Unprecedented Agricultural Economic Times as Planters Start to Roll

      It has been a slow start to planting here in southwestern Ontario. The last few nights have been below freezing. The ground was frozen this morning and that doesn’t make it very palatable for putting seed in the ground.  It is the same way in large parts of the United States, but history tells us it can change very quickly I’m hoping over the next few weeks crops start rolling in the ground here in southwestern Ontario.

Hoping for normal is a good thing especially in a world like this when norms are being challenged. This past week we learned that the world’s richest man Elon Musk is intending on buying Twitter for $43 billion. That has soaked up a bit of the news oxygen over the last week when we weren’t talking about an escalation in the war in Ukraine.  Meanwhile, in the southern hemisphere this Safrinha crop in central Brazil is much drier than normal.   This has added up to our commodity prices going up faster and in the case of corn looking toward record levels.

It makes you wonder what is going to happen next. Some might argue that it depends on Putin’s military strategy. If it’s a case where he is trying to control all of the ports on the Black Sea that may skew grain markets for many years into the future.  As I have told you innumerable times, I am not a military analyst and do not pretend to be and don’t make things up when I don’t know.  I won’t go there. However, I think a little bit of personal clarity on my part is relevant here. I am no war hawk. I want peace to break out as soon as it can.

I say that partly because it only stands to reason I want the killing stopped. However, I also say that because I am alarmed with the escalation of offensive weapons being exported into Ukraine from places such as Canada.  We also realized that retribution may come in terrible ways.  I lived through the years of mutual assured destruction, always hoping that would never become reality. I continue to hope that and driving toward the brink of war in a far-off land is something I don’t want.

The reality is the world is messy and it does affect our daily agricultural economic lives. I had a 70 something farmer tell me the other day that he took a load of soybeans into the elevator and received something like $21.57 a bushel for those soybeans.  My comment was do you remember the times when sold at $10 and we thought it couldn’t get much better than that.   He laughed and said he sold beans for a lot cheaper than that and of course I have as well. The point is this time around the conversation regarding grain prices is drenched in blood reflecting our wartime markets. As we look into the future it is such an unknown paradigm where we’re going.

As farmers, we know that these are unprecedented times. I read my DTN colleague Katie Micik Dehlinger’s article “Ukraine War Boosts Need for Food Aid”, where she quoted Indermit Gill a Vice President at the World Bank.

“Overall, this amounts to the largest commodity shock we’ve experienced since the 1970s. As was the case then, the shock is being aggravated by a surge in restrictions in trade of food, fuel and fertilizers, “ Gill stated.

This was after a World Bank report which projected global corn prices to go up 20% in 2022 and with wheat expected to rise 43% at the same time. This is an aside to energy prices increasing 50% in 2022.  With many of our initial bills already coming due, Ontario and Quebec farmers surely know what this is all about.  Paying input costs this spring has the air about it like the black market.

That is no condemnation of our farm input suppliers, who through their organisations have been lobbying the federal minister of agriculture to do something about tariffs on fertilizer coming into Canada from Russia. It is only a reflection of the price rises mainly coming from a part of the world where a dark plan is being executed and on this side of the world as well as many other places farmers are holding the bag.

I was reminded this week by Statistics Canada that regardless of the farm input increases, that agency is predicting 2.321 million acres of corn in Ontario this year and 3.029 million acres of soybeans.  Th corn acres seems fanciful to me especially when they’re saying there’s 844,000 wheat acres left this spring.  My radar tells me a lot less corn acres than that despite the actual wheat acreage in my mind being much lower than 844,000.  I’m thinking more like 600,000 acres of wheat in Ontario.

So let the games begin. We could easily see record prices this year, as we are so very close to that now. The world continues to want all things agricultural commodities and the world is increasingly growing much more dangerous.  Peace breaking out would certainly be good for humanity but of course we know the world doesn’t work like that.  I’m hoping to have much of my corn crop planted next week at this time. Let’s hope the 2022 weather going forward is kind.