Ag’s New Frontier: Russia And Even a Place Like Nova Scotia

Last week my corn harvest continued amid record yields. Its taking me a long time, one, because of fickle weather and two, that good problem of having to pull all that volume out of the field. I quit early last Tuesday and headed toward London Ontario where I was speaking on the grain markets to the Agromart Group, a company of farm supply businesses, which stretch all the way East to Nova Scotia. There isn’t a lot good to say about grain prices, but at least it’s not static. Even where we find ourselves now, I tried to offer some hope to the Agromart people.

A common conversation that I get in any time I speak at an event is how the crop has fared throughout the province. A common theme at the meeting was about the big corn yields being heard about across Ontario. Many elevators were plugged especially in Eastern Ontario as through put capacity is not as great as the amount of grain that can be supplied. It’s a completely different story in southwestern Ontario where corn is stored on the ground. My first 100-acre field of corn yielded 233 bushels per acre. This is reflective of what many fields in the area are doing between Chatham and Dresden Ontario.

That corn yield is a record for me on that farm, but it beat the record set two years previous of 228 bushels per acre. It has got me thinking that I have to start changing my yield expectation paradigm. This past summer Statistics Canada estimated Ontario would have an average corn yield of 169.5 bushels per acre. I remember at the time being a skeptic at that number, thinking that there is no way that could be true. However, after seeing my own yields as well as many other yield monitors posted on Twitter, it’s pretty evident to me Ontario and the greater US corn belt has a super crop.

Of course, last week I mentioned the USDA and their surprising estimate of 175.4 bushels per acre corn yield in the United States. It makes me think that the January 2018 final estimates from the USDA might go even higher. It would seem that these modern corn hybrids are increasing the yield curve exponentially compared to several years ago.

I’ve been thinking about this at length this week because as you all know I have a career in production agriculture that spans all my life. These corn yields I’m getting now are something that I probably could have never imagined in my younger days. It also makes me think about the agricultural production potential not only in Ontario but everywhere else in the world where they grow crops. These corn hybrids are easily transferable to everywhere else along with all of our technology. I’m bullish on production around the world. In our current agricultural environment with markets in such a bearish mode, it’s hard not to be.

I had an incredibly interesting conversation with an Agromart owner from Truro, Nova Scotia. For those of you who do not know where Truro Nova Scotia is, its in Canada’s eastern most mainland province surrounded by the Atlantic Ocean, the Bay of Fundy and Northumberland Straits. It is not an agricultural hotbed, far from it even though in Nova Scotia it would hold that title. Needless to say, I was told that 200-bushel corn was coming out of the fields there. I was told global warming has made it possible for this to happen along with modern corn hybrid genetics. I had no reason to doubt the man. I was shaking my head. If they could do it there, it could be done almost anywhere.

For some reason when thinking about that particular instance, I got thinking about Russia, that other big country in the northern hemisphere with the polar climate. Russia and Canada’s agriculture benefit from global warming simply because of our geography. Russia is currently exporting a record wheat harvest and taking market share away from their European competitors in some of the bigger wheat markets like Egypt, Turkey, Bangladesh, Indonesia and Nigeria. Russian agricultural potential seems huge, 2017 might be a harbinger for that.

Of course, my Agromart colleague from Truro was talking about selling his corn for $6 and $7 per bushel. Even I can figure out at 200 bushels per acre, he’s doing pretty well. His basis is what it is, mine back in southwestern Ontario where there is lots of corn is so much different. He calls Nova Scotia, the land of agricultural opportunity.

Of course, that was a bit of news for me. Needless to say, it’s true for so many other places around the world. There is huge agricultural potential yet untapped, whether that’s in Russia, Asia, Africa or even a place like Nova Scotia. The challenge will be to find your own way through this world. Competition and low prices might become more institutionalized. Whatever. This is our new agricultural world. In order to succeed, risk management will need to be an even larger part of that scenario.