GRAEME BRUCE/BRANDON SUN
Market specialist Frayne Olson of North Dakota State University discusses the commodity outlook for North America during Manitoba Ag Days at the Keystone Centre on Tuesday.
The drought in the United States has left 2013 commodity markets tough to predict.
Market specialist Frayne Olson of North Dakota State University spoke at Manitoba Ag Days at the Keystone Centre on Tuesday, shying away from making bold commodity predictions for 2013, but explained the most recent numbers released by the U.S. Department of Agriculture.
Gov’t seeks input on policy
Manitoba Agriculture Minister Ron Kostyshyn spoke at Ag Days on Tuesday encouraging farmers and the public to provide input on a new policy framework.
Growing Forward 2 is based on a five-year agreement between federal, provincial and territorial ministers of agriculture in Whitehorse in September, which aims to help address agricultural challenges through research and innovation.
“Ongoing dialogue with the agriculture industry played an important role in shaping Manitoba’s position while negotiating Growing Forward 2,” Kostyshyn said.
Manitoba Agriculture, Food and Rural Initiatives will be holding regional meetings across the province, including in Brandon on Jan. 30 from 5:30 p.m. to 8:30 p.m. in the conference room at the Ag Centre, located at 1129 Queens Ave.
“MAFRI will continue to consult with industry organizations,” Kostyshyn said.
“We want to hear from the producers and processors, as well as the public, as for your options on GF2.”
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According to the latest USDA numbers, there simply isn’t enough corn being produced to meet the demand of ethanol, livestock feed, and exports.
"The question is, who is going to use less?" Olson asked.
Based on the current USDA estimates in 2013, there will be a 10 per cent cutback in ethanol use in corn, 38 per cent decrease in exports, and a decrease in feed usage, which Olson said is tough to estimate.
In North Dakota, Olson said many farmers in North Dakota will be looking to grow corn next season.
As for wheat, exports out of the Black Sea region — Russia, Kazakhstan and Ukraine — are ending, which means customers are now coming to North America for their wheat needs.
Exports from the Black Sea region are ending and concerns are growing about the condition of their winter wheat, conditions in the U.S. are very poor for winter wheat.
With a decrease in hard red winter wheat acreage in the U.S., the crop condition isn’t good, according to Olson. If the weather conditions continue to be hot and dry south of the border, there is going to have to be more wheat acres — which will have to come from the northern plains, including Manitoba.
Two years ago, Russia and Kazakhstan put up wheat export bans following a severe drought, which caused North American Wheat prices to climb during harvest, which rarely happens, according to Olson.
This year, the bans weren’t in place, and Olson said they are out of wheat.
"The exports out of that region are finally dropping off, to the point where some of the major customers that are normally buying from that region are coming to North America," Olson said.
China, for the first time in several years, re-entered the wheat market and purchased wheat from both Canada and the U.S. in 2012.
Olson said some analysts believe this could be a sign there is appetite for more North American commodities — including corn, soybean, and canola.
"It’s very, very difficult to get solid information out of China, it’s really tough to figure out what’s going on," he said. "But there are some signals we are picking up some wheat sales — I kind of hope that’s true, we’ll have to wait and see."
Republished from the Brandon Sun print edition January 16, 2013