Canadian farmers abandon canola due to soaring fertilizer prices and fear of drought

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Biggest drop since 2019 comes as canola futures trade near all-time highs amid strong demand

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Soaring fertilizer prices and fears of drought are preventing Canadian farmers from planting more canola, despite record prices and growing demand.

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Oilseed acres, used in everything from salad dressings to frying, will likely decline 2.7% from a year earlier to 21.9 million, according to a Bloomberg survey of eight analysts. The biggest decline since 2019 comes as canola futures trade near all-time highs amid strong demand and trade flows disrupted by Russia’s invasion of Ukraine.

Farmers “are not going to push acres this year,” said Tony Tryhuk, branch manager of RBC Dominion Securities in Winnipeg, Manitoba, “whether it’s fertilizer costs or consecutive years of drought.”

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Canada is the world’s largest canola producer, and last year supplies shrank after a drought reduced production to the lowest since 2007. Farmers who give up canola could devote more acres to the wheat and soybeans, Tryhuk said.

Statistics Canada will release its estimates Tuesday at 8:30 a.m. in Ottawa.

Bloomberg.com

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