The impact of unseeded acres and flooded-out crops in several parts of the Prairies hasn’t weighed much heavier on farmers’ loans, Farm Credit Canada reports.
Despite the delayed harvest and lower production, the federal farm financing agency said Tuesday, the number of Nov. 1 loan payments recorded as past due in Alberta, Saskatchewan and Manitoba is “similar to slightly lower” than in previous years.
“We know that late harvest and weather caused delivery issues for some grain and oilseed producers, and this timing may be a contributing factor to late payments,” FCC’s Prairie vice-president Derwin Arnstead said in a release.
“A large percentage of our Prairie customers make semi-annual loan payments in November and December, so this is one indicator of how this year impacted farmers.”
FCC said its staff met with a number of customers earlier this year in Saskatchewan, Manitoba and parts of Alberta to talk over their individual situations in view of moisture problems, and look at measures such as deferral of payments.
“To date, the proportion of customers requesting adjustments is similar to previous years when they experienced challenges due to weather,” FCC said Tuesday.
Production in the Prairies is expected to be lower this year due to the reduced number of acres seeded and additional acres lost due to flooding. However, FCC noted, favourable weather in October helped fields to dry out for harvest to be largely completed before freeze-up.
FCC cited StatsCan data predicting wheat and canola production in Canada will be 14.6 and 4.6 per cent lower respectively in the 2010-11 crop year as compared to 2009-10.
Provincial specialists have reported average to above-average yields for those crops that were harvested, at below-average quality in most areas of the Prairies except in southern Alberta and the Peace region.
The full extent of the impact of this summer’s moisture issues on crop quality is not yet known, FCC said.
Looking further ahead, the Crown lender said, broader economic trends continue to favour agriculture.
“Inflationary pressures are subdued here in Canada,” senior agriculture economist Jean-Philippe Gervais said in the release. “Although central banks in emerging countries are considering actions to ease inflationary pressures in their economies, world demand for commodities is still supported by positive economic growth prospects abroad.”
Out of FCC’s $5.1 billion grain and oilseeds portfolio at the end of October, about $2.9 billion is on the Prairies and $1.6 billion of that is in Saskatchewan.