It was a very frosty week in Saskatchewan, which felt just right at -50 degrees Celsius. Inside the walls of Prairieland Park at the Crop Production Show, farmers were in a relatively good mood despite roughly 10% of the 2019 crop still out in the fields. After three days at the show, I decided to put together some observations based on conversations with RealAg Radio guests and farmers in the aisles.
1. Growers are sharpening their pencils to turn a profit:
Whatever the reasons that farmers are watching expenses and marketing strategies closely, these are needed habits in any year to maximize potential profitability. I heard from several farmers that they believe, with some discipline, 2020 has the potential to be a decent year. With the struggles of 2019 both agronomically and in trade, farmers are entering 2020 with decent optimism. I heard 2020 optimism described as “practical” and “conservative” throughout the week on the tradeshow floor.
2. The machinery industry is dealing with big inventory and lack of product releases:
Due to the above point of sharper pencils, farmers have slowed their purchases of equipment. We saw this downward trend in the year-end AEM flash report, and when you talk to manufacturers they will admit its a tough environment currently. Short-line manufacturers are attempting to manage inventory to not be caught with a lack of cash, a noted issue with Morris Industries recently filing for creditor protection for just these reasons. The result of slower sales in the equipment space has created a noticeable lack of new product releases this winter at Crop Production Show. We will watch closely if there are additional product releases at National Farm Machinery show or Ag in Motion in the year ahead.
3. Crop rotation intentions continue to be the focus, but action could be lacking:
This is the time of year that growers make the hard decisions on possible crop rotation changes for the coming year. There are agronomic and financial considerations that go into crop rotation choices. At this time of the year, farmers focus on the agronomics, but as we get closer to spring, crop prices tend to hold more sway in the decision. Rob Stone of Davidson, Sask., says, “I promised myself that I would not plant lentils this year for agronomic reasons, but as I see the pricing rising, that becomes more and more difficult every day.” There are many farmers in this same plane as they talk about reducing canola acres but like past years the financial realities are tough to resist. (Check out RealAg Radio from the show all week, here).
4. The Government of Canada is unlikely to choose a value creation model any time soon (if at all):
There has been much controversy regarding the royalty model the government will select regrading value creation for the seed industry. Two models were suggested for implementation that would work under UPOV 91, but consensus among farmers, government, and industry hasn’t happened over the last year. After several discussions with seed industry stakeholders this week there is a feeling that the government may not make a selection and the market will be left to decide. I have not been able to confirm this with the government, but I could definitely see this happening under the Liberal minority government. A couple seed companies told me that they are preparing pilot projects for the trailing royalty model to be tested within twelve months.
5. There is more attention on the mental health of farmers than ever:
Whether it’s the awareness campaigns, the increasing willingness to talk, or the general harsh adversity experienced in 2019, farmers are more than ever paying attention to the issue of mental health within agriculture. I had numerous farmers broach the subject with me over the course of the three days, and that’s a positive change.
If I missed any takeaways that you picked up on at the Crop Production Show please share them by emailing me at [email protected] or call the RealAg listener line at 855.776.6147