Canadian Farmers Drought*

Canadian farmers despair in Prairie drought

August 2, 2002 Posted: 5:04 PM EDT (2104 GMT)

WINNIPEG, Manitoba (Reuters) -- Sweltering under soaring temperatures and pestered by swarms of grasshoppers, many farmers on Canada's Prairies are conceding defeat as acres of anxiety rather than fields of grain thrive on their parched land.

"It has to be kind of stressful because these are good farmers. They know how to grow grain," said Rob McGregor, president of the Saskatchewan Canola Growers Association.

"But for all their best efforts, if it doesn't rain it doesn't happen," said McGregor.

Instead of the lush pastures and crops that turn the Canadian plains into a verdant patchwork, vast areas of north and central Saskatchewan as well as eastern and central Alberta are dry and dusty, unable to sustain farmers or their livestock.

"I have no clue what to feed over winter. There just isn't any hay locally available," said Roy Eckert, a cattle farmer in New Sarepta, southeast of Edmonton, Alberta.

"The fields that I traditionally pasture are grazed off. There is no more grass," said Eckert.

A wide swathe of Alberta hasn't been this dry in 133 years. Crop insurance claims have soared. And officials say the province's cattle herd may drop by 30 percent or 500,000 head.

The situation is also dire in neighboring Saskatchewan,

the province that annually produces half of Canada's spring wheat and the bulk of its canola, a variant of rapeseed and a rich export earner.

Provincial authorities say that up to a third of Saskatchewan's land is in a no-yield to low-yield state.

Dozens of municipalities have declared a drought disaster since it became clear that crops wouldn't survive, either when fields failed to germinate or struggled to survive in bone-dry soil.

"The annual crops are not looking great at all. I think reality is beginning to set in in terms of the extent of the harvest we're going to have," said Lloyd Andruchow, Alberta's drought monitoring specialist.

Cattle auctions jumped three to five times normal levels in June, as farmers, some of them in tears, sold herds early due to poor pasture land and as feed scarcity sent prices soaring.

Tales in the farm community talk of producers traveling hundreds of kilometers, knocking on doors in search of hay. There are even stories of farmers stealing big bales.

"It just shows you that there's weird things going on," said Glenn Barclay, an agronomist in Biggar, Saskatchewan.

In an outpouring of support, farmers from Eastern Canada, have donated 800 tons of hay for their Prairie brethren in a campaign dubbed HayWest.

The hay, which started heading west by rail on Friday, is far from enough to support struggling cattle herds. Farmers in Alberta and Saskatchewan are taking part in a draw to get the much needed feed.

The drought is pinching the entire agricultural sector, from stores that sell farm equipment to rail companies and corporate grain giants heavily dependent on handling volumes.

Statistics Canada forecast a drop in 2002 farm income of nearly 40 percent due to drought, along with lower red meat prices and less farm-aid money.

Politicians have responded to cries for help. In June, Ottawa pledged C$1.2 billion ($755 million) toward drought relief, and Alberta and Saskatchewan recently announced aid packages of C$324 million and C$70 million respectively.

Saskatchewan Wheat Pool , Canada's largest publicly traded agribusiness co-operative, said this week that Prairie crop production could shrivel by 33 percent.

Canada sells the most canola overseas and markets 20 percent of world wheat exports.

"We're not going to have enough wheat to satisfy all the demands of our customers, but given the fact we're very low on supplies, we'll try to target the high-price markets with what we have," Fred Oleson, Agriculture and Agri-Food Canada's (AAFC) chief of market analysis, told Reuters.

In its latest crop outlook, AAFC forecasts total agricultural exports to fall to modern-day lows.

Wheat exports are expected to total 12.3 million tonnes, down 20 percent from the previous year. Canola trade could shrink to 2.1 million tonnes, said AAFC, on estimates of a crop of 3.9 million tonnes.

The canola crop could even fall as low as 3 million tonnes to 3.6 million tonnes, according to market analysis firm Statcom and as reflected in recent contract highs in the Winnipeg futures market.

"The risk this year will be the competition between the Japanese market and our domestic crushers for the available supply," said Oleson.

($1-$1.59 Canadian)

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