“Absent tariffs, profitability was already looking tight for the 2025-26 crop year,” wrote FCC senior economists Justin Shepherd and Graeme Crosbie.

“Considering the impact of tariffs (or potential tariffs) makes that outlook even more challenging.”

Western wheat and canola

FCC’s latest profitability estimates for Western Canadian wheat and canola showed average returns of $50 to $75 per acre, excluding the cost of land, and assuming average regional yields.

Shepherd and Crosbie noted the difficulty of predicting prices in the current trade environment and said there’s considerable downside risk to those estimates.

If prices saw a 15 per cent decline, it would result in a loss of $25 per acre on canola, and breakeven returns on wheat.

Canola futures had made gains from the start of the year before China announced it would impose 100 per cent tariffs on Canadian canola oil and meal. Nearby futures fell by more than 10 per cent compared to Jan. 1, FCC data showed.

In the past three weeks, canola futures have rebounded near to where they were to start the year.

Nearby wheat futures had gained nine per cent by mid-February compared to Jan. 1, but slid to hover around where they started.

Eastern soybeans and corn

FCC’s latest profitability estimates for soybeans and corn in Eastern Canada are around $375 per acre. This excludes the cost of land and assumes average regional yields.

If prices fell by 15 per cent, returns would fall to $240 per acre for corn and $280 per acre for soy.

Soybean and corn futures experienced similar trajectories to canola and wheat — rising in late January and February before dropping off in March. During that period, the emerging forecast for a large South American soybean crop pressured prices.

Will farmers change course?

Eastern farmers have historically stuck to their soybean, corn and winter wheat rotations, wrote Shepherd and Crosbie.

Statistics Canada estimated Ontario and Quebec farmers would plant 3.9 million acres of soybeans and 3.1 million acres of corn.

American farmers are expected to plant nearly five million more corn acres than last year, as global stocks-to-use are tighter relative to soybeans, Shepherd and Crosbie said.

Likewise, Western Canadian canola and wheat acres tend not to deviate much year to year — even between 2019 and 2022 when China restricted imports of Canadian canola seed.

Statistics Canada predicts 21.5 million acres of canola to be seeded in 2025 along with 19.1 million acres of spring wheat.

“We could see some ‘swing acres’ go into flax and lentils this year,” Shepherd and Crosbie wrote. “Our profitability estimates for 2024-25 and 2025-26 show these two crops as having decent returns.”

These crops have also historically seen more variation.

Manitoba could also see more soybean acres. These have tended to vary year-to-year, and potato acres may decline as potato buyers have been reportedly scaling back contracts.

Shepherd and Crosbie said that now, more than ever, it’s important to understand individual farm production costs.

“There will be volatility and, at times, opportunities to lock in returns. This is maybe truer in 2025-26 than in other years given prices are reflecting more geopolitical policy and less supply/demand fundamentals, and these policies can be implemented (or reversed) with the stroke of a pen.”

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Wheat

Total wheat area is expected to be up by 2.6 per cent on the year, at 27.475 million acres. StatCan cited strong global demand for high quality wheat as one factor behind the anticipated increase in wheat seedings. Of the total, durum area is forecast to hold relatively steady on the year at 6.367 million acres.

Canola

Canola area is forecast to slip by 1.7 per cent, to 21.646 million acres, which would be in line with trade estimates and the five-year average. Lower profitability for canola compared to other cropping options was seen as contributing to the reduced area.

Barley and oats

While Saskatchewan farmers expect to seed 3.7 per cent more barley this spring, area to the crop is expected to fall in Manitoba and Alberta leaving total Canadian barley acreage of 6.280 million acres down 2.0 per cent from 2024. Meanwhile, total oat plantings across the country are forecast to increase by 2.7 per cent to 2.978 million acres.

Soybeans and corn

Soybean seedings are forecast to dip by 1.3 per cent nationally, to come in at 5.635 million acres, while corn area is expected to increase by 3.2 per cent, to 3.769 million acres.

Ontario is the largest producer of both crops, with soybean area in the province forecast to decline by 7.8 per cent at 2.876 million acres. Ontario corn seedings are expected to increase by 5.0 per cent at 2.266 million acres.

Pulses

The early survey results point to a 9.5 per cent increase in Canadian pea acres in 2025, at 3.517 million acres. Meanwhile, lentil area is expected to dip by 0.8 per cent at 4.175 million acres.

—1 acre = 0.405 hectares

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Total canola area is forecast to dip by 3.1 per cent on the year, at 21.394 million acres. Lower prices and concerns over moisture levels in Western Canada were cited as reasons for the decline.

However, the survey was conducted in December and January, leaving plenty of time for intentions to shift. Canola prices have trended lower over the past two months, but dryness concerns have eased somewhat.

Total wheat area in the country is forecast to remain relatively steady on the year, up only 0.1 per cent from 2023 at 27.045 million acres. However, of that total durum area is forecast to rise by 5.3 per cent at 6.344 million acres while other spring wheat area is expected to decline by 3.1 per cent at 19.235 million acres.

Both the wheat and canola acreage projections were in line with trade expectations. While adjustments of a few hundred thousand acres here or there are possible, “a one- or two-bushel difference in average yields blows that all out of the water,” according to MarketsFarm analyst Mike Jubinville, noting that weather conditions through the growing season will be the more important factor going forward.

Barley area in the country is forecast to be down by 2.5 per cent on the year while oats area should rise by 21.6 per cent, at 7.134 million and 3.072 million acres respectively, according to StatCan.

Soybean area is forecast at 5.582 million acres, which would be down by 0.9 per cent on the year, while corn seedings are forecast to increase by 1.6 per cent at 3.885 million acres.

Lentil area is forecast to increase by 4.4 per cent at 3.829 million acres, with field pea area expected to be up by 2.4 per cent at 3.122 million acres. Both pulses came in below average trade expectations.

The following table is a recap of Statistics Canada’s March acreage report. Pre-report expectations are provided for comparison purposes. Figures are in million acres.

*All wheat includes spring wheat, durum wheat, and winter wheat remaining after winterkill.

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“For 2024/25, rotation considerations, moisture conditions, expected prices and input costs/availability are expected to the main factors determining seeding decisions in the spring. The average yield and production for most crops is forecast to increase year-over-year based on a return to trend yields, assuming normal weather conditions,” AAFC stated in its report.

For Canada’s largest pulse crops, dry pea production was pegged at 3.1 million tonnes for 2024/25, up from this year’s 2.61 million, and lentils increased to 2.2 million tonnes from 1.67 million.

AAFC cited more planted area in 2024/25 as the reason for the gains. Dry peas were projected to rise to 3.21 million acres compared to 3.05 million in 2023/24, and lentils were set to expand to 3.95 million acres from 3.67 million.

Exports saw slight upticks, with dry peas inching up from 2.3 million tonnes in 2024/25 from this year’s 2.2 million, and lentils nudged up to 1.8 million tonnes to 1.6 million.

Domestic usage remained small, with AAFC keeping their numbers relatively steady. Dry peas were projected at 700,000 tonnes from the 676,000 in 2023/24 and lentils went to 265,000 tonnes from 263,000.

There were notable changes in ending stocks, as AAFC upped their forecast in dry peas to 400,000 tonnes from the 270,000 in 2023/24. That for lentils was more than quadrupled, with AAFC calling for 260,000 tonnes in 2024/25 from a mere 50,000 this year.

In terms of prices dry peas have seen some significant increases over the week, with Prairie Ag Hotwire noting a 75-cent-per bushel spike for green peas in Western Canadian at C$14 to C$18.75/bu. delivered as of Jan. 22. Yellow peas across the region rose 31 cents at C$11.52 to C$12.75/bu.

Prairie Ag Hotwire noted lentils during the week were steady to higher, depending on the variety. Regardless of size, Lairds were up three cents a pound, ranging from 56 to 75 cents/lb. delivered, while Richleas gained one to four cents at 50 to 73 cents/lb. Also, Crimsons were steady to up two cents at 25 to 37.4 cents/lb and Estons held steady at 49.5 to 66 cents/lb.

— Glen Hallick reports for MarketsFarm from Winnipeg. 

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“For 2024/2025, rotation considerations, moisture conditions, expected prices and input costs/availability are expected to be the main factors determining seeding decisions in the spring,” said AAFC in its report, adding “The average yield and production for most crops is forecast to increase year-over-year based on a return to trend yields, assuming normal weather conditions.”

Citing lower prices and ample global supplies, AAFC forecasts a three per cent decline in non-durum wheat area ant 8.248 million hectares. Durum plantings were forecast to hold relatively steady at 2.477 million hectares. However, total wheat production in 2024/25 is forecast to increase to 33.296 million tonnes, from 31.954 million in 2023/24 due to an expected increase in yields. Canadian wheat exports are forecast to rise to 24.350 million tonnes in 2024/25, from an estimated 23.200 million in the current marketing year.

The total wheat carryout is forecast to rise to 4.200 million tonnes by the end of the 2024/25 marketing year, which would be up from the 3.950 million tonnes projected for 2023/24 and the 3.658 million tonnes seen in 2022/23.

Seeded canola area was forecast at 8.800 million hectares, which would be down slightly from the 8.936 million hectares planted the previous year. Canola production is forecast at 18.365 million tonnes, which would be in line with the 18.328 million tonnes grown in 2023/24. Canola exports were forecast to hold steady at 7.700 million tonnes, with ending stocks dipping to

1.400 million tonnes from a projected 1.450 million tonnes in 2023/24.

Barley is also forecast to see a smaller acreage base but increased production, while oats area and production are both forecast to increase in 2024/25. Total barley production is expected to rise by four per cent, at 9.280 million tonnes, while the oats crop could be up by as much as 41 per cent, at 3.705 million tonnes.

Pea, lentil, and chickpea plantings are all expected to be up on the year, with increased production and yields also likely. Pea production is forecast to increase by 19 per cent, at 3.100 million tonnes, while lentil production of 2.200 million tonnes would be up by 32 per cent.

— Phil Franz-Warkentin is an associate editor/analyst with MarketsFarm in Winnipeg. 

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Total canola plantings were estimated at 22.1 million acres by the government agency, which compares with the 21.6 million expected in April and the 21.4 million seeded in 2022. That came in above average trade estimates which had generally called for a smaller increase on the year.

Total wheat area, including durum and winter wheat remaining after winterkill, was pegged at 26.9 million acres, which was in line with the April estimate, but well above the 25.2 million acres seeded in 2022 and the largest wheat acreage since 2001.

Of the wheat total, spring wheat area was up by eight per cent on the year, at 19.5 million acres, and winter wheat was up by 20.1 per cent at 1.4 million acres. Durum area held relatively steady, rising only 0.5 per cent from 2022 at 6.0 million acres.

“Favourable conditions across Western Canada allowed producers to complete seeding in a timely manner,” StatCan said. In the east, planting also “progressed well due to favourable field conditions.”

Barley area was up by 3.9 per cent on the year, at 7.3 million acres, while oats fell by 35.6 per cent to only 2.5 million acres. That marks the lowest oats area on record going back over 100 years.

For pulses, lentil area at 3.7 million acres was down by 15.1 per cent on the year, while pea area declined by 9.7 per cent at three million acres.

Soybean and corn plantings were both up on the year, StatCan estimated. Soybeans increased by 6.8 per cent to 5.6 million acres and corn was up by 5.5 per cent at 3.8 million acres.

— Phil Franz-Warkentin is an associate editor/analyst with MarketsFarm in Winnipeg.

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Canola stands as the best representation of traders’ concerns. Despite reaching record-high prices due to drought last summer, growers seem reluctant to plant the oilseed. Trade estimates suggest anywhere between 21.6 and 22.75 million acres will be grown in Canada for the 2022-23 marketing year, which would compare with the 22.48 million seeded the previous year.

MarketsFarm expert Bruce Burnett believes recent precipitation in canola-growing areas of the Prairies should convince growers to plant the oilseed this year.

“The prices are very attractive. The only negative for canola is basically the fertilizer costs and the seed costs. If you cancel out the crop budgets, it’s going to have better profitability than the other crops,” he said.

However, MarketsFarm PRO analyst Mike Jubinville adds that competition on the markets has given most crops the potential for profitability this year.

“This is a pretty unique year going into this growing season for agriculture because I look across the spectrum and everything has the potential to look very profitable, assuming average yields,” he said. “I think this is one of the years where because all crops are generating good margin potential, we may get surprised on this report.”

Jubinville also suggested that the time growers purchased their fertilizer, as well as leftover chemical residue in fields, could also be factors going into crop acreage.

A relative lack of need for fertilizers, and in turn reduced input costs, have made pulses look more attractive in the eyes of some market participants although many are projecting pea and lentil acreage numbers similar to last year’s.

“(There are) folks who could be drawn to the pulses. But we’ve pushed pretty hard on the pulse acreage over the past couple of years…If you’re probably going to take a rotational break on the pulses, this might be the year to do it,” Jubinville said.

While Agriculture and Agri-Food Canada (AAFC) is projecting a 1.37 million-acre increase for all wheat to 24.83 million in 2022-23, the figure is near the higher end of trade estimates with some projecting as low as 22.9 million.

“I think people are looking at the risk and reward for (wheat). In last year’s drought, wheat was one of the crops that held up the best,” independent consultant Jerry Klassen said.

Oats, for which prices have markedly risen over the past year, are estimated to have 3.4 million to four million acres seeded in Canada this summer according to analysts, compared to last year’s total of 3.42 million.

“Prices have been very strong for two-thirds of the year and have attracted more acres. It’s a high-volume crop. But in the last few months, excitement has dissipated as oat prices don’t look as good (compared) to others,” said Neil Townsend of FarmLink Marketing Solutions.

Table: Pre-report expectations from analysts ahead of Statistics Canada’s April 26 projected acreage report for 2022. Figures are in millions of acres, with StatsCan 2021-22 numbers included for comparison.

* – Excluding durum

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The department issued its latest world agricultural supply and demand estimates (WASDE) on Tuesday.

U.S. soybean planted acres and production were also projected to increase, but carryover is expected to decline steeply. Meanwhile, U.S. wheat was forecast to see decreases in acres, production and carryover.

Should USDA’s numbers hold out, corn production is projected to jump by about 17.1 per cent in 2020-21 to just shy of 16 billion bushels. This comes despite sharply reduced demand due to the COVID-19 pandemic and dramatic decreases in crude oil prices this spring. With the latter dropping to lows unseen in about 20 years, the U.S. ethanol industry was shaken to its core as production quickly became highly unprofitable. The bottom line for corn is that supply is expected to outpace demand in the coming crop year.

With that in mind, USDA upped its estimate for the corn carryover, with it skyrocketing 52.5 per cent to 3.2 billion bushels. That’s below the average market guess of 3.4 billion.

USDA kept its projection of planted corn area at 97 million acres, the same number the department calculated in March. Compared to acres planted in 2019-20, it marks an increase of 8.1 per cent.

Soybean production was forecast to rise by almost 16 per cent to more than 4.1 billion bushels. Despite that increase, the carryover was projected to drop by 30.2 per cent in 2020-21 at 405 million bushels as domestic use, including the crush, and exports are predicted to increase. Trade expectations were about 430 million.

USDA estimated soybean acres would rise by 9.7 per cent to 83.5 million in 2020-21.

Unlike the other two crops, USDA predicted decreases across the board for wheat, as it continues to struggle in the global marketplace. Planted acres are to slip 1.1 per cent to 44.7 million, making it the smallest area planted in more than a century.

Wheat production is expected to fall 2.8 per cent at 1.87 billion bushels. The carryover was projected to drop nearly 7.1 per cent at 909 million bushels. The markets expected a larger decrease, to about 820 million.

— Glen Hallick reports for MarketsFarm from Winnipeg.

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StatsCan pegged planted Canadian canola area for 2019-20 (August to July) at 20.952 million acres, down by about 300,000 from the March survey and well below the 22.813 million seeded the previous year.

The reduction in canola area “was not super surprising, given how dry it was and some of the lower prices as guys were making seeding decisions,” said market analyst Jonathon Driedger of FarmLink Marketing Solutions.

“Acres are always an important issue in determining production, but yield is always the bigger factor,” said Mike Jubinville of MarketsFarm Pro, noting attention in the canola market will be focused on weather and trade with China.

For the grains, both analysts felt durum area was a little tighter than average trade guesses, while barley and oats came in at the higher end of expectations.

Total wheat area in the country was pegged at 24.595 million acres, down by roughly one million acres from the March estimate but still above the 24.735 million seeded the previous year.

Of the wheat total, durum area was estimated at 4.894 million, down from the March estimate and well below the 6.185 million in 2018-19. Non-durum spring wheat, at 18.772 million acres, would be up from the 17.31 million planted the previous year.

“Durum has a longer-term optimistic view, from a pricing point of view,” said Jubinville.

“Durum is one of the first crops that goes in the ground, and it’s probably had some irreversible yield damage.”

Jubinville pointed out the prime durum growing area is located right in the heart of the drought area of Saskatchewan, with recent rains likely coming too late for the crop.

StatsCan pegged barley acres at 7.402 million, which would be up by 3.5 per cent from the earlier estimate and roughly one million acres above the 2018-19 level. Driedger said the larger barley area wasn’t surprising, given the solid market at seeding time.

— Phil Franz-Warkentin writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

Table: A recap of Statistics Canada’s acreage estimates as of June 11, 2019, in millions of acres. Pre-report expectations are provided for comparison purposes.

* “All wheat” = spring wheat, durum wheat, winter wheat remaining after winterkill

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Seeded acres for chickpeas almost quadrupled between 2017 and 2018, rising from 160,000 to 442,900, respectively. Since inventory from the 2018 growing season is still high, 2019 will only see approximately 300,000 seeded acres.

“A lot of farmers grew chickpeas in 2018, because we all grow on last year’s pricing,” explained Melody Ector, president of Diefenbaker Spice and Pulse at Elbow, Sask.

Prices began to decline during the 2018 harvest, and have yet to recover. Chickpeas aren’t the only pulse that is suffering — most pulse prices have declined thanks to a soured trade relationship between Canada and India.

“It’s hard for a farmer to know what to grow, because everything is down,” said Ector.

“Prices aren’t favourable for really any pulses. So you just have to pick one and hope for the best.”

Chickpeas are currently trading between 24 and 25 cents/lb., and aren’t expected to bounce higher any time soon.

Despite a weakened international appetite for Canadian chickpeas, food market trends in North America are warming up to the bean’s versatility.

Chickpea flour, a long-time staple in Indian cuisine, is a gluten-free alternative found in many popular recipes on high-profile cooking websites. Similarly, aquafaba, or whipped chickpea liquid, can be used as a vegan replacement for egg whites.

“There’s lots of research and development on pulse proteins and pulse flour, but it takes a while to develop the market,” Ector said.

“I would think it’s going to increase in popularity every year, but it’s going to take time.”

— Marlo Glass writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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