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Climate Change

Major Drop in 2021 Canadian Field Crop Production

Less production means more pressure on grocery prices

In Canada, October 11th was Thanksgiving, traditionally a celebration of the harvest. This year, that harvest is experiencing significant stress putting continued upward pressure on food prices.

Ongoing widespread drought conditions combined with a summer ‘heat dome’ in Western Canada have slashed projected harvests.

According to Statistics Canada:

An assessment of Normalized Difference Vegetation Index (NDVI) curves, which are a measure of plant health, indicated that in almost all parts of the Prairies, crops reached peak health well ahead of normal. In some instances, peak NDVI occurred up to four weeks earlier, before decreasing rapidly as a lack of moisture and high temperatures took a toll on plant health.

This is the first time since 1987, when Statistics Canada began monitoring crop conditions using coarse resolution satellite images, that NDVI curves have peaked so early in the growing season. The CCAP also indicates that dry conditions have impacted almost all of Western Canada. By comparison, other notable droughts such as in 2002—while difficult for many—were less widespread than this year’s.

These conditions are leading to double-digit declines in principal field crop production. Nationally, wheat production is projected to decrease 34.8% year over year to 22.9 million tonnes in 2021. Similarly, canola production is expected to fall 24.3% to 14.7 million tonnes.

The chart below illustrates year over year production declines for all principal field crops in Canada. Given widespread production declines, it seems reasonable to argue that food prices will continue to experience upward pressure.

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