Analysts disagree if canola prices will fall if Strait of Hormuz opens
Canola’s strong ties to crude oil is a cause for concern says analyst Bruce Burnett.
Nearby canola futures have rallied due in large part to surging crude prices. Some countries are also increasing biofuel blending to help combat rising oil prices caused by conflict in the Middle East.
Burnett said farmers should be aware that canola prices could fall if oil tankers are able to move freely again through the Strait of Hormuz.
However, analyst Errol Anderson disagreed with Burnett’s approach. He said he doesn’t think crude prices will fall back to where they were pre-war, and the effect on canola could be even more muted. If anything, he was bullish on demand for grain and oilseeds given he believes farmers will cut back on nitrogen fertilizer, which will reduce yields.
Whatever the case, Burnett said farmers should have time to weigh their options as oil has a lengthy supply chain and there aren’t empty tankers floating near the Strait of Hormuz.
May canola futures fell on news of a ceasefire between Iran, Israel and the U.S. but were trending upward again on Thursday as events in the Middle East continued to evolve.
Drones seen as business opportunity for farm youth
Embracing drone technology could be a way for young people to stay connected to the farm.
Steve Li is a professor and drone researcher with Auburn University in Alabama. He spoke at a recent conference with the Canadian Agricultural Drone Association.
Li said he’s seen young people start drone businesses with less than 150,000 dollars. They’ve seen a quick return on investment, paying off debt and equipment and becoming profitable after one season.
Brothers Todd and Brayden Fraser attended the conference. They hoped to get a better understanding of how to use drones on their farm and for business ventures. They noted that spray drones carry a less daunting price point than an airplane, and they could save money if they do the spraying themselves.
Tyler Hatton left an 18-year career as a salesman with John Deere to jump into the drone industry. He also noted the price differential between drones and traditional sprayers and called them a way for kids to get into agriculture and make money.
Canadian regulators are still in the process of ironing out rules around drone spraying. Earlier this year, Health Canada proposed allowing chemicals approved for aerial application to be used in drones, however that hasn’t been finalized.
Deere settles U.S. right-to-repair lawsuit
Deere has agreed to a settlement in a U.S. class action suit over farmers’ right to repair equipment.
The machinery manufacturer agreed to pay 99 million dollars US, or nearly 138 million Canadian dollars
into a fund for farmers involved in the suit. Deere also agreed to make digital tools available to farmers so they are able to maintain and repair equipment.
The company said the settlement addresses complaints in the suit without a finding of wrongdoing.
The case is part of broader scrutiny over right-to-repair practices. Regulators and plaintiffs argue that some manufacturers limit competition by controlling access to repair tools and software.
Deere faces a separate lawsuit from the U.S. Federal Trade Commission. It accuses the company of forcing farmers to use its authorized dealer network thereby driving up costs for parts and repairs. Deere has denied the wrongdoing.
