Insights & Analysis

September 28, 2022

Alberta’s farmers can breathe a sigh of relief as crop estimates for 2022 look good

Coming into this year, Canadian farmers were facing one of the most stressful and uncertain years in recent memory. Farming is a challenging profession at the best of times, and the stakes were as high as they’ve ever been this spring.

Why?

Well, there are two significant headwinds facing farmers.

First, last year’s crop was not a good one. A severe drought drove average yields down between 35% and 50% for most major crops. Farmers were not in a position to withstand another bad year.

Second, the cost of fertilizer has soared in the past 20 months due to high natural gas prices, supply chain disruptions, sanctions against Russian companies, and Russia itself limiting exports of fertilizer—as the world’s largest exporter of fertilizer, Russia has a huge impact on global markets. As a critical input in crop production, high fertilizer prices mean increased costs for farmers.

2022 has become a high-stakes year for farmers in AB and Canada after last years poor crop. In this piece, @BizCouncilAB examines how the 2022 #harvest season is shaping up & what we can expect from Alberta's 3 largest food crops. Click To Share

At the same time, farmers are in a position to benefit from record-high food prices. Poor crop years in India and China, combined with Russia’s invasion of Ukraine have created food shortages and caused global food prices to soar. According to the Bank of Canada’s commodity price index, prices for agricultural goods are, on average, about 75% higher than they were two years ago.

All this has made 2022 a high-stakes year for farmers in Alberta and across Canada. This year’s crop was the most expensive to plant in history. But, if commodity prices remain high and the harvest is good, farmers might come out ahead.

In mid-September, Statistics Canada published its yield and production estimates for 2022. In this Quick Read, we examine how things are shaping up as we head into the harvest season. Are farmers headed for disaster? Or will strong yields and high prices help offset huge upfront costs?

The 2022 outlook for Alberta’s major crops

Data on crop production is difficult to aggregate because yields and product density/volume vary significantly from one crop to the next. Growing and harvesting a tonne of wheat, for example, is very different from growing and harvesting a tonne of cilantro.

With that in mind, we focus our analysis on Alberta’s largest food crops by acreage sown: wheat, canola, and barley.

In general, all three major crops are looking at a strong rebound from last year’s poor harvest. Both yields and total production are up significantly, and Alberta farmers are looking at their best harvests in at least five years.  

Wheat

Of all Alberta’s major crops, wheat stands out as the top performer. Yields are estimated to be about 3,860 kg/ha in 2022, which is close to the province’s all-time high of 3,900 kg/ha set in 2013 and again in 2016. Strong yields, combined with an increase in acreage sown, means that Alberta is looking at a record wheat harvest this year—in the range of 11.6 million tonnes, beating the previous record harvest of 11.3 million tonnes in 2013. That 11.6m tonne harvest is an 80% improvement over last year.  

Canola

The canola harvest is also looking good this year, although not quite as strong as wheat.

Canola yields are estimated to be about 2,338 kg/ha. That’s the best we’ve seen since 2017, but about 7% below the all-time high of 2,900 kg/ha in 2016. The amount of land devoted to growing canola is down slightly from last year, and about 6% below its peak. As a result, Alberta is looking at a 6.1m tonne canola harvest in 2022. That’s the best in five years and about 40% higher than last year. However, it’s still about 11% below record levels.   

Barley

Barley yields have also rebounded strongly. At 3,847 kg/ha, yields are 50% higher than they were last year. However, they remain slightly below 2019 levels and about 6% below the 2016 peak.

Total production, however, will be well below record levels. Alberta is set to harvest 4.8 million tonnes of barley in 2022—a 35% increase over last year but notably lower than levels seen in the early 2000s. The reason for this is that the total acreage devoted to barley production in Alberta over the years has been in steady decline as farmers diversify their crop rotations, shifting into products like flax and lentils.

Conclusion

Early on, 2022 was shaping up to be a high-risk, high-reward year for Alberta farmers. This year’s crop was the most expensive in the province’s history, and farmers were crossing their fingers for a solid harvest in order to benefit from high prices and pay off those steep up-front costs. Luckily, weather conditions delivered, and farmers are poised to make a strong contribution to Alberta’s economic recovery in 2022.



Mike Holden, VP of Policy & Chief Economist

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