business/2019/08/bearish-shock-to-corn-in-augusts-wasde-report/
Opinko, D. & Goulet, J. (2019, August 7). UPDATE: Crops wiped out at Molnar’s Taber Corn following Tuesday night storm. LethbridgeNews Now. Retrieved from https://lethbridgenewsnow.com/2019/08/07/update-crops-wiped-out-at-molnars-taber-corn-following-tuesday-night-storm/
Opinko, D. (2019, July 19). Taber corn will likely arrive a little late this summer. LethbridgeNews Now. Retrieved from https://lethbridgenewsnow.com/2019/07/19/taber-corn-will-likely-arrive-a-little-late-this-summer/lethbridgenewsnow.com/2019/07/19/taber-corn-will-likely-arrive-a-little-late-this-summer/
Polansek, T. (2019, August 2). Corn is so expensive that U.S. farmers are feeding their pigs baked goods and pet food. Financial Post. Retreived from https://business.financialpost.com/commodities/agriculture/u-s-cows-and-pigs-gorge-on-bakery-rolls-pet-food-as-corn-prices-surge
Sullivan, K. (2019, May 14). Australia approves foreign grain imports for the first time in over a decade. ABC News Australia. Retrieved from https://www.abc.net.au/news/rural/2019-05-15/australia-approves-grain-imports/11113320
Turner, B. (2019, August 28). AUG.28 - STATSCAN SAYS SMALLER CANOLA & WHEAT HARVEST. Farmlead. Retrieved from https://farmlead.com/blog/breakfast-brief/aug-2019-statscan-wheat-harvest/
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