Agricultural Outlook 2019 - PCCU · market • Global Warming – In ussia where annual...

Agricultural Outlook 2019

1

WHAT IS DRIVING AGRICULTURAL MARKETS - 2019

2

Commodity Markets

3

Dow Industrials

End of 10 Year Cycle

4

US Manufacturing PMI

PMI - Purchasing Managers Index

5

Canadian Inflation Rate

6

TSX Composite

7

Canadian PMI

8

Debt To Disposable Income Yikes!!!!

9

Canadian Dollar

Where Oil Goes - Sooo Does Our Dollar $

We do see the CDN Dollar Rising to 78 – 80 cents as Oil Recovers to $70/barrel (WTI)

10

12

China - PMI

WTI

14

TRADE WAR

20

U.S. Soybean Exports

21

Chapter One

Factors Effecting Agriculture

33

Where You Are Depends On Where You Been

175

275

375

475

575

675

775

Aug

-98

May

-99

Feb-

00N

ov-0

0A

ug-0

1M

ay-0

2Fe

b-03

Nov

-03

Aug

-04

May

-05

Feb-

06N

ov-0

6A

ug-0

7M

ay-0

8Fe

b-09

Nov

-09

Aug

-10M

ay-11

Feb-

12N

ov-12

Aug

-13M

ay-14

Feb-

15N

ov-15

Aug

-16M

ay-17

Over Production US Subsidies

Increasing demand – China

Tight Global Stock

Canola Price by Month

Diminishing Demand

Large Global Stock

Source – Stats Canada 34

Farm Financial Analysis

175

275

375

475

575

675

775

Aug

-98

Jun-

99

Apr

-00

Feb-

01

Dec

-01

Oct

-02

Aug

-03

Jun-

04

Apr

-05

Feb-

06

Dec

-06

Oct

-07

Aug

-08

Jun-

09

Apr

-10

Feb-

11

Dec

-11

Oct

-12

Aug

-13

Jun-

14

Apr

-15

Feb-

16

Dec

-16

Very Good Working Capital

Very Good Debt to Worth

Purchases Diminishing Ratios

Working Capital Problems

Poor working Capital Poor Debt to worth

Consolidations Must Be Efficient!

Increasing Working Capital


Canola Price by Month

US Wheat Prices 1960 – 2019

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00

$9.00

36

Value of farm Capital

0

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017


Saskatchewan Land Values

14.90%

6.90% 5.70%

22.90%

19.70%

28.50%

18.70%

9.40% 7.50%

10.20%

6.40% 4.80%

2.10% 2.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

40

• 70% of Your Balance Sheet - Will Land Values remain high? – Positive

• Granny Landlords • Rapidly Expansion of Existing farmers • Grain/Cattle Industry Profitability • Interest Rates • Accessibility of Credit - FCC

– Negative • Falling Farm Income – Number One reason for Land values

– Increase & Decrease • Trade Disputes

Land Values

41

Current Ratio

4.216

3.234 3.505 3.353

3.575

2.304 2.36 2.202

2.87

3.774

4.962

4.545

4.089 3.999

3.963

3.994

3.692 3.917

3.505 3.385

0

1

2

3

4

5

6

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017


= Total Current Farm Assets/Total Current Farm Liabilities

Current : Ability to Pay Obligations

Current Ratio = Total Current Assets (÷) Total Current Liabilities

Less than 1.00 – “Red Light” 1.00 to 1.50 – “Yellow Light” Above 1.50 – “Green Light”

Cuurent Ratios

45

• Working Capital = • Current Assets (-) Current Liabilities

• Size Matters – Eg $1, 295,000 - $725,500 = $569,500

– Divided by Acres

• $569,500 / 2,500 acres = $227.80 – Very Good

• $569,500 / 7,500 acres = $75.93 - Poor

Liquidity Ratios

46

Debt/Equity

17.64%

18.31%

18.56% 18.74%

18.06%

20.29%

20.88% 21.03%

21.39%

18.96% 17.84%

18.57%

17.29% 16.79%

15.71%

15.49%

15.13% 13.91%

15.09% 14.70%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

1998 19992000 2001 20022003200420052006200720082009 2010 2011 2012 2013 2014 2015 2016 2017

47

Debt-to-equity (DE)= Total liabilities / (Total Assets- Total Liabilities)

Debt to Equity Ratio = Total Liabilities (÷) Total Equity

represents level of debt Rule of Thumb:

Above 66% - “Red Light” 42% to % - “Yellow Light” Less than 42% - “Green Light”

Solvency Ratios

48

Return on Assets

0.029 0.038 0.036

0.024 0.018

0.037 0.041 0.04

0.016

0.033

0.102

0.057

0.029

0.062

0.048

0.09

0.031

0.047 0.053

0.042

0

0.02

0.04

0.06

0.08

0.1

0.12

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017


Farm Income & Expense

-2,000,000

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

Cash receipts, total Operating expenses after rebates

Net cash income Net income, totalSource – Stats Canada 50

Source – USDA 51

Projected Year

Ending

Actual for Year

Ending

Actual for Year

Ending

Actual for Year

Ending

Actual for Year

Ending

Actual for Year

Ending 5 year

Ave 31-Dec-19 2018 2017 2016 2015 2014

Total Farm Cash Income $332.79 $340.34 $267.78 $340.86 $340.84 $320.50 $322.06

Total Farm Cash Expenses $255.10 $257.32 $271.99 $263.31 $263.71 $253.06 $261.88

NET FARM CASH INCOME $77.69 $83.02 -$4.20 $77.55 $77.13 $67.44 $60.19

Living $13.63 $13.63 Plus Interest $13.91 $9.21 Plus: Off Farm Income $10.22 $10.22 Cash Income Before Debt $88.20 $65.99 Debt Payment 57.78 57.78 Residual $30.42 $8.21 DSR 1.53:1 1.14:1

Ability to Repay Debt – Long Term

52

53

3000 Acre Grain Farm % Deviation in Income Plus 10% Plus 15% Plus 20% Less 10% Less 15% Less 20% Less 25%

Total Income $110.89 $121.98 $127.52 $133.07 $99.80 $94.26 $88.71 $83.17

Farm Cash Rent $18.75 $18.75 $18.75 $18.75 $18.75 $18.75 $18.75 $18.75

Family Living $16.67 $16.67 $16.67 $16.67 $16.67 $16.67 $16.67 $16.67

Principal & Interest $75.00 $75.00 $75.00 $75.00 $75.00 $75.00 $75.00 $75.00

Off - Farm Income $16.67 $16.67 $16.67 $16.67 $16.67 $16.67 $16.67 $16.67

Residual for Growth $17.14 $28.23 $33.77 $39.32 $6.05 $0.51 -$5.04 -$10.58

$51,420 $84,687 $101,320 $117,954 $18,153 $1,519 -$15,114 -$31,747

• Must Have a Strong Equity Position - because they will not get the profits – Must have:

• Marketing Management Expertise • Financial Management • Adaptable to Change • Low Machinery Cost • Low Overhead Cost & Low Family Living • Low Debt Load

Keys to Farm Survival in a Downturn

54

USMCA

56

USMCA

• Review clause: The USMCA includes a 16-year expiration date – Provision that requires a review of the deal every

six years, when it can be extended.

• Dispute settlement: NAFTA's dispute-settlement system, will remain the same, a key win for the Canadians. – The investor-state dispute-settlement system, will

be phased out for the US and Canada

58

Grains Outlook

80

0

100

200

300

400

500

600

700

198

9/90

199

0/91

199

1/92

199

2/93

199

3/94

199

4/95

199

5/96

199

6/97

199

7/98

199

8/99

199

9/00

200

0/01

200

1/02

200

2/03

200

3/04

200

4/05

200

5/06

200

6/07

200

7/08

200

8/09

200

9/10

201

0/11

201

1/12

201

2/13

201

3/14

201

4/15

201

5/16

201

6/17

201

7/18

201

8/19

Total Wheat and Coarse Grains: Supply and Demand

81

Wheat

82

US Wheat Associates 83

Global Wheat Production (MMT)

580.00

600.00

620.00

640.00

660.00

680.00

700.00

720.00

740.00

760.00

780.00

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Production (million metric tons) Domestic disappearance (million metric tons)

85

31.8

51.3

19.5 17.0

132.5

137.6

99.7

15.0

25.5

70.0

25.0

https://www.uswheat.org/market-and-crop-information/supply-and-demand/ 88

The Rise of Russian Wheat Production

93

Russian Wheat Production

59.8 61.04

72.53

85

70

0

10

20

30

40

50

60

70

80

90

2014/15 2015/16 2016/17 2017/18 2018/19

96

Russian Wheat Exports

36.5 Million Tons

98


• In 80s the USSR was the largest grain and wheat importer (Soviet Russia was the largest consumer but it’s hard to separate its imports from other member of the Union). – In 1985 the country imported 46 mmt of grain

including 21 mmt of wheat

• In 2017, the country has harvested 85.8 mmt of wheat, which is a new all-time record.

103


• The collapse of the Soviet Union • Farmers became entrepreneurs

– The freedom to: • Produce what they want • To sell it to any buyer at any price

• Land Reforms – Long Term Lease & Land Ownership

• With Freedom, Russian Farmers have invested in Agri-Technologies

104


• Foreign trade liberalisation – Farmers have received the access to huge world

market • Global Warming

– In Russia where annual temperatures are increasing faster than average world ones it led to milder winters and expansion of area under higher yielding winter wheat.

– Since 2016 Russia is sowing more winter wheat than spring wheat. 20 years ago the spring wheat acreage was exceeding winter wheat one by 80-100 percent

105


• Rapid devaluation of ruble in 2014 • We believe that medium term we see a lot of

investments coming into grain exports infrastructure.

• In 2017 & 2018 terminal owners are likely to make a fortune - will definitely encourage investors to pour more money into the sector

106

US Dark Northern Spring – US $/Bus (Minneapolis )

3.40

3.45 3.53

4.45 4.19 4.13

4.63 5.37

10.75

7.95

5.84

8.13

9.71 9.48

8.50

7.19

5.99 6.02

7.23

6.73

0.00

2.00

4.00

6.00

8.00

10.00

12.00

115

119

Wheat January 25, 2019

2017-2018 2018-2019[f] 2019-2020[f] Area seeded (kha) 7,020 7,570 8,260

Area harvested (kha) 6,895 7,425 8,040 Yield 3.63 3.5 3.5 Production (kt) 25,022 26,024 28,100 Imports (b) 75 80 80 Total supply (kt) 30,125 30,800 32,180 Exports (kt) [c] 17,480 18,700 18,500

Food and Industrial Use (kt) [d] 3,119 3,180 3,250

Feed, Waste & Dockage (kt) 4,051 4,073 4,103

Total Domestic Use (kt) [e] 7,949 8,100 8,180 Carry-out Stocks (kt) 4,696 4,000 5,500 Average Price ($/t) [g] 240 235-265 230-260

Source: Statistics Canada (STC) and Agriculture and Agri-Food Canada (AAFC)

World Wheat

120

• World all wheat (including durum) production is forecast to increase by 12 Mt to 745 Mt due to a higher seeded area.

• Supply is projected to be unchanged at 1,013 Mt due to lower carry in stocks.

• Total use is expected to increase by 8 Mt to 753 Mt because of growing use for food.

• Carry out stocks are forecast to fall by 8 Mt to 260 Mt.

• Excluding China, world all wheat stocks are expected to fall by 11 Mt to 114 Mt.

Canadian Wheat

121

• For 2019-20, the area seeded to wheat in Canada is forecast to increase by 9% from 2017-18 as a 4% decrease for winter wheat is more than offset by a 10% increase for spring wheat.

• The spring wheat area is forecast to increase because of relatively good prices for wheat and a shift out of durum and winter wheat in Western Canada.

• Production is projected to rise by 8%. • Supply is forecast to increase by 5% due to lower carry-in

stocks. • Exports are forecast to fall slightly due to higher world

production. Carry-out stocks are forecast to increase by 37% to 5.5 Mt.

224.29

125

145

165

185

205

225

245

1/6/

2016

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3/2/

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64/

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7/20

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68/

17/2

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9/14

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610

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2016

11/9

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612

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016

1/4/

2017

2/1/

2017

3/1/

2017

3/29

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74/

26/2

017

5/24

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76/

21/2

017

7/19

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78/

16/2

017

9/6/

2017

10/4

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711

/1/2

017

11/2

9/20

1712

/27/

2017

1/24

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82/

21/2

018

3/21

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84/

18/2

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5/16

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86/

13/2

018

7/11

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88/

8/20

189/

5/20

1810

/3/2

018

10/3

1/20

1811

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2018

12/2

6/20

18

Wheat 1 CPS Red

122

Minneapolis Hard Red Spring Wheat Futures – March Contract – Feb 13 , 2019

123

251.06

175

195

215

235

255

275

295

315

3351/

6/20

162/

17/2

016

3/30

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65/

11/2

016

6/22

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68/

3/20

169/

14/2

016

10/2

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1612

/7/2

016

1/18

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73/

1/20

174/

12/2

017

5/24

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77/

5/20

178/

16/2

017

9/20

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711

/1/2

017

12/1

3/20

171/

24/2

018

3/7/

2018

4/18

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85/

30/2

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7/11

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88/

22/2

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10/3

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811

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2018

12/2

6/20

18

Wheat 1 CWRS

124

Spring Spring Spring CPS CPS CPS Winter Winter WinterWheat Wheat Wheat Wheat Wheat Wheat Wheat Wheat Wheat

Plus 20% Neg 20% Plus 20% Neg 20% Plus 20% Neg 20% REVENUE PER ACRE Estimated Yield (bu./ac.,lb./ac.) (A) 50.0 68.0 60.0 Estimated On Farm Market Price/bu.,lb. (B) 6.50 7.80 5.20 4.40 5.28 3.52 4.45 5.34 3.56 Estimated Gross Revenue/ac 325.00 390.00 260.00 299.20 359.04 239.36 267.00 320.40 213.60

EXPENSES PER ACREVariable Expenses/acre Seed 23.44 32.11 27.00 Fertilizer - Nitrogen 40.82 52.29 27.98 - Phosphorus 16.45 21.16 14.10 - Sulphur and Other 0.00 0.00 0.00 Chemical - Herbicides 59.11 72.40 62.93 - Insecticides/Fungicides 38.66 38.66 10.05 - Seed Treatments/Inoculants 6.32 8.43 7.90 Machinery Operating - Fuel 21.51 22.75 21.50 - Repair 10.61 10.61 10.61 Custom Work and Hired Labour 19.75 19.75 19.75 Crop Insurance Premium 6.73 7.65 11.59 Utilities and Miscellaneous 4.97 4.97 4.97 Interest on Variable Expenses 6.21 7.27 12.28Total Variable Expenses 254.58 298.05 230.66

Other Expenses/acre Building Repair 0.84 0.84 0.84 Property Taxes 7.46 7.46 7.46 Business Overhead 3.37 3.37 3.37 Total Other Expenses (E) 11.67 11.67 11.67

Total Expenses 266.25 266.25 266.25 309.72 309.72 309.72 242.33 242.33 242.33

Farm Living 16.50 16.50 16.50Off Farm Income 15.00 15.00 15.00Farm Debt 75.00 75.00 75.00Total 76.50 76.50 76.50 76.50 76.50 76.50 76.50 76.50 76.50

Residual For Growth -17.75 47.25 -82.75 -87.02 -27.18 -146.86 -51.83 1.57 -105.23

Crops

BLACK SOIL ZONE CROP PRODUCTION COSTS ($/ACRE) 2018

125

Spring Spring Spring Durum Durum Durum CPS CPS CPS Winter Winter Winter Wheat Wheat Wheat Wheat Wheat Wheat Wheat Wheat Wheat Wheat Wheat Wheat

REVENUE PER ACRE Estimated Yield (bu./ac.,lb./ac.) (A) 45.0 55.0 64.0 57.0 Estimated On Farm Market Price/bu.,lb. (B) 6.50 7.80 5.20 6.75 8.10 5.40 4.40 5.28 3.52 4.45 5.34 3.56 Estimated Gross Revenue/ac (AxB)=(C) 292.50 351.00 234.00 371.25 445.50 297.00 281.60 337.92 225.28 253.65 304.38 202.92

EXPENSES PER ACREVariable Expenses/acre Seed 20.62 29.00 28.10 25.20 Fertilizer - Nitrogen 36.23 40.36 47.70 28.90 - Phosphorus 14.57 16.45 19.28 14.57 - Sulphur and Other 0.00 0.00 0.00 0.00 Chemical - Herbicides 59.11 44.96 72.40 62.93 - Insecticides/Fungicides 38.66 28.61 38.66 10.05 - Seed Treatments/Inoculants 5.56 6.79 7.37 7.37 Machinery Operating - Fuel 19.35 20.48 20.48 19.34 - Repair 9.38 9.38 9.38 9.38 Custom Work and Hired Labour 18.75 18.75 18.75 18.75 Crop Insurance Premium 5.40 8.07 5.62 7.57 Utilities and Miscellaneous 4.31 4.31 4.31 4.31 Interest on Variable Expenses 5.80 5.68 6.80 11.72Total Variable Expenses (D) 237.74 232.84 278.85 220.09

Other Expenses/acre Building Repair 0.62 0.62 0.62 0.62 Property Taxes 4.92 4.92 4.92 4.92 Business Overhead 2.87 2.87 2.87 2.87Total Other Expenses 8.41 8.41 8.41 8.41

Farm Living 16.50 16.50 16.50 16.50Off Farm Income 15.00 15.00 15.00 15.00Farm Debt 75.00 75.00 75.00 75.00Total 76.50 76.50 76.50 76.50

Total Expenses 322.65 322.65 322.65 317.75 317.75 317.75 363.76 363.76 363.76 305.00 305.00 305.00

Net Farm Income -30.15 28.35 -88.65 53.50 127.75 -20.75 -82.16 -25.84 -138.48 -51.35 -0.62 -102.08

Crops

DARK BROWN SOIL ZONE CROP PRODUCTION COSTS ($/ACRE) 2018

126

Global Durum Production (Million Bus)

129

https://www.nass.usda.gov/Charts_and_Maps/Field_Crops/dwyld.php 132

https://www.nass.usda.gov/Charts_and_Maps/Field_Crops/dwprod.php 133

Global Durum • World durum production increased by 1 Mt from 2017-18

to 38 Mt, according to the International Grains Council. • The largest increases in production were for Algeria,

Canada and the US, with smaller increases for Morocco and Tunisia.

• This was partly offset by decreases for the EU, Mexico, Australia, Turkey and Syria.

• Supply rose by only 0.8 Mt to 47.8 Mt because of lower carry-in stocks.

• Use is expected to increase by 0.2 Mt to 37.5 Mt as higher food use is partly offset by lower feed use.

• Carry-out stocks are forecast to increase by 0.5 Mt to 10.3 Mt.

134

Canadian Durum Wheat

• For 2018-19, Canadian durum production increased by 16% from 2017-18 to 5.745 million tonnes (Mt), according to Statistics Canada (STC), as a 19% increase in seeded area was partly offset by lower yields.

• The final production estimate was 0.39 Mt higher than the previous estimate.

• Saskatchewan accounted for 80% of the total production, Alberta for 19.7%, and Manitoba for 0.3%.

• Total supply increased by 6%, as the higher production was partly offset by lower carry-in stocks.

135

Canadian Durum Wheat

• Exports are forecast to decrease by 4%. • Slower than expected exports for the first four months

of the crop year and expectations that the low prices will result in higher producer carry-out stocks and significantly lower seeded area for 2019-20.

• Total domestic use is forecast to increase by 10% as the low prices will encourage more use of durum for feed.

• Carry-out stocks are forecast to rise by 35% to 2 Mt, 41% higher than the past five year average of 1.42 Mt.

136

Durum 2016-2017 2017-2018 2018-2019[f]

Area seeded (kha) 2,469 2,106 2,503 Area harvested (kha) 2,333 2,088 2,456

Yield (t/ha) 3.33 2.38 2.34

Production (kt) 7,762 4,962 5,745 Imports (kt) [b] 11 8 10

Total supply (kt) 8,873 6,798 7,232 Exports (kt) [c] 4,534 4,387 4,200 Food and Industrial Use (kt) [d] 174 193 200

Feed, Waste & Dockage (kt) 2,133 500 649

Total Domestic Use (kt) [e] 2,511 934 1,032

Carry-out Stocks (kt) 1,828 1,477 2,000 Average Price ($/t) [g] 275 265 215-245 f: forecasts by AAFC. For 2018-19, area, yield and production are from the STC survey but imports and dispositions are forecast by AAFC.

Source: Statistics Canada (STC) and Agriculture and Agri-Food Canada (AAFC) 137

223.45

175

195

215

235

255

275

295

315

335

1/6/

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2/17

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63/

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5/11

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9/14

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610

/26/

2016

12/7

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61/

18/2

017

3/1/

2017

4/12

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75/

24/2

017

7/5/

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8/16

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79/

20/2

017

11/1

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712

/13/

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83/

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184/

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8/22

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810

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Wheat 1 CWAD

138

BARLEY

140

141,984

149,775

147,055

144,013

140,724

136000

138000

140000

142000

144000

146000

148000

150000

152000

2014/15 2015/16 2016/17 2017/18 2018/19Dec

World Barley Production (TMT)

141

142,505

147,672

150,346

147,776

142,581

138000

140000

142000

144000

146000

148000

150000

152000

2014/15 2015/16 2016/17 2017/18 2018/19Dec

World Barley Consumption

142

Global Barley Production

ICG Grains 143

World Barley: Situation & Outlook

• World barley stocks are historically low as nearly all of the world major producers and exporters had smaller crops and, in many cases, quality was also lower than normal.

• To-date for this crop year, the average price for feed barley has been at a US$75/tonne (t) premium to the world average FOB corn price, the highest in the last 10 years.

• Lower world supplies of malting barley, and especially quality malt, is also pushing these prices higher.

144

Canadian Barley

145

• For 2019-20, seeded area is forecast to be higher than 2018-19 due to high barley prices and low carry-in stocks.

• Production is forecast to increase by 6% to 8.9 Mt due to the higher area and an average total yield.

• Despite the lower carry-in stocks, total supply is forecast to increase by 3% to 10.0 Mt.

• Total domestic use is forecast to increase by 2% due to slightly higher feed use in cattle and hog production.

• Exports are forecast to increase slightly due to higher domestic supplies and a return to normal trade patterns.

• With a higher supply, barley carry-out stocks are forecast to increase by 10% to 1.3 Mt but it's still below the previous five-year averages.

• The Lethbridge cash feed barley price is forecast to decrease by 12% from 2018-19.

146

Barley January 25, 2019

2017-2018 2018-2019[f] 2019-2020[f] Area seeded (kha) 2,334 2,628 2,800 Area harvested (kha) 2,114 2,395 2,482 Yield (t/ha) 3.73 3.5 3.59 Production (kt) 7,891 8,380 8,899 Imports (kt) [b] 59 65 75 Total supply (kt) 10,072 9,701 9,974 Exports (kt) [c] 2,824 2,450 2,500 Food and Industrial Use (kt) [d] 49 86 86 Feed, Waste & Dockage (kt) 5,715 5,940 5,912 Total Domestic Use (kt) [e] 5,992 6,251 6,224 Carry-out Stocks (kt) 1,256 1,000 1,250 Average Price ($/t) [g] 227 240-270 220-250

Source: Statistics Canada

#1 CW Barley

4.42

2.00

2.50

3.00

3.50

4.00

4.50

5.00Ja

n-17

Feb-

17M

ar-1

7Ap

r-17

May

-17

Jun-

17Ju

l-17

Aug-

17Se

p-17

Oct

-17

Nov

-17

Dec

-17

2017

Jan-

18Fe

b-18

Mar

-18

Apr-

18M

ay-1

8Ju

n-18

Jul-1

8Au

g-18

Sep-

18O

ct-1

8N

ov-1

8D

ec-1

8

147

Saskatchewan Feed Barley Price

50

100

150

200

250

300

Dec-

09Ap

r-10

Aug-

10De

c-10

Apr-

11Au

g-11

Dec-

11Ap

r-12

Aug-

12De

c-12

Apr-

13Au

g-13

Dec-

13Ap

r-14

Aug-

14De

c-14

Apr-

15Au

g-15

Dec-

15Ap

r-16

Aug-

16De

c-16

Apr-

17Au

g-17

Dec-

17Ap

r-18

Aug-

18

149

BLACK SOIL ZONE CROP PRODUCTION COSTS ($/ACRE) 2019 Malt Malt Malt Feed Feed Feed Barley Barley Barley Barley Barley Barley REVENUE PER ACRE Estimated Yield (bu./ac.,lb./ac.) (A) 66.0 Plus 20% Neg 20% 77.0 Plus 20% Neg 20% Estimated On Farm Market Price/bu.,lb. (B) 4.68 5.62 3.74 4.00 4.80 3.20 Estimated Gross Revenue/ac (AxB)=(C) 308.88 370.66 247.10 308.00 369.60 246.40 EXPENSES PER ACRE Variable Expenses/acre Seed 28.91 18.92 Fertilizer - Nitrogen 28.44 34.86 - Phosphorus 12.69 15.51 - Sulphur and Other 0.00 0.00 Chemical - Herbicides 72.40 28.99 - Insecticides/Fungicides 36.02 36.02 - Seed Treatments/Inoculants 7.73 6.44 Machinery Operating - Fuel 21.45 22.53 - Repair 10.61 10.61 Custom Work and Hired Labour 17.75 17.75 Crop Insurance Premium 5.10 5.10 Utilities and Miscellaneous 4.97 4.97 Interest on Variable Expenses 6.15 5.04 Total Variable Expenses (D) 252.22 252.22 252.22 206.74 206.74 206.74 Other Expenses/acre Building Repair 0.84 0.84 Property Taxes 7.46 7.46 Business Overhead 3.37 3.37 Total Other Expenses (E) 11.67 11.67 Farm Living 16.50 16.50 Off Farm Income 15.00 15.00 Farm Debt 75.00 75.00 Total 76.50 76.50 76.50 76.50 76.50 76.50 Total Expenses 340.39 340.39 340.39 294.91 294.91 294.91 Residual For Growth -31.51 30.27 -93.29 13.09 74.69 -48.51 150

Malt Malt Malt Feed Feed FeedBarley Barley Barley Barley Barley Barley

REVENUE PER ACRE 60.0 Plus 20% Neg 20% 64.0 Plus 20% Neg 20% Estimated Yield (bu./ac.,lb./ac.) (A) 4.68 5.62 3.74 4.00 4.80 3.20 Estimated On Farm Market Price/bu.,lb. (B) 280.80 336.96 224.64 256.00 307.20 204.80 Estimated Gross Revenue/ac (AxB)=(C)EXPENSES PER ACREVariable Expenses/acre Seed 25.40 16.68 Fertilizer - Nitrogen 26.14 31.65 - Phosphorus 11.75 14.10 - Sulphur and Other 0.00 0.00 Chemical - Herbicides 72.40 28.99 - Insecticides/Fungicides 36.02 0.00 - Seed Treatments/Inoculants 6.79 5.68 Machinery Operating - Fuel 19.30 20.27 - Repair 9.38 9.38 Custom Work and Hired Labour 17.75 17.75 Crop Insurance Premium 6.12 6.12 Utilities and Miscellaneous 4.31 4.31 Interest on Variable Expenses 5.88 3.87Total Variable Expenses (D) 241.24 241.24 241.24 158.80 158.80 158.80Other Expenses/acre Building Repair 0.62 0.62 Property Taxes 4.92 4.92 Business Overhead 2.87 2.87 Total Other Expenses (E) 8.41 8.41 8.41 8.41 8.41 8.41Farm Living 16.50 16.50Off Farm Income 15.00 15.00Farm Debt 75.00 75.00Total 76.50 76.50 76.50 76.50 76.50 76.50Total Expenses 326.15 326.15 326.15 243.71 243.71 243.71Residual For Growth -45.35 10.81 -101.51 12.29 63.49 -38.91

Dark Brown

151

Oats

164

Major Oat Producers By Country (MMT)

2014/15 2015/16 2016/17 2017/18 2018/19Dec Production

United States 1019 1300 940 717 815

Australia 1198 1300 2266 1120 900

Canada 2977 3425 3231 3733 3450

Russia 5267 4527 4750 5441 4800

European Union 7821 7524 8044 8072 8050

165

Major Oat Consumers (MMT)

2014/15 2015/16 2016/17 2017/18 2018/19Dec

Australia 950 1025 1500 850 700

Brazil 305 345 775 675 725

Canada 1682 1620 1854 2035 1900

United States 2447 2702 2539 2358 2493

Russia 5200 4600 4800 5400 4800

European Union 7730 7400 7950 7900 7850

166

Major Oat Producing Country – Ending Stocks (MMT)

2014/15 2015/16 2016/17 2017/18 2018/19Dec

Brazil 10 16 68 23 63

Kazakhstan 33 27 75 75 75

Australia 93 143 419 139 89

Argentina 65 65 89 51 96

Russia 289 199 147 163 158

United States 780 824 731 595 525

European Union 770 690 637 629 684

Canada 693 947 703 784 744

167

Canadian Oats: Situation & Outlook

• For 2018-19, Canadian oat production decreased by 8% from 2017-18 to 3.4 Mt, due to lower harvested area and lower average yield.

• Production in Western Canada averaged 3.18 Mt – 53% was in Saskatchewan, – 22% in Manitoba, – 22% in Alberta – 2% in BC. – Production in Eastern Canada averaged 0.27 Mt

• 63% was in Quebec, • 25% in Ontario • 12% in the Maritimes.

168

Canadian Oats: Situation & Outlook

• Due to lower production, total supply decreased by 5% to 4.2 Mt despite higher carry-in stocks.

• Total domestic use is forecast to decrease by 17% due to significantly lower feed use.

• Oat grain and product exports are forecast to increase by 6%. Carry-out stocks are forecast to decrease by 17% to 0.7 Mt and remain largely below the previous three and five-year averages.

169

Canadian Oats: Situation & Outlook • For 2019-20, seeded area is forecast to increase by 5% from

2018-19 due to good US oat futures price levels. • Based on the 5 year average for abandonment and yield,

Canadian oat production is forecast to increase slightly to 3.5 Mt but, due to lower carry-in stocks, supply is expected to decrease marginally.

• Total domestic use is forecast to decrease slightly due to lower feed, waste and dockage as food and industrial use remains flat.

• Exports of oat grain and products are forecast to be slightly lower than 2018-19 due to lower supplies.

• Carry-out stocks are forecast to remain unchanged from 2018-19, at 0.7 Mt, remaining below the previous three and five-year averages.

• The Canadian oat price is forecast to increase due to higher coarse grain prices in the US and the weak Canadian dollar. 170

171

Oats [a]: January 25, 2019

2017-2018 2018-2019[f] 2019-2020[f] Area seeded (kha) 1,295 1,235 1,300 Area harvested (kha) 1,052 1,005 1,039 Yield (t/ha) 3.55 3.42 3.41 Production (kt) 3,733 3,436 3,546 Imports (kt) [b] 14 20 20 Total supply (kt) 4,451 4,241 4,216 Exports (kt) [c] 2,351 2,500 2,475 Food and Industrial Use (kt) [d] 109 125 125 Feed, Waste & Dockage (kt) 1,103 860 860 Total Domestic Use (kt) [e] 1,315 1,091 1,091 Carry-out Stocks (kt) 784 650 650 Average Price ($/t) [g] 218 225-255 230-260 Source: Statistics Canada

Oat Futures – Feb 13, 2019

172

Feed Oats

200.64

75

95

115

135

155

175

195

215

1/6/

2016

2/24

/201

64/

13/2

016

6/1/

2016

7/20

/201

69/

7/20

1610

/26/

2016

12/1

4/20

162/

1/20

173/

22/2

017

5/10

/201

76/

28/2

017

8/16

/201

79/

27/2

017

11/1

5/20

171/

3/20

182/

21/2

018

4/11

/201

85/

30/2

018

7/18

/201

89/

5/20

1810

/24/

2018

12/1

2/20

18

173

Oats

REVENUE PER ACRE Estimated Yield (bu./ac.,lb./ac.) (A) 105.0 Plus 20% Neg 20% Estimated On Farm Market Price/bu.,lb. (B) 3.00 3.60 2.40 Estimated Gross Revenue/ac (AxB)=(C) 315.00 378.00 252.00

EXPENSES PER ACREVariable Expenses/acre Seed 28.12 Fertilizer - Nitrogen 35.77 - Phosphorus 15.04 - Sulphur and Other 0.00 Chemical - Herbicides 22.95 - Insecticides/Fungicides 10.05 - Seed Treatments/Inoculants 3.95 Machinery Operating - Fuel 22.27 - Repair 10.61 Custom Work and Hired Labour 17.75 Crop Insurance Premium 8.98 Utilities and Miscellaneous 4.97 Interest on Variable Expenses 4.51Total Variable Expenses (D) 184.97 184.97 184.97

Other Expenses/acre Building Repair 0.84 Property Taxes 7.46 Business Overhead 3.37 Total Other Expenses (E) 11.67 11.67 11.67Farm Living 16.50Off Farm Income 15.00Farm Debt 75.00Total 76.50 76.50 76.50Total Expenses 273.14 273.14 273.14

Residual For Growth 41.86 104.86 -21.14

Black

174

Oats



Other Expenses/acre Building Repair 0.62 Property Taxes 4.92 Business Overhead 2.87 Total Other Expenses (E) 8.41 8.41 8.41Farm Living 16.50Off Farm Income 15.00Farm Debt 75.00Total 76.50 76.50 76.50Total Expenses 236.54 236.54 236.54

Residual For Growth 63.46 123.46 3.46

Dark Brown

175

Soybeans

177

Projected U.S. 2019/20 Crop Margins

178

Canadian Soybeans

• For 2018-19, soybean production is estimated at 7.3 Mt, a drop of 0.45 Mt from last year, based on a harvested area of 2.54 mln ha and yields of 2.86 t/ha.

• In Western Canada, the province of Manitoba is the second largest soybean producing province, at 1.6 Mt, down sharply from the 2.2 Mt grown last year, while in Saskatchewan soybean output is estimated at 0.2 Mt.

187

March Soybean Futures as of Feb 13, 2019

191



*Other Expenses/acre Building Repair 0.84 Property Taxes 7.46 Business Overhead 3.37 Total Other Expenses (E) 11.67 11.67 11.67Total Expenses (D+E+F)=(G) Farm Living Off Farm Income 16.50Farm Debt 15.00Total 75.00

76.50 76.50 76.50Total Expenses 321.00 321.00 321.00Residual For Growth -22.52 37.18 -82.22

Black Soybean

192

Canola

193

0

1

2

3

4

5

6

7

8

9

60

62

64

66

68

70

72

74

76

2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19

Production Ending Stocks

World Canola Production Vs Ending Stocks (MMT)

194

0

10000

20000

30000

40000

50000

60000

70000

80000

2016/17 2017/18 2018/19

Meal Rapeseed Oil Rapeseed Oilseed Rapeseed

World Canola Production

195

World Canola Imports

5,886 6,121 6,125

4,391 4,499 4,765

15,528 15,151 16,731

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

2016/17 2017/18 2018/19


196

World Canola Exports (TMT)

6,031 6,340 6,162

4,522 4,620 4,826

15,800 16,355 17,052

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

2016/17 2017/18 2018/19


197

World Canola Consumption (TMT)

38,685.00 39,244.00 38,996.00

28,898.00 28,652.00 27,825.00

70,336.00 71,085.00 70,652.00

0

10000

20000

30000

40000

50000

60000

70000

80000

2016/17 2017/18 2018/19


198

World Canola Ending Stocks (TMT)

1,030 611 636

4,152.00

3,239.00 3,060.00

$4,989.00

$6,728.00 $5,972.00

0

1000

2000

3000

4000

5000

6000

7000

8000

2016/17 2017/18 2018/19


199

World Canola: Situation & Outlook

202

• World canola-rapeseed production is estimated at 63.0 Mt by Oil World compared to 65.5 Mt in 2017-18 and the 63.2 Mt in 2016-17.

• Canada is the world's largest grower of canola at 20.3 Mt followed by the European Union at 19.6 Mt.

• India is a distant third, growing 6.3 Mt of canola-rapeseed, followed by China at 4.8 Mt.

• Australian rapeseed production fell by almost 40%, to 2.2 Mt due to drought.

• Ukrainian and Russian production are estimated at 3.0 Mt and 2.1 Mt, respectively.

• Production in other countries was 3.1 Mt up from slightly under 3.1 Mt.

World Canola: Situation & Outlook

203

• World exports of canola-rapeseed is estimated at 16.6 Mt up slightly from the 16.2 Mt shipped around the world in 2017-18 but down from the 17.1 Mt exported in 2016-17.

• Canada is the world's largest exporter, accounting for slightly over two-thirds of the world trade in canola.

• Australia is forecast to export 1.6 Mt of canola, versus the 2.4 Mt shipped in 2017-18 and 3.5 Mt exported in 2016-17.

• Ukraine is forecast to export 2.3 Mt of rapeseed, similar to 2017-18.

• Exports from other countries are estimated at 1.4 Mt, vs 1.1 Mt for 2017-18 and 0.7 Mt in 2016-17.

Canadian Canola: Situation & Outlook

204

• For 2019-20, seeded area in Canada is forecast to increase by 1% to 9.4 million hectares (Mha), on a shift out of soybeans and lentils across Western Canada, expected steady yields and a projected slight strengthening of prices.

• The gains in area will be limited by competition from burdensome world soybean and palm oil supplies and continued large carry-out stocks.

• Harvested area is forecast at 9.3 Mha while yields are projected at 2.2 tonnes per hectare (t/ha).

• Production is forecast to rise to 20.5 Mt, versus the 20.3 Mt grown in 2018-19.

• Total supply is forecast marginally down to 22.9 Mt, as a lower carry-in stocks offsets the rise in output.

Canadian Canola: Situation & Outlook

205

• Exports are forecast up by 2% to 11.2 Mt on support by the slow but steady growth in world consumption of vegetable oils and high oil content oilseeds, with the rate of growth constrained by stiff competition from burdensome world supplies of oilseeds and oilseed co-products.

• Domestic crush is forecast to fall slightly to 9.1 Mt, due to competition from large world supplies of competing soybean oil and palm oil.

• Carry-out stocks are forecast unchanged at 2.3 Mt for a stocks-to-use ratio of 11% while canola prices are expected to rise slightly in the range of $510-550/t.

206

Canola : January 25, 2019

2017-2018 2018-2019[f] 2019-2020[f]

Area seeded (kha) 9,313 9,232 9,350 Area harvested (kha) 9,273 9,120 9,258 Yield (t/ha) 2.3 2.23 2.21 Production (kt) 21,328 20,343 20,500 Imports (kt) [b] 108 100 100 Total supply (kt) 22,777 22,948 22,900 Exports (kt) [c] 10,723 11,000 11,200 Food and Industrial Use (kt) [d] 9,269 9,200 9,100

Feed, Waste & Dockage (kt) 212 397 249 Total Domestic Use (kt) [e] 9,548 9,648 9,400 Carry-out Stocks (kt) 2,506 2,300 2,300 Average Price ($/t) [g] 539 495-535 510-550


457.96

400

420

440

460

480

500

5201/

3/20

181/

17/2

018

1/31

/201

82/

14/2

018

2/28

/201

83/

14/2

018

3/28

/201

84/

11/2

018

4/25

/201

85/

9/20

185/

23/2

018

6/6/

2018

6/20

/201

87/

4/20

187/

18/2

018

8/1/

2018

8/15

/201

88/

29/2

018

9/12

/201

89/

26/2

018

10/1

0/20

1810

/24/

2018

11/7

/201

811

/21/

2018

12/5

/201

812

/19/

2018

1/2/

2019

1/9/

2019

Canola 1 Canada – Cash

208

March Soybean Futures as of Feb 4, 2019

209

March Canola Futures – Feb 13, 2019

210

March Canola Futures – Jan 28, 2019

211



Other Expenses/acre Building Repair 0.84 Property Taxes 7.46 Business Overhead 3.37 Total Other Expenses (E) 11.67 11.67 11.67Total Expenses (D+E+F)=(G) Farm Living 16.50Off Farm Income 15.00Farm Debt 75.00Total 76.50 76.50 76.50Total Expenses 360.77 360.77 360.77Residual For Growth 69.23 155.23 -16.77

Black Canola

212



Other Expenses/acre Building Repair 0.62 Property Taxes 4.92 Business Overhead 2.87 Total Other Expenses (E) 8.41 8.41 8.41Total Expenses (D+E+F)=(G) 275.86Farm Living 16.50Off Farm Income 15.00Farm Debt 75.00Total 76.50 76.50 76.50Total Expenses 352.36 352.36 352.36Residual For Growth 77.64 163.64 -8.36

Dark Brown Canola

213

Flax

215

Canadian Flax: Situation & Outlook 2019

• For 2018-19, flaxseed production is estimated at 0.49 Mt on a harvested area of 0.34 million hectares (mln ha) and yields of 1.4 t/ha.

• Total supplies of flaxseed are forecast to fall by slightly over 20%, to 0.63 Mt, as a decline in carry-in stocks supplements the drop in production.

• Exports are forecast at 0.40 Mt while total domestic use falls to 0.13 Mt on a drop in feed, waste and dockage.

• Carry-out stocks are forecast to fall to 0.10 Mt for a stocks-to-use ratio of 19%.

• The average flaxseed price is expected to rise to $485-505/t.

216

Flaxseed 2016-2017 2017-2018 2018-2019[f] Area seeded (kha) 381 421 347

Area harvested (kha) 342 419 342

Yield (t/ha) 1.73 1.33 1.44 Production (kt) 591 555 493 Imports (kt) [b] 17 7 10 Total supply (kt) 887 802 631 Exports (kt) [c] 500 515 400 Food and Industrial Use (kt) [d] 0 0 0

Feed, Waste & Dockage (kt) 128 143 115

Total Domestic Use (kt) [e] 147 159 131

Carry-out Stocks (kt) 240 128 100 Average Price ($/t) [g] 458 463 485-505 f: forecasts by AAFC. For 2018-19, area, yield and production are from the STC survey but imports and dispositions are forecast by AAFC.

Source: Statistics Canada 217

Flax

498.49

350

370

390

410

430

450

470

490

510

1/6/

2016

2/17

/201

63/

30/2

016

5/11

/201

66/

22/2

016

8/3/

2016

9/14

/201

610

/26/

2016

12/7

/201

61/

18/2

017

3/1/

2017

4/12

/201

75/

24/2

017

7/5/

2017

8/16

/201

79/

20/2

017

11/1

/201

712

/13/

2017

1/24

/201

83/

7/20

184/

18/2

018

5/30

/201

87/

11/2

018

8/22

/201

810

/3/2

018

11/1

4/20

1812

/26/

2018

218



Other Expenses/acre Building Repair 0.84 Property Taxes 7.46 Business Overhead 3.37 Total Other Expenses (E) 11.67 11.67 11.67Farm Living 16.50Off Farm Income 15.00Farm Debt 75.00Total 76.50 76.50 76.50Total Expenses 295.87 295.87 295.87Residual For Growth 29.13 94.13 -35.87

Black Flax

219



Other Expenses/acre Building Repair 0.62 Property Taxes 4.92 Business Overhead 2.87 Total Other Expenses (E) 8.41 8.41 8.41Farm Living 16.50Off Farm Income 15.00Farm Debt 75.00Total 76.50 76.50 76.50Total Expenses 286.93 286.93 286.93Residual For Growth 13.07 73.07 -46.93

Dark Brown Flax

220

Peas

222

Peas: Situation & Outlook 2019 • For 2018-19, production decreased by 13% to 3.6 million tonnes

(Mt) due to lower harvested area, particularly in Saskatchewan and Alberta. Yields were similar to the previous year.

• Yellow and green pea types are expected to account for about 3.0 Mt and 0.4 Mt, respectively, with the remainder spread across other varieties.

• Supply has decreased by only marginally, to 4.2 Mt, due to higher carry-in stocks.

• Exports are forecast at 2.6 Mt, largely due to lower imports by India.

• This is expected to be partly offset by record exports to China. • Carry-out stocks are forecast to increase due to lower export

forecast. • The average price is expected to be similar to 2017-18, with lower

yellow pea prices offset by higher green pea prices. • There are expectations for an increase in carry-out stocks in 2018-

19. 223

Peas: Situation & Outlook 2019 • For 2019-20, seeded area is forecast to be relatively

unchanged from 2018-19 at 1.46 Mha, because of good returns relative to other crops.

• Dry peas continue to be recognised as a beneficial part of a crop rotation plan.

• Production is expected to rise marginally to 3.6 Mt, with an expectation of trend yields.

• Supply is forecast to rise marginally to 4.3 Mt due to similar carry-in stocks.

• Despite the tariff in India, exports to other countries are expected to rise from 2018-19 and carry-out stocks are expected to fall.

• The average price is expected to be marginally lower than 2018-19, due to lower green pea prices and ample world supply. 224

225

Dry Peas January 25, 2019

2017-2018 2018-

2019[f] 2019-

2020[f] Area seeded (kha) 1,656 1,463 1,460 Area harvested (kha) 1,642 1,431 1,435 Yield (t/ha) 2.5 2.5 2.51 Production (kt) 4,112 3,581 3,600 Imports (kt) [b] 12 20 15 Total supply (kt) 4,424 4,251 4,265 Exports (b) 3,083 2,700 2,800 Total Domestic Use (c) 691 901 935 Carry-out Stocks (kt) 650 650 530 Stocks-to-Use Ratio 17 18 14 Average Price (d) 265 255-285 245-275


10.5

6

6.5

7

7.5

8

8.5

9

9.5

10

10.5

111/

4/20

172/

1/20

173/

1/20

173/

29/2

017

4/26

/201

75/

24/2

017

6/21

/201

77/

19/2

017

8/16

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79/

13/2

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10/1

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1711

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71/

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/201

89/

12/2

018

10/1

0/20

1811

/7/2

018

12/5

/201

81/

2/20

19

Field Peas Green (dollars/bu)

226

7.37

5

5.5

6

6.5

7

7.5

8

8.5

9

9.5

10

1/4/

2017

2/1/

2017

3/1/

2017

3/29

/201

74/

26/2

017

5/24

/201

76/

21/2

017

7/19

/201

78/

16/2

017

9/13

/201

710

/11/

2017

11/8

/201

712

/6/2

017

1/3/

2018

1/31

/201

82/

28/2

018

3/28

/201

84/

25/2

018

5/23

/201

86/

20/2

018

7/18

/201

88/

15/2

018

9/12

/201

810

/10/

2018

11/7

/201

812

/5/2

018

1/2/

2019

Field Peas Yellow (dollars/bu)

227

4.59

3.5

4

4.5

5

5.5

6

6.5

71/

4/20

172/

1/20

173/

1/20

173/

29/2

017

4/26

/201

75/

24/2

017

6/21

/201

77/

19/2

017

8/16

/201

79/

13/2

017

10/1

1/20

1711

/8/2

017

12/6

/201

71/

3/20

181/

31/2

018

2/28

/201

83/

28/2

018

4/25

/201

85/

23/2

018

6/20

/201

87/

18/2

018

8/15

/201

89/

12/2

018

10/1

0/20

1811

/7/2

018

12/5

/201

81/

2/20

19

Field Peas Feed (dollars/bu)

228

Lentils: Situation & Outlook

• For 2018-19, production decreased by 18% to 2.1 Mt due to lower harvested area and yields.

• Large green lentil production is estimated to have risen from last year to 0.6 Mt and red lentil production fell to about 1.2 Mt.

• Production of the other remaining lentil types is estimated to have risen to 0.3 Mt.

• Supply, however, increased marginally due to large carry-in stocks.

• Exports are forecast to increase to 1.8 Mt.

230

Lentils: Situation & Outlook

• To-date Mexico, United Arab Emirates and India are the top export markets.

• Imports are expected to be lower than the previous year due to the above average grade distribution.

• Carry-out stocks are expected to fall due to the increase in exports.

• The overall average price is forecast to fall below the levels achieved in 2017-18 due to weaker world demand, larger domestic carry-out stocks and an above average proportion of grade distribution at the No.1 or 2 grade.

231

Lentils: Situation & Outlook • For 2019-20, area seeded in Canada is expected to fall

11% to 1.35 Mha, due to weak prices for the No.1 grades the previous year.

• Production is forecast to fall by 4% to 2.0 Mt. With lower carry-in stocks, supply is expected to fall to 2.8 Mt, the lowest since 2014-15.

• Exports are forecast to rise from 2018-19 to 1.8 Mt with a lower exportable supply.

• Carry-out stocks are expected to fall sharply. • With the assumption of an average grade distribution

and grade discounts, the overall lentil price is forecast to rise from 2018-19.

232

234

Lentils [a]: January 25, 2019

2017-2018 2018-2019[f] 2019-2020[f]

Area seeded (kha) 1,783 1,525 1,350 Area harvested (kha) 1,774 1,499 1,335 Yield (t/ha) 1.44 1.4 1.5 Production (kt) 2,559 2,092 2,000 Imports (kt) [b] 35 15 20 Total supply (kt) 2,908 2,984 2,820 Exports (b) 1,537 1,700 1,800 Total Domestic Use (c) 495 484 485 Carry-out Stocks (kt) 876 800 535 Stocks-to-Use Ratio 43 37 23 Average Price (d)

475 375-405 390-420


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Mustard

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Mustard • For 2018-19, production rose sharply to 173 kt, due to

higher area and yields. Production of yellow and brown types of mustard increased and oriental types fell.

• Supply, however, increased by only 8% due to lower carry-in stocks.

• Exports are expected to be higher than last year at 115 kt. • Due to larger supply, carry-out stocks are forecast to

increase. • The US and the EU are expected to remain the main export

markets for Canadian mustard seed. • The average price is forecast to fall due to higher Canadian

and world carry-out stocks.

243

Mustard

• For 2019-20, the area seeded is expected to remain unchanged due to improved yields from the previous year.

• Production, however, is forecast to 180 kt due to similar expected yields.

• Supply is expected to be higher due to larger carry-in stocks and production.

• Exports are expected to be higher at 120 kt and carry-out stocks are forecast to increase and pressure prices.

• The average price is forecast to fall when compared to 2018-19.

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Mustard Seed [a]: January 25, 2019

2017-2018 2018-2019[f]

2019-2020[f]

Area seeded (kha) 156 204 205 Area harvested (kha) 153 197 200 Yield (t/ha) 0.8 0.88 0.9 Production (kt) 122 173 180 Imports (kt) [b] 9 5 5 Total supply (kt) 211 228 255 Exports (b) 112 112 120 Total Domestic Use (c) 49 46 45 Carry-out Stocks (kt) 50 70 90 Stocks-to-Use Ratio 31 44 55 Average Price (d) 770 670-700 650-680


Canary

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Canary Seed

• For 2018-19, production fell sharply to 118 kt due to lower area and yields.

• Exports are expected to be lower than last year.

• The EU and Mexico are forecast to remain the main export markets, followed by Brazil and the US.

• The average price is forecast to be higher than the 2017-18 level.

250

Canary Seed

• For 2019-20, the area seeded is forecast to be higher than the previous year due to good potential returns compared to other crops.

• Production is expected to rise slightly as higher area seeded is partly offset by slightly lower yields; supply is also forecast to decrease.

• Exports are expected to be lower than in 2018-19 and carry-out stocks are expected to remain tight.

• The average price is forecast to be lower than the previous year.

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Canary Seed [a]: January 25, 2019

2017-2018 2018-2019[f] 2019-2020[f] Area seeded (kha) 103 86 95 Area harvested (kha) 103 85 94 Yield (t/ha) 1.41 1.39 1.33 Production (kt) 145 118 125 Imports (kt) [b] 0 0 0 Total supply (kt) 165 133 130 Exports (b) 147 125 120 Total Domestic Use (c) 3 3 5 Carry-out Stocks (kt) 15 5 5 Stocks-to-Use Ratio 10 4 4 Average Price (d) 465 480-510 470-500


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Cattle

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Canadian Dollar – US

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1.5% increase in US Beef Cows in 2019 = 475,845 head

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U.S. Cattle on Feed • Cattle and calves on feed for the slaughter market in the United States for

feedlots with capacity of 1,000 or more head totaled 11.7 million head on December 1, 2018.

• The inventory was 2 percent above December 1, 2017. Placements in feedlots during November totaled 2.00 million head, 5 percent below 2017.

• Net placements were 1.92 million head. • During November, placements of cattle and calves weighing less than 600

pounds were 550,000 head, 600-699 pounds were 495,000 head, 700-799 pounds were 416,000 head, 800-899 pounds were 315,000 head, 900-999 pounds were 115,000 head, and 1,000 pounds and greater were 105,000 head.

• Marketings of fed cattle during November totaled 1.87 million head, 1 percent above 2017.

• Marketings were the highest for November since the series began in 1996.

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March Futures as of Jan 29, 2019

277

Live Cattle Futures April 2019

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Total cattle inventories, July 1, 2017 & 2018, Proj 2019 Jan 1 thousands of head

2018 inventories 2017 inventories 2019 Proj

Canada 12,435.00 12,535.00 12,505

Alberta 5,060.00 5,135.00 5,105

Saskatchewan 2,600.00 2,630.00 2,613

Ontario 1,613.80 1,622.50 1,610

Quebec 1,140.00 1,135.00 1,145

Manitoba 1,120.00 1,135.00 1,125

British Columbia 680 660 682

Atlantic provinces 221.2 217.5 225

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Yesterday Week Ago Year Ago A Steers Alberta $159.81 $160.34 $163.35

Ontario $141.99 $137.90 $136.55 Nebraska ($ U.S.) $122.49 $123.05

D1/D2 Cows Saskatchewan $80.00 $79.00 $85.50 Alberta $83.50 $82.00 $88.00

Ontario $59.81 $50.78 $61.73 South Dakota ($

U.S.) $50.50 $47.75 $56.75

700-800 lb. Feeder Steers Saskatchewan $192.33 $192.90 $185.33

Alberta $194.95 $195.56 $185.27 Ontario $187.36 $197.82 $193.45

500-600 lb. Feeder Steers Saskatchewan $222.50 $215.50 $225.08

Alberta $224.15 $219.09 $223.14 Ontario $216.44 $211.12 $220.31

Friday, January 25, 2019

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Hogs - Index 100 Saskatchewan

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Cow-Calf Production Costs - September, 2018 Based on a 150 Cow Herd A. Revenue Revenue/Cow 1. Estimated Sale Weight 625 1.01 Estimated Price 1.90 Total Income 1,188 178,125 A. Operating Costs Cost/Cow Total Cost

1. Feed Costs 1.01 Grain and Concentrates $25.61 $3,842 1.02 Forages $355.10 $53,265 1.03 Salt & Minerals $37.55 $5,633 1.04 Extended Grazing Forages $29.36 $4,405 Total Feed Cost $447.62 $67,145 2. Other Operating Costs 2.01 Straw $40.00 $6,000 2.02 Veterinary Medicine & Supplies $19.17 $2,876 2.03 Breeding Costs $37.58 $5,637 2.04 Fuel, Maintenance & Repairs $37.55 $5,632 2.05 Utilities $10.84 $1,626 2.06 Marketing & Transportation $37.14 $5,570 2.07 Death Loss $19.69 $2,953 2.08 Manure Removal $7.23 $1,084 2.09 Insurance $12.91 $1,937 2.10 Herd Replacement $94.50 $14,175 2.11 Pasture Rental $60.13 $9,020 2.12 Miscellaneous $6.67 $1,001 Subtotal Operating Costs $831.02 $124,656 2.13 Operating Interest $23.89 $3,584 Total Operating Costs $854.91 $128,240 Income $333 $49,885 Off Farm Income $233 34950 Living Costs 300 45000 Dent Payment Per Cow 200 30000 Residual For Growth $66 $9,835

Brad Magnusson 1-204-792-4095

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Agricultural Outlook 2019 - PCCU · market • Global Warming – In ussia where annual...

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