Over the past few years, Agriculture and Agri-Food Canada has released estimates for seeded acres for the principal field crops for the upcoming spring in their January Canada: Outlook for Principal Field Crops report. AAFC noted that, "For 2018/19, expected prices, input costs, delivery opportunities and moisture conditions are expected to play a crucial role in determining actual seeding decisions in the spring."
The next release of estimates comes from Statistics Canada's Principal field crop areas report, which is based on producer surveys conducted over the last half of March and released in late April.
DTN's approach to market analysis does not place significant emphasis on forecasts such as these; rather, it places more emphasis on signals from the market itself.
Given the three-year average percent change in AAFC's January estimates (blue bars), we see that the organization was consistently high in forecasting acres seeded to wheat over the three years (4.2%), while was also consistently high in its forecast for flax acres (31.1%). At the same time, it were consistently low in forecasting acres seeded to corn (minus 7.7%), with the three-year average percent change in brackets.
Using this same approach, Statistics Canada has been consistently high over the past three years in its forecast for wheat acres (3%), as well as flax (9.3%). The March intentions report also consistently underestimated acres seeded to canola (minus 5.4%), soybeans (minus 4.2%) and lentils (minus 8.4%).
Of the 10 crops selected, only two crops -- oats and dry peas -- show a divergence between the early AAFC estimates and the March intentions data released in April, with one overestimating and one underestimating, based on the three-year average. All other crops selected show both organizations either overestimating or underestimating in tandem.
Only two crops -- wheat and flax -- were consistently overestimated, given the two methodologies used over the three-year period.
Following the release of the Statistics Canada March intentions in April, we will revisit this analysis for potential implications for spring acres.
DTN 360 Poll
This week's poll asks what crop you think shows the greatest profit margin potential on your farm in 2018. You can weigh in with your thoughts on this poll found on the lower right side of the Canadian home page. We value your opinion.
Cliff Jamieson can be reached at email@example.com
Follow Cliff Jamieson on Twitter @CliffJamieson
© Copyright 2018 DTN/The Progressive Farmer. All rights reserved.