What was the effect of the 2021 drought on farmers and the cost of goods?

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This week, I think it's important to discuss the severity of the Western Canadian drought on farmers.

The situation due to this spring's drought in Western Canada is severe. Most of the producers in the grain section have had very little production, maybe a quarter to half at the most. Some of those producers have grain contracts that they can’t fill in and they have to come up with the cash difference. That is going to be a major drain on their resources .

For the cattle side, it's equally bad. The grass isn’t there. They will have to pull the cattle off earlier than normal and as far as production goes; it will be maybe 20 to 40% of what they got the year before. As such, the feed is really tight. The result of the drought means that the price of hay is north of $200/tonne. Where normally it’s maybe $60 - $80/tonne.

Cereal and oilseed crops are way up, but if you get no production you can’t benefit from higher prices.

The governments are coming up with some safety nets. We are not clear about what that all is going to cover, but I believe they are trying their best. I am not sure if the safety nets are working the way that they should be working but the fact is that some funding coming to producers is probably too little too late. I’ll talk about that in another post.

Here is the link to the AgriRecovery programs: AgriRecovery | Agriculture Financial Services Corporation (afsc.ca)

The full details are being finalized so the application process hasn’t begun yet, but we wanted to make sure you had the link.

I look forward to next week when I'll be talking about What the Government Needs to do about Relief for Farmers.

Fred Mertz
Fred@thevoiceofagriculture.ca