Aug 4, 2017
2017 mid-season update from the field
The volatile weather expeienced across Canada so far during the 2017 growing season has, once again, reiterated the need for a well-diversified farmland portfolio amidst unpredictable and challenging farming conditions. At the time of writing this blog, there are more than 150 wildfires burning throughout the interior of British Columbia due to abnormally dry weather and forcing over 6,000 people from their homes. In Saskatchewan over 60% of the province’s topsoil is considered short or very short of proper moisture levels. Meanwhile in Ontario, accumulated rainfall to date is 4 times that of 2016. The Maritimes have had relatively normal conditions so far this season.
The dry conditions in the prairies made for ideal seeding conditions but continued dryness will, with the exception of irrigated areas in southern Alberta, likely depress yields across much of the west in 2017. The rains in SW Ontario that delayed planting show little sign of abating, however, progressive farmers using good management techniques should expereince reasonably good yields.
Challenging growing seasons such as these also highlight the benefit of partnering with top-grade farmers who use progressive practices and sophisticated agrology analysis in their farm management techniques. We are seeing dramatic differences in the fortunes of farmers across the country between those who use excellent management techniques and those who do not. The former are experiencing average-to-good yields at this point in the season, while many others are seeing poor yields.
The revenue impact to Canadian farmers from a rebounding Canadian dollar has largely been offset by stronger agricultural commodity prices across the board and global demand for Canadian-based crops such as canola and lentils remains strong.
While Canadian farmers are facing challenges this growing season, most are coping reasonably well and maintain a bright outlook for years to come. Sadly, recent news from abroad is not so positive for farmers elsewhere.
- May 2017 was the 2nd warmest May on record worldwide in 137 years
- Russia’s wheat crop is predicted to be 17% lower than anticipated due to bad weather
- Much of Europe is dealing with the worst heat wave in a decade creating widespread droughts and wildfires
- Drought conditions have returned to the US Plains and parts of California
- FAO reported that 19.4% of China’s arable land is contaminated
- A study released by MIT predicts that much of South Asia – home to a fifth of the world’s population – will be too hot for food production and human survival by the end of the current century.
Against this backdrop, investing in a widely-diversified portfolio of farmland in Canada – a politically stable country whose ag sector is expected to be a net beneficiary of climate change - looks very attractive indeed.