Highlights of 2021

The Prairie drought was obviously the biggest headline, but 2021 also featured a number of other compelling stories and developments in Canadian agriculture, including a string of new canola processing plant announcements and the official end of the BSE era in Canada.

Here's a quick look at what made the ag news this past year.

Richardson announces new canola crush plant

Winnipeg-based Richardson International Ltd. announced plans in March to double the processing capacity of its Yorkton, SK canola plant to 2.2 million tonnes. “The global outlook for Canadian canola oil is promising, and this latest investment emphasizes our ongoing commitment to best-in class-facilities,” Darrell Sobkow, Senior Vice-President, Processing, Food, and Ingredients, said in a release.

Cargill follows suit

Amid growing global demand for canola products, Cargill in April said it would build a new $350-million processing plant in Regina with an annual crush capacity of 1 million tonnes. As part of the same announcement, the company also said it would update and modernize its canola facilities in Camrose and Clavet over the next 12 months to increase volume and broaden capabilities at both locations. “We are confident in the continued growth and competitiveness of the canola processing industry and look forward to helping farmers access increasing market demand,” said Jeff Vassart, President of Cargill Canada.

Viterra gets in on the action

Hot on the heels of Cargill’s announcement, Viterra said it planned to also build a new canola crush plant in Regina, with an initial targeted annual crush capacity of 2.5 million tonnes.

In a release, Viterra said it expected oilseed crush demand to continue strengthen over the long term, given demand growth for canola oil in food usage, as well as increases in meal consumption in animal feed markets. Additionally, the new plant is expected to play a key role in supplying the feed stock required for renewable fuel production.

. . . And then Ceres

In May, Minneapolis-based Ceres Global announced it would build a new $350 million canola facility at Northgate in the southeastern part of Saskatchewan near the US border. The plant will have the capacity to process 1.1 million tonnes of canola and refine over 500,000 tonnes of canola oil, for both food and fuel, annually.

Robert Day, President and Chief Executive Officer at Ceres, cited growing demand for oilseed crush in North America, particularly as it relates to biofuel, as the motivation behind the plant.

Initial farmer response to strong canola prices only muted

In its first survey-based estimate of 2021 planted area in April, Statistics Canada initially pegged nationwide canola intentions at 21.52 million acres, a modest 3.6% increase from a year earlier and on the low end of pre-report trade expectations that ranged from 21.5 million to 23.2 million acres. The market may have been screaming for more acres, but Canadian canola growers indicated they only intended to answer that call quietly. However, final canola planted area ended up at 22.4 million acres, up just over 8%.

Rapid Prairie seeding pace

By mid-May, the planting of the 2021 crop in Saskatchewan was already more than one-third complete, well ahead of last year and the five-year average. Planting was progressing at a brisk pace in Manitoba and Alberta, amid mostly spring dry conditions.

Strong farm cash receipts

A Statistics farm income report in May showed total farm cash receipts for Canadian farmers through the first quarter of 202 year amounted to $19.8 billion, up $2.7 billion or 15.5% from the same period in 2020 – a year which saw the largest annual gain in farm cash receipts (+8.3%) since 2012. Later in November, StatsCan report rational farm cash receipts totalled $58 billion in the January-September period. That was up 11% or $5.8 billion from the same time in 2020.

BSE era in Canada officially closes.

The World Organisation for Animal Health (OIE) recognized Canada in May as being at negligible risk for Bovine Spongiform encephalopathy (BSE), a change that is expected to allow expanded access to foreign markets for various beef products currently limited by BSE-era restrictions. Attaining negligible risk status – from its former status of controlled risk - now puts Canada at the lowest level of risk for BSE alongside the US, which attained negligible status in 2013.

Canada’s first case of BSE was discovered in Alberta in May 2003 and led to international borders closing to Canadian beef - a huge impact given that fully half of Canadian beef is exported. Although difficult to fully quantify the direct economic impacts of BSE, cattle industry losses between just 2003 and 2006 were estimated at anywhere from $4.9 billion to $5.5 billion, according to the Canadian Cattlemen’s Association.

A case of Atypical BSE discovered in Alberta in December was not expected to alter Canada’s hard-won BSE status.

Heat and dryness push crops past the point of no return.

Nearing the end of July, it was already considered too late for many Prairie crops. “Crops remain extremely stressed from the lack of moisture and continue to advance quickly due to the heat and dry conditions throughout the growing season,” a Saskatchewan crop report said.

Drought misery deepens

Drought expanded and deepened from Vancouver Island all the way to Northwestern Ontario in July as well-below precipitation combined with sizzling temperatures. As of the end of July, essentially all of western Canadian agricultural area was enveloped in severe to extreme drought, with a large pocket of exceptional drought (the worst of the four drought categories) also plaguing south-central Manitoba.

The high temperatures in July – with some Prairies readings reaching 40s degrees C – were due to a high-pressure ridge, which created a heat dome stretching from Vancouver Island to Manitoba and into the Northwest Territories at its peak. “The system was unprecedented in its intensity and duration and resulted in hundreds of record temperatures being set. . .” the monthly drought monitor said.

July the hottest month on record.

In a month that saw temperatures soar into the 40s degrees C in parts of the Canadian Prairies and crops burn up in the field amid both heat and dryness, the National Oceanic and Atmospheric Association (NOAA) reported the combined land and ocean-surface temperature in July was 1.67 degrees F (0.93 of a degree C) above the 20th-century average of 60.4 degrees F (15.8 degrees C). That made it the hottest July since records began 142 years ago.

Canola prices hit new high as temperatures rise

Hot, dry weather across the Canadian Prairies – the largest canola production region in the world – sent canola prices to new record highs in summer. The market would eventually breech the $1,000/tonne mark, with the nearby March contract continuing to hold above that level as the calendar flipped over to 2022.

Early production estimates down but still too optimistic

Statistics Canada’s initial crop production report in August showed big drops for most crops compared to a year earlier. However, those estimates mostly continued to get smaller. StatsCan initially pegged canola output at 14.74 million tonnes, down by almost one-quarter from 2020. By September, that estimate had slipped to 12.8 million and by the agency’s final estimate in December it was down to 12.6 million.

A rare inbound grain shipment.

Grain movement at the Port of Thunder Bay in Ontario included a rare inbound cargo of feed wheat, according to a monthly port report. A 12,000-tonne shipment of feed wheat was delivered to Richardson's Current River elevator from the company's facility in Hamilton, Ont. The wheat was said to be destined for Manitoba feedlots where drought had cut into local feed supplies.

Thunder Bay elevators typically load out 8 million tonnes of grain annually, but records of inbound shipments are almost always non-existent, according to the report.

CP wins merger battle

A long and winding merger road finally come to an end for Calgary-based Canadian Pacific and Kansas City Southern (KCS) in September. The two railways on Wednesday announced a deal that will see CP acquire its US counterpart in a $31-billion deal after takeover rival Canadian National dropped out of the running.

“Our path to this historic agreement only reinforces our conviction in this once-in-a-lifetime partnership,” said CP President and Chief Executive Officer Keith Creel. “We are excited to get to work bringing these two railroads together. By combining, we will unlock the full potential of our networks and our people while providing industry-best service for our customers. “

The merger creates the first U.S.-Mexico-Canada rail network.

New yield record for Ontario corn producers?

In its Dec. 3 crop production report last week, Statistics Canada put the average Ontario corn yield at 175.2 bu/acre, down from the agency’s September estimate of 179.1 but up from 163.9 a year earlier. However, Greg Stewart, Maizex Agronomy Lead, said he would not be surprised if the real average reaches 200 bu/acre or better – easily toppling the current Agricorp yield record of 183 bu/acre achieved in 2018.

In fact, the final yield may even outpace a Maizex crop tour estimate earlier in the year that put the provincial average at almost 192 bu/acre, Stewart said.

“The numbers were big, the numbers were good everywhere we went,” he said of the Maizex crop tour findings. “There is a chance - a chance - the final Agricorp number could start with a 2.”

Farmland values still rising

Canadian farmland values continued to tick higher through the first half of this year, although the longer-term outlook remains uncertain given this season’s drought on the Prairies.

A mid-year review of farmland values conducted by Farm Credit Canada (FCC) showed the average value of Canadian farmland increased by 3.8% in the January-June 2021 period, little changed from the 3.7% gain seen during the same six months last year.

For the 12-months between July 2020 and June 2021, national farmland values were up 6.1%, slightly higher than the 5.4% gain FCC reported in March for the Jan. 1 to Dec. 31 2020 period.

Average farmland values have increased in Canada every year since 1993; however, increases were more pronounced from 2011 to 2015 in many different regions. Since then, Canada has seen more moderate single-digit increases in average farmland values.

Flooding cuts off Port of Vancouver

As much as 200 millimetres of rain in mid-November triggered mudslides and cut access to rail lines and highways east of Vancouver. The natural disaster forced the Port of Vancouver – a major grain export facility - to halt all rail shipments going in and out. However, the outages were relatively brief, with both national railways operating again within a number of days.