A Look at AAFC's 2023-24 Grain Stocks Estimates
Agriculture and Agri-Food Canada's May Canada: Outlook for Principal Field Crops was updated to include Statistics Canada's recent March 31 stocks estimates as well as Statistics Canada's Seeding Intentions of Principal Field Crops data.
Both reports have been received with some skepticism. In 2022, the March 31 stocks report estimated farm stocks based on surveys with approximately 11,500 producers, while for the first time ever in 2023, farm stocks were "modelled using survey estimates and administrative data." In addition, the seeded acre report that is normally viewed as the March Intentions report was based on a smaller sample size of producers that were surveyed from mid-December to mid-January, months ahead of spring seeding.
Based on this month's estimates, 2022-23 ending stocks of all principal field crops in Canada were revised close to 1 million metric tons (mmt) lower from last month to 10.683 mmt, with the biggest changes including a 300,000-metric-ton lower revision in wheat stocks, a 170,000-mt-lower revision in barley stocks, a 350,000-mt drop in canola stocks and a 150,000-mt lower revision in dry pea stocks. In order to achieve this forecast, a 210,000 mt increase in principal field crop exports was made along with an 861,000 mt increase domestic use and a modest increase in overall grain imports.
As a result of Statistics Canada's seeding intentions estimates, AAFC revised seeded acres for all principal field crops higher by 247,100 acres, while the estimate for harvest acres is 256,984 acres higher. The overall average yield was tweaked higher by 0.02 tons/ha which resulted in 2023 production of all principal field crops of 95.741 mmt, just 0.3% lower than achieved in the previous year.
Exports of all principal field crops are forecast to increase by a modest 212,000 mt overall from 2022-23, while domestic use is forecast to fall by 883,000 mt year-over-year. Ending stocks for all principal field crops is forecast to rise by 1.337 mmt year-over-year to 12.02 mmt, or the highest seen in three years.
The attached chart shows the year-over-year change in forecast stocks for select crops from 2022-23 (blue bars) to 2023-24 (brown bars). Of the select crops, ending stocks of corn, oats, canola, flax and peas are poised to fall in 2023-24. Stocks of durum, wheat, and lentils are forecast to rise year-over-year, while stocks of soybeans are forecast to remain unchanged.
The elephant in the room when it comes to this report is a 1.5 mmt increase in the forecast for wheat stocks (excluding durum) from 3.5 mmt in 2022-23 to 5 mmt forecast for 2023-24, the largest change in stocks forecast for any crop.
It is interesting to note that AAFC increased its forecast for 2022-23 wheat exports by 50,000 mt this month to 19.650 mmt, with all-wheat exports forecast at 24.450 mmt. AAFC has increased its forecast exports for Canada's all-wheat exports in each of the past 13 months.
This compares to the upward revision in the USDA's May World Agricultural Supply and Demand Estimates (WASDE) forecast of 1 mmt for Canadian all-wheat exports to 26 mmt, an opinion they also held in the month of January.
Jumping ahead to 2023-24, AAFC is forecasting Canada's all-wheat exports at 24.750 mmt, up 300,000 mt from its current crop year forecast, while the USDA has forecast Canada's exports will rise to a record 27.5 mmt for the crop year ahead.
While the USDA is painting a more optimistic view of Canada's wheat export potential, they are showing a more bearish view in its forecast for Canadian canola in 2023-24. The USDA has pegged Canadian canola production at 20.3 mmt in 2023, well above the 18.4 mmt forecast by AAFC. While the forecast for crop year exports is similar, only 100,000 mt apart, the USDA sees ending stocks in 2023-24 growing to 1.320 mmt which compares to the 600,000 mt forecast by AAFC.
Cliff Jamieson can be reached at email@example.com
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