Softer but not soft
Crop and cattle prices in Alberta
By Rob Roach, ATB Economics 11 January 2024 1 min read
The average monthly prices of Alberta’s three largest crops in November were well below the records set back in June of 2022 (see chart).
The latest data from Statistics Canada show prices in November were lower than the previous November by 19% for canola, 18% for wheat (excluding durum) and 14% for barley.
According to a report from Farm Credit Canada, global wheat prices have fallen due to bumper crops in Russia and Turkey and improved transportation logistics out of Ukraine.
The same report cites a record canola crop in Australia and movement to less expensive vegetable oil sources as factors putting downward pressure on canola prices.
According to a recent article in The Western Producer, the switch to other options when feed barley was in short supply and reduced purchases of barley on the global market by Saudi Arabia (formerly the world’s leading buyer) have helped pull prices down from earlier highs.
Despite these downward trends, the price of all three crops remains higher than before the pandemic and well above the five-year averages. The U.S. Department of Agriculture links the elevated price environment to “inflation, extreme weather events, supply chain disruptions, high input costs, and Russia's war against Ukraine.”
The story for beef cattle is a little different. The average monthly price of cattle for slaughter peaked in June 2023 rather than in 2022 and was still 28% higher in November on a year-over-year basis. Prices were driven up by smaller herds in the wake of drought conditions in Canada and the U.S.
The price of cattle for slaughter has, however, fallen five months in a row and was 10% below the peak due to weaker consumer demand.
Answer to the previous trivia question: “Common Sense” is the name of the pamphlet calling for the independence of the American colonies written by Thomas Paine that was published on January 10, 1776.
Today’s trivia question: How many calories are in two teaspoons (10 mL) of refined canola oil?