Well, commodity markets in 2024 could have been worse and could have been better, says provincial crop market analyst Neil Blue.
“We have ended up in Alberta with a somewhat below average crop overall, but not a lot below,” stated Blue, who works with Alberta Agriculture and Irrigation. “Yields were highly variable as was the rainfall as far a regional hit-and-miss rains.”
Several factors led to lower prices on prairie staples like oilseeds and grains this year compared to other recent years, said Blue
“There seems to be a lot of different things affecting the markets, and maybe even more uncertainty than usual in the world with the wars, the political changes, and potential renegotiation of trade agreements, and the (U.S.) ethanol and bio-fuel policies, and currencies bouncing around,” he said. “And then we have this weather to influence the markets as well.”
Canola producers, in particular, said Blue, might have been left with a bitter taste in their mouths as 2024 unfolded, with prices ranging from a low of about $12 a bushel in August before rebounding somewhat into the $14 range to end the year. Not terrible, said Blue, but producers had hoped for more given how hot the export market to the United States has been this year.
“Canola prices have been volatile, and they have continued to fall from the record highs back in 2022,” he explained. “Prices have fallen off since then because of increased oilseed production across the world. There is only a certain extent Canada’s high quality canola can stand alone with its price.”
Blue said the weak Canadian dollar was generally supportive of greater exports of canola which were up more than 80 per cent from the same time last year based on strong demand for the U.S. production of biofuel and biodiesel. But the weaker dollar came with the drawback of making the input costs to grow canola and other oilseeds very steep. For a crop which already has more costly inputs than most other crops, it might have turned out to be a break-even proposition at best for many producers even with strong exports.
“I am not sure it will balance out, but certainly (higher export demand) is a positive to offset some of the price disadvantage; so at least crops are moving," confirmed Blue. "And generally, that’s the case for all crops. Exports are doing fairly well, and demand continues to be strong.”
Blue warns that the U.S. under the Biden administration, and it may carry on with Trump too, has been contemplating policies which may restrict the amount of imported canola allowed in to support the biofuels' industry in favour of domestic producers.
In fact, said Blue, Trump’s tariff threats have created a lot of uncertainty in the Canadian agriculture industry in general, and not just on canola.
“If the U.S. does go ahead with placing import tariffs on crops then it could potentially open some markets a little wider for Canadian exports to other countries other than the U.S.,” explained Blue, trying to find some silver lining in the situation. “So (the impact) remains to be seen, really. And that factor is one which will play out over the next four years.”
Alberta’s other two major crops outside of canola continue to be wheat and feed barley. For wheat, hard red spring wheat tends to be the bellwether for price. Blue said it is still a respectable $7.50 to $8 per bushel as the year closes.
“We had a really strong exports year last year supported by the third year in a row of a good quality harvest,” he said. “And that generally applies to all grains. The only problem is with dryness mainly in the southern part of Alberta and some of the eastern side, there was some really light weight on the bushel side for barley and wheat.”
Also Russian and Ukrainian dumping of wheat continues to be a suppressor on prices worldwide, said Blue, but even so the market continues to have capacity for strong Canadian exports. And durum (pasta) wheat, in particular, might be a great bright spot for Canadian producers. Blue also speculates if a farmer were looking for a bit of a darkhorse to grow a few more acres in 2025, durum might be it in the areas of southern and central Alberta. Durum exports have been up 35 per cent this year compared to last driven by strong demand in Northern Africa, Italy and the U.S.
“It does continue to have a premium price to hard red spring wheat,” he said. “It’s still a good crop and fairly drought tolerant.”
Durum is sitting in the $9 to $10 per bushel range.
Feed barley prices, on the other hand, are not spectacular, said Blue, but are still historically respectable. Prices range from $2.85 to $2.95 in Lethbridge country and moderate the further north one goes. Feedlots prefer to use feed barley whenever possible, said Blue, but a higher than average feed corn harvest coming out the U.S. has been a drag on barley prices too.
Blue said the most pleasant surprise this year for him has been the strong pea market driven by a limited time halt to import tariffs in the Indian market. Green and yellow pea exports have been up by 45 per cent this year over last.
Blue said the boon mostly benefited those traditional producers who were already planning to grow peas in 2024 before the Indian government announcement at the end of last year.
“Green peas in particular continue to be really strong at around $15 a bushel,” said Blue. “Yellow peas are hovering around $11 a bushel. And our pea exports have been really strong. India moved last December to set aside their import tariff on peas because they needed to buy for their needs. That import tariff has been postponed several times, and currently it is postponed until the end of this current calendar year.”
Overall, Blue said it has been a so-so year for farmers in terms of crop production and commodity sales, with further headwinds anticipated when Donald Trump formally takes office at the end of January, and as record crops expected throughout South America on soybeans and corn as well as greater wheat exports coming out of Argentina find their way into the market.
“The weak Canadian dollar overall tends to be somewhat of a supportive influence for our crop prices; though it tends to keep our input costs higher too,” said Blue. “As challenging as it is, it is still not as bad as it could be. So if prices stay up where they are and get stronger … (And) it’s also a matter of being in touch with the market and taking advantage of price rallies when they occur, because they can be somewhat fleeting right now.”
