Despite market and mould, farmers expected to keep schedule
Southwestern Ontario farmers have a big decision to make following a volatile 2018 that saw corn emerge as an unexpected bumper crop, soybean markets take a hit due to the still-running trade war between the U.S. and China, and a “catastrophic” outbreak of mould in corn due to a wet harvesting season.
As planting season nears, farmers have a tough choice: stick with the usual corn and soybean cycle, or lean into one of the two crops. Both options seem unappealing. “The carryout on soybeans worldwide, but especially in the U.S., is huge. It’s a record by leaps and bounds,” said Frank Backx, a grain merchant based in Forest. “There’s no shortage, and part of that is attributable to the trade issue, where China is not buying U.S. beans.”
In context, the soybean stocks-to-usage ratio in 2014 was a tenth its current rate. As a result, soybean prices based out of the Chicago Board of Trade — through which Canadian soybeans are priced — still have the crop value listed 15 to 20 per cent below its regular price due to tariffs imposed by China on U.S. imports, offsetting any added value for Canadians competing in a highdemand Chinese market.
The value of soybeans could always revert back to normal by the time Canadian farmers go to market with their soybeans, but a correction is hardly a sure – or even likely – thing.
“It’s significantly affected us,” Dave Park, a grain farmer in Lambton County, said. “In the spring, farmers will have the option to grow corn or soybeans. And farmers are a little gun-shy on corn due the quality concerns they had last year with it.”
The vomitoxin issue was arguably more detrimental to Ontario agriculture than the U.S.-China trade war. A cold, wet fall forced many farmers to wait before harvesting their corn, which triggered a widespread outbreak of DON — which causes mould — and concerns farmers could lose millions of dollars following an otherwise successful season.
The province eventually provided relief in the form of testing subsidies, but those did not quite offset projected losses.
“This DON issue was a one-off, or at least we sure hope it is,” Backx said. “Farmers are going to remember this corn issue for many years.”
Farmers are likely better off with their usual crop cycle of wheat, soybeans, and corn, he added. Rotating all three crops has been shown to prevent disease in the long term and to improve annual yields, and those who shift too far one way or the other could paint themselves into a corner.
“We stick to a pretty regular crop rotation,” Dave McEachren, a cash crop farmer near Glencoe, added. “(For) the soil health benefits and the risk management benefits. … I have’t seen any swing as far as acreage intentions go.”
Winter wheat crops usually have a bigger impact on soybean and corn planting, McEachren said. If that farmland doesn’t produce as expected it frees up additional farmland for either soybeans, corn, or both.
This year, he, Park, and other farmers are worried that exact scenario will play out due to a late planting season and a mild winter.
“I would say we’re slightly below average,” McEachren said, about planting winter wheat. “The concern is with how wet those crops have been, whether they really got well-rooted and established for the winter. “Those acres could easily go to either (corn or soybeans),” he added. “The choice is pretty open there.”
“It’s certainly going to put our management skills to the test,” Park said. “Hopefully brighter days are on the horizon.”