There Will Not Be 17 Million Canola Acres In Western Canada in 2009

There is much speculation around canola acres for 2009 in Western Canada. Farmers are hesitant to order canola seed, retailers are hesitant to speculate on inventory, distributors are cautious, and seed companies will not treat on speculation just to make sure seed is available for spring. What we have here is a system that is so built on just in time inventory management that with every day that passes the opportunity for the industry to supply 16 to 17 million acres of seed becomes impossible.

What makes this year different than others is that the industry has the bare seed available to supply these records acres. The challenge is that orders are very slow as farmers have shown hesitation across the prairies in ordering canola seed. This wait and see strategy is applicable in cereals but in canola it could cause forced seed shortages to the marketplace. Canterra Seeds, Brett Young, Monsanto (Dekalb) and Pioneer do not treat their entire inventory and wait for the farmer to make up his mind. All bare canola seed is not treated until the order has been placed by the distributor who has an order from the retailer who has an order from the farmer.  The reason that no one in the chain is willing to spec on inventory to ensure that there is in season supply is because the inventory carry over penalties are very punitive. Probably the only company that treats all of its inventory every year regardless of orders is Bayer (Invigor) because they are always sold out with the exception of this year.  The only companies rumored to be up in sales versus last year at this point are Dow (Nexera) and Cargill (Victory).  

My suggestion is that if you are planning to plant canola this spring book your seed now to ensure that you have supply.  If there is going to be demand for 16 to 17 million acres it will be a good idea to have your canola seed variety ordered.  Based on the just in time system that we have created to manage inventory costs, everyday that passes without canola orders will raise the probability that canola acres will not reach 16 or 17 million acres this year because there will not be enough seed on the retailers warehouse floor.  The big variable is whether or not one of the companies places a  big bet and treats a bunch of spec seed to ensure they will be able to supply the short market in the spring.  It should be interesting.    

 

Shaun Haney

Shaun Haney is the founder of RealAgriculture.com. He creates content regularly and hosts RealAg Radio on Rural Radio 147 every weekday at 4PM est. @shaunhaney

Trending

Recognizing Respiratory Distress in Cattle

Respiratory disease and distress can be caused by a variety of factors, ranging from viruses to drastic changes in diet. Signs and symptoms, though alike, often go undetected, their subtleties akin to those of other prey animals, who mask illness in order to fool predators. By the time producers or health professionals recognize symptoms, the ailment…Read more »

Related

Leave a Reply

 

This site uses Akismet to reduce spam. Learn how your comment data is processed.