2020 6th Annual Farms.com Risk Management
Ontario Planting Intentions Survey Results
Congratulations to the Winners of the Random Draw Prizes!
As our way of saying thank you for completing the Farms.com Risk Management Planting Intentions Survey, three survey participants were chosen at random to win cash prizes.
Congratulations to the following cash prize winners!
- $300 - Eric L, Prescott & Russell
- $200 - Tony D, Lambton
- $100 - Ted H, Niagara
A Farms.com Risk Management 2020 Ontario farmer survey conducted from January 15th – March 21st, 2020, is forecasting that Ontario (ON) farmers intend to plant a RECORD amount of corn acres in 2020, which is up +8.07% year-on-year (Y/Y) and well above the 5-year average. The previous record of 2,225,000 acres was in 2012 and 2013. “Not a big surprise after last year’s very wet spring planting season where a lot of corn acres never got planted, particularly in the very southern regions of ON like Essex and Haldimand counties”, said Chief Commodity Strategist Moe Agostino. Farmers intend to plant 2% fewer soybean acres year-on-year but the 2020 ON soybean acreage is still above 3 million acres and above the 5-year average. 2020 total ON all wheat acreage is down by 10% vs. last year to a 4-year low and below 1 million acres.
In 2020, Ontario farmers are expected to plant 8.07% more corn acres Y/Y, or up by +177,646 acres, to a new record of 2,380,146 acres, with most of the increase coming from Southern Ontario. 2020 ON soybean acreage will be down by 55,665 acres Y/Y, with most of the decline coming from Southern Ontario. IP soybean acres will be up by 1.00% Y/Y and at 821,379 acres, represents 26.85% of total soybean acres. 2020 ON all wheat acreage is estimated to be lower by 113,534 acres Y/Y, or -8.56% Y/Y, at 918,724 acres, which is below the 5-year average. The biggest increase in all wheat acreage comes from Southern Ontario but that’s being offset by a drop-in wheat acreage elsewhere in the province. Total ON SRW wheat acreage comes in at 79.25% of all wheat, or 780,950 acres.
A lower Canadian dollar (CDN $) continues to provide a bonus to Ontario farmers for the 5th consecutive year. A plunge in crude oil prices, a soaring U.S. $ Index (due to investors/countries buying the U.S. reserve currency as a flight to safety during COVID-19 crisis) and a weak Canadian economy (most likely in a recession with record low interest rates) are all headwinds for the Loonie. But being at a 5-year low at $0.68, it most likely has 80-90% of all the negative news baked in.
Moe Agostino, Chief Commodity Strategist at Farms.com Risk Management, says, “grading issues in 2019 (lots of #3 and #4 corn, the farther east one travelled) were outweighing yields. The late wet planting season transitioned to a dry growing season for some regions in the province. So, farmers are hoping for a more normal year in 2020.” Steve Denys, Director of Business Management for Maizex Seeds, says, “that he is not surprised by the results but thinks that the total soybean acreage may be higher by the the time all 2020 ON planting is complete. This will highly be dependant on weather and fears over ethanol plants shutting down. A drop in corn-for-ethanol usage over poor margins is a major concern.” He goes on to say that, “we could see a switch to more soybean acres but the intital thought before COVID-19 was to plant more corn acres in 2020, due to better yields and price potential vs. soybeans.”
There are no known ethanol shutdowns in Ontario yet but with ethanol futures trading below $1.00/gallon (a new record low), ethanol margins have been squeezed. According to Moe Agostino, “there are 36 U.S. ethanol plants that are idle or shutdown in the U.S. thus far which has resulted in a total demand destruction of over 2.9 billion gallons of ethanol or 300 – 500 million corn bushel loss in usage. When gasoline prices are trading below ethanol prices, thanks to the massive plunge in crude oil prices from a double crisis (Russian/Saudi price war and demand destruction from COVID-19), there is no incentive to blend beyond the U.S. blend wall and mandate.“
The acreage estimates in this report are based primarily on surveys conducted during the months of January - March 2020. The 2020 Farms.com Risk Management Planting Intentions Survey is a probability survey that includes a sample of farmers from across Ontario. This survey used to make acreage estimates is subject to sampling and non-sampling errors that are common to all surveys. Sampling errors represent the variability between estimates that would result if many different samples were surveyed at the same time. Sampling errors for major crops are generally between 1.0 – 3.0% but they cannot be applied directly to the acreage published in this report to determine confidence intervals because the official estimates represent a composite of information from more than a single source.