Viterra optimism
Viterra has released its own update of seeded acreage in Western Canada, along with how the reduction in acres may affect the financial results of the company. Viterra estimates that eight million acres went unseeded and another two million acres have been lost to excess rains. This is a bit less than the estimates coming from provincial governments. Saskatchewan alone is estimating eight million unseeded acres and four more million flooded. Viterra says it expects industry sales to decline by 15 to 17 per cent in fiscal 2010 with the largest declines in fertilizer and chemical sales. The impact will be felt in Viterra’s third quarter. The company says if harvest goes well and farmers are able to do post-harvest work there may be some catch up in fertilizer and chemical sales. Prairie production of the six major grains averages 49 to 50 million tonnes a year. Viterra is estimating this year’s production at 42 to 44 million tonnes. The company is hoping that on-farm carryover stocks, coupled with yield potential on acres unaffected by the weather could somewhat offset the impact of unseeded acreage. Personally, I think Viterra is being a bit too optimistic, but the company will benefit from operating across Western Canada and in South Australia, where conditions look good. Some of the companies that operate regionally will experience a lot more financial pain. I’m Kevin Hursh.