2019 Ontario canola acreage estimated to be lower

Chinese trade deal and western glut affect Ontario price

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This year’s Ontario canola acres are estimated at 15 to 25 per cent less than in previous years because of lower international demand and lower domestic prices.

These numbers were estimated last winter after talk with industry professionals, salespeople and farmers. Final numbers won’t be known until crop insurance provider Agricorp releases its data.

Why it matters: China trade issues remain unresolved, directly affecting the western Canada canola market, and indirectly the Ontario market.

Although most of Ontario’s 40,000 acres of canola supply the domestic market, international trade problems caused by China’s refusal to buy Canadian canola greatly affects Western Canada and that has created a supply glut.

Hubert Beaudry, Ontario Canola Growers president and canola grower in Cache-Bay, Ont., says the provincial canola supply is a drop in the bucket of the provincial demand so excess supply in Western Canada lowers the Ontario price.

Hubert Beaudry.
photo: Hubert Beaudry

“Western Canada can’t export 40 per cent of their canola, seven to eight million tonnes. Processors out West are not taking canola; they were thinking their canola would be exported. Now they are sitting on it with their storage and it is full and they don’t know where to go with it.”

With no resolution of the China trade problem in sight, Beaudry says processors benefit because the oversupply caused by the dramatic decline in exports has caused a dip in prices.

China stopped all Canadian canola imports citing pest issues, although most observers say China acted in retaliation for Canada’s arrest of Huawei executive Meng Wanzhou, who is being detained under an extradition request made by the United States.

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If the trade issue with China is resolved, the price is likely to strengthen, Beaudry says, yet so many other factors can also affect the crop.

“Western Canada has been really dry, a lot of canola has been planted and it has been struggling. Unless they get rain really soon, I think the yields are going to be impacted. A big glut in canola, now so much of these factors are going to affect price too.”

As well, China continues to struggle with African swine fever and as hog barns there are emptied out from the disease, meal demand has dramatically lessened.

Meanwhile, canola is still needed in Ontario, Beaudry says.

“There’s still some profit on the table, not as much as what it used to be, but there is still good value in canola and I think growers who live in the areas where it is cooler, it usually works pretty good. It’s good for rotations, especially following winter wheat.”

About the author

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Jennifer Glenney

Jennifer is a farm reporter who lives in Cayuga, Ontario.

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