Ontario Drought Will Challenge Our Way Ahead

Cyrstal Lake 800
It is no secret that its getting very dry as drought affects Ontario.  If you look on any weather map it will show you just how dry it has being all spring and summer.  Michigan is the same way as Detroit television is talking about stressed and damaged crops as we head into the second week of July.  Meanwhile heavy rains have inundated much of the US corn belt.  Maybe this year for whatever reason it is our turn for no rain.  Let’s hope that changes in the next week.

With drought, you are only one rain away usually from it all changing and I think that’s where we find ourselves now in Ontario even after several weeks of little rain and hot temperatures.  I walked through 1988, which has always been used as the benchmark for droughts in North America.  What I remember about that year was how hot it was with days in 100°F and no rain until July 16th, 1988 when 2 inches of rain ended our drought.  So far in 2016, we are not close to that.  Needless to say, the mainstream media whether it be in Ontario or in Michigan has picked up.  Everybody wants rain.

At the present time the American corn crop has about 15% of their corn silking with most of the rest doing so within the next couple of weeks.  Rain is forecast for these areas and market prices have recognized this by dropping about 60 or $.70/bushel in the last few weeks.  It might even be a case of piling on because if trend line yields increase to maybe 171 bushels/acre from the 168 bushels/acre already forecast by USDA, the crop could grow into just under 15 billion bushels.  That’s almost science-fiction with regard to a production.  Needless to say, I don’t really want to go there.  With the Ontario crop wilting under pressure, it’s always very tough when the bigger production areas are so good that prices fall significantly.  So far in the last month that is what we have.

As of July 5th, according to Agriculture and Agri-Food Canada’s Drought Watch website, there are extremely dry conditions stretching from the Ottawa Valley to the Niagara Peninsula, stretching along the shores of Lake Erie to Windsor, and north through Algonquin Park to the shores of Georgian Bay and up to North Bay.  Of course where I am at Dresden Ontario, I’m well placed in this swath.  Within it, there is record dryness in eastern Ontario and the north shores of central Lake Ontario.  There has already been ir-repairable crop damage and it will take widespread rains within the next week to keep that from getting worse.

The agricultural economics of this are pretty clear.  If the drought continues there will be widespread crop insurance claims at the end of the year as well as a big hit to the Ontario GDP.  Depending on the scope of how dry it remains throughout the next six weeks, it might lead to a corn import basis in 2017 like we have not seen in many years.  In other words, we will need to import corn from the United States into Ontario as well as Québec.  I don’t want to really go there yet, but there are some people here in Eastern Canada who do not remember that.  We don’t always have record corn crops in Ontario like we’ve had the last five years.  I’m hoping we have a miraculous turnaround, but if we don’t corn will flow into Ontario and not neccesarily out.

First though, we have the wheat harvest in Ontario that is starting up in earnest in the deep South West.  The good news is that yields have been good and quality is very good.  If you grow wheat in Eastern Canada, you will know that sometimes that is very difficult.  I intend on harvesting next week and I am hoping the best looking wheat crop I think I have ever grown turns out to be the most abundant.  Wheat is the riskiest crop.   However let’s hope we have produced a wheat crop here in Ontario in these dry conditions that is one for the ages.  At least then, it might soften this drought-induced stupor that many of us find yourselves in.

If 2016 has taught us anything, its reinforced that old axiom, that “every year in farming is different”.  That is for sure, as last year I had heavy water damage on a couple of my farms from way too much rain in spring.  I finished replanting soybeans on June 29th.  This year its been like a desert, you go to work every day and it’s sunny and hot.  I no longer look at the weather forecasts. I just need one thing.    I know the rain will eventually come, because even in 1988 it eventually rained.