Canada Markets

Saskatchewan Agriculture released its Crop Planning Guide 2015 this week to provide an early look at cropping choices for the upcoming year given a set of assumptions made. The publication cautions that this work is simply an estimate and does not use provincial cost of production averages, while instead, acts as a starting point or guide that can be modified to reflect the expected costs and revenues for a specific operation.

The 2015/16 crop year will prove to be a challenge, given the data released in the report and clearly indicates why producers would be "hunkering down" as suggesting in a recent producer chat site thread.

For example, of the 12 stubble-seeded crops looked at, nine are indicated to generate a negative return (return over total rotational expenses) in the brown soil zone, given current assumptions, while last year's report showed just two of these same crops showing a negative return. In the dark brown soil zone, four of the 12 crops are shown to result in a negative return in 2015 compared to two last year, while in the black soil zone, five of the 12 crops looked at are indicating a potential for negative returns as compared to just one last year.

The top two opportunities across the province seen in this research would be large green lentils, with stubble crop returns ranging from $96.35/acre in the black soil zone to $199.12/acre in the dark brown soil zone. With prairie lentil forecasts indicating ending stocks to reach the tightest level since 2010, prices are expected to remain firm while increased acres may allow stocks to build. The highest stubble crop per acre return is shown for large green lentils grown on the dark brown soil zone at $199.12/acre, followed by $184.33/acre on the dark brown soil zone.

For the second year, flax is viewed as a top cropping choice, with per acre returns ranging from a $4.35/acre loss in the brown soil zone to $49.29/acre return on the dark brown soil zone. New-crop prices posted in the $12 vicinity will certainly grab the attention of producers who want to diversify their acreage base.

Disappointing returns for the grains such as oats and barley could result in reduced interest in these crops. The weakest returns of all stubble-seeded crops are seen for oats, with losses ranging from $27.60/acre in the black soil zone to $58.37/acre in the brown soil zone. Oat seeded on the Prairies fell to a record low of approximately 2.8 million acres in 2014 and could possibly fall further in 2015.

Feed barley returns range from a loss of $12.93/acre in the black soil zone to a loss of $21.80/acre in the brown soil zone. Malt barley however, does show prospects, with returns ranging from a $1.69 loss in the brown soil zone to $34.11/acre in the black soil zone. Barley acres reached a record low of approximately 5.9 million acres in 2014 and could possibly slide further to the detriment of both the malt and feed industry.

Of the large crops, canola has the edge over spring wheat, showing returns ranging from a $25.42/acre loss in the brown soil zone to a positive return of $18.43/acre in the dark brown soil zone, which will likely lead to an increase in acres should rotations allow for this. Spring wheat returns range from a loss of $31.87/acre in the brown soil zone to a positive return of just $3.26/acre in the black soil zone.

DTN's 360 Poll asks how you view the year ahead and how it will affect your operation. You can respond on the 360 Poll found in the lower right of your DTN Home Page.

Cliff Jamieson can be reached at cliff.jamieson@dtn.com

Follow Cliff Jamieson on Twitter @CliffJamieson

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