What’s a good price for canola?

A producer told me recently that, “My banker just marketed some of my canola.” In other words, the producer sold some canola for cash flow needs. He had been holding out for higher prices, but that hasn’t materialized. A lot of producers are disappointed with canola prices which have been sitting somewhere around the $8.50 a bushel range. The futures market is around $380 a tonne. Prices are certainly a disappointment compared to some of the big prices in the previous couple of years, but it you take recent history out of the equation, canola is trading near the top of its historical range. Sure, if you indexed canola for inflation, it should be worth a great deal more. However, producers should also consider how much more canola they grow per acre than 10 or 20 years ago. And they may want to consider how many acres they seed to canola versus 10 or 20 years ago. Every canola producer would like to see a higher price, but $8.50 is profitable, especially considering the good yields enjoyed in most areas last year. And the canola price is a lot more palatable that most other crops. I’m Kevin Hursh.

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