Source: Alberta Agriculture and Forestry
Australian exports contribute to recent weakness in Canadian wheat and canola markets.
La Nina is the term for the cooling of ocean temperatures in the central and east-central Pacific Ocean near the equator. The temperature of ocean water is a factor that can affect world weather. The cooling of the ocean temperatures in the tropical zone is caused by unusually strong, east-moving trade winds and ocean currents that cause upwelling, bringing cold water to the ocean surface. A La Nina event usually lasts from 9 to 12 months. La Nina is in an unusual third consecutive year, although it is forecast to diminish in 2023.
The colder than average tropical ocean waters during La Nina, together with stronger trade winds, push warm water toward Asia and Australia and cause cold water to surface off the coast of the Americas. These cold waters tend to cause dryness in the southwestern U.S., increased rainfall in northern Brazil and dryness in southern Brazil and Argentina. In contrast, the warmer than average water near Asia and Australia tends to cause above average rainfall for Indo-Pacific countries, including eastern and northern Australia.
“These typical La Nina effects correlate well to drought in the western U.S. and Argentina in recent years, and flooding rains in Pakistan and eastern Australia,” says Neil Blue, provincial crops market analyst with the Alberta government. “The 2022 season in eastern Australia was unusually wet, creating difficulty with seeding and then with harvest. Despite the challenges of wet conditions, Australian field crops achieved record production.”
Figure 1. Australia Wheat and Canola Production
For the high value wheat and canola crops, 2022 was the third consecutive year of record production, correlating to the third consecutive year of La Nina. Australia is expecting a reduction of crop yields in 2023 as La Nina wanes and rainfall returns to average levels.
“Meanwhile, the higher production from Australia of both wheat and canola is a source of competition to Canadian crops in the world market,” explains Blue.
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