Canada Markets
USDA Estimates Canada's Abandoned Wheat Acres
The October USDA World Agricultural Production report includes a look at Canada's reduced wheat production estimate due to abandonment, pointing at prairie drought conditions and crop insurance programs that allowed salvaging crops for badly needed livestock feed. DTN analysis has pointed to the potential for this revision for both the northern states and Canadian provinces in recent weeks.
The attached graphic is similar to the graphic included in the report, while the last bar is added to compare Statistics Canada and USDA data for 2021-22.
As indicated by the brown bars during the past 10 years, the abandonment rate for Canada's all-wheat acres seeded, using Statistics Canada data, ranges from 1.1% in 2012 to a high of 6.4% in 2016. The five-year average is 3.3%, while the 10-year average is 2.7%.
The most recent model-based analysis released by Statistics Canada in mid-September is based on an abandonment rate of 3.4%, while Agriculture and Agri-Food Canada's most recent September supply and demand tables are also using 3.4%. Statistics Canada is unable to update this estimate until the final estimates are released in December.
The USDA's latest estimates include a 10.5% abandonment rate for Canada's all-wheat crop. The result is a 2 mmt drop in the estimated production for Canada to 21 mmt, which is below Statistics Canada's 21.715 mmt estimate released on Sept. 14, based on August model-based data.
Applying this abandonment rate to Statistics Canada's current seeded acre estimate would results in an area harvested that is 1.6 million acres below the current official estimate at 20.994 million acres, while based on current yield estimates, would reduce Canada's all-wheat production by 1.596 mmt from current estimates to 20.1 mmt.
While seeded acres are estimated at the lowest level seen in four years, harvested acres based on this higher abandonment level would be the lowest harvested acres in 11 years, or since 2010.
The logic behind the USDA's take on abandonment may also be applied to crops like oats and barley and points to a further downgrade of Canada's potential on paper when Statistics Canada reports in December.
Cliff Jamieson can be reached at cliff.jamieson@dtn.com
Follow him on Twitter @Cliff Jamieson
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