Sask. canola producers seek China resolution as seeding begins

As the Canada-China canola saga nears the eight-week mark, Saskatchewan producers are hoping for a solution as seeding gets underway.

In the last two months, China has sent non-compliance notifications to Richardson International Ltd. and Viterra Inc., two major Canadian exporters of canola seed.

China said customs inspectors said they found "dangerous pests" in shipments from Canada.

"We know that we produce a quality product that is shipped to other huge markets around the world and we don't have any other quality concerns," said Lane Stockbrugger, chair of the SaskCanola board.

He said Canadian food inspectors have not found evidence of pests like China had claimed.

"I certainly didn't expect that we would have it resolved by the time we seed the crop but there's definitely concerns as as more and more guys are getting close to seeding," Stockbrugger said.

"China is absolutely one of the biggest markets that we sell into. It goes beyond even just Saskatchewan farmers into the Canadian economy as a whole. But here in Saskatchewan it's in the range of $3 billion that is going outside of this market for us to sell into."

China represents 40 per cent of Canada's canola seed export market.

"Halting one of our biggest trading partners for canola, it's drastic, and it's going to hurt the bottom line not only of farmers but also of exporters and even people that are doing the process and the crushing. It's far reaching," Stockbrugger said.

The per-bushel price for canola has gone down to to around $9.50, from $10.50 earlier in the year.

Stockbrugger said there is product carryover from last year that, coupled with predicted carryover from this year, will depress prices.

"As farmers we're seeing at least 10 percent off of the price that we would have in the earlier parts of 2019. So that's real money. As we prepare for the 2019 crop, there's still some of the 2018 crop in the bin."

Stats Canada predicts less canola seeded in 2019

A new report from Statistics Canada says concerns over access to the Chinese market could lead to less canola being seeded by Saskatchewan this year.

Stats Canada released its seeding predictions on Wednesday.

"Record high year-end stocks for the 2018 calendar year, coupled with concerns regarding limited access to China's canola market, possibly affected anticipated seeding area. These factors have contributed to lower than average prices, which may have some farmers considering seeding fewer acres of canola or other crops," the report said.

Saskatchewan farmers are expecting to plant 11.7 million acres of canola in 2019, down from 12.4 million acres in 2018.

Across the country, farmers anticipate planting 6.6 per cent fewer acres of canola in 2019 than the previous year.

"If seeding intentions are realized, this would represent the lowest seeded area of canola since 2016 and 1.6 per cent lower than the five-year average of 21.7 million acres," the report said.

Stockbrugger said he doesn't agree with Stats Canada's assessment.

"As we're harvesting 2018, we're planning how much canola we're growing in 2019. So I personally don't expect to see a huge swing in terms of acres."

Moe: 'We're running out of time'

Stockbrugger said he supports Premier Scott Moe's calls for the federal government to increase cash advances for farmers.

Moe is pressuring the federal government to enact proposed changes that would make it easier for canola farmers affected by Canada's trade dispute with China to get cash advances.

The proposed changes include an increase to the ceiling for the Advance Payments Program to $1 million per account, with the full amount being interest-free. A deadline extension to April 30 was also proposed for the spring intake.

"We need to have diplomats, have scientific officials on the ground in China engaging with the Chinese on the importance of our products, our good clean canola products coming into that market," Moe said.

In a letter dated Tuesday, Moe said he had initially been impressed that the federal government "seemed prepared to act quickly" on the issue. But, Moe said, now he is concerned the feds have "offered no concrete support" for canola producers.