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MAY 2008, Volume
23 Issue 5
What's
Happening in Saskatchewan
Wheat farmers celebrate
"heady days" for prices
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Wheat is hitting record high prices this year.
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According to Statistics Canada, a surge in grain and oilseed prices drove cash receipts to an all-time high in 2007, and the surge has continued into this year. Wheat was $4 a bushel a year ago. As of March, it was averaging $14 a bushel, with spot prices shooting as high as $22 a bushel.
Last year, Canadian farmers received a record $36.3 billion from the sale of crops and livestock, up 12.2 per cent from 2006. Total farm cash receipts, which include crop and livestock revenues plus program payments of $4.1 billion, reached a record $40.4 billion, 9.5 per cent more than in 2006.
It was the first time receipts surpassed the $40 billion mark, the agency said.
The Canadian Wheat Board is forecasting a second record for Prairie wheat growers in the coming crop year, despite predictions that global wheat production will hit an all-time high in 2008.
In its forecast of new-crop prices, the wheat board projects that top-grade hard red spring wheat would fetch an unprecedented $482 a tonne as of May, about 85 per cent higher than it forecast a year ago.
Ken Ritter, the wheat board's chairman, said that grain farmers are filled with hope and confidence these days. "These are heady days," Ritter told the annual GrainWorld market outlook conference in Winnipeg.
Kelly Davey, a wheat board market analyst, told the Winnipeg conference that global wheat production should hit a record 630.8 million tonnes in the coming year - 36.9 million tonnes more than last year.
Davey said increased demand from high-powered Asian economies, along with crop failures in some key grain growing areas, have led to the tight wheat supplies.
"Ethanol did not cause the problem," she told the crowd of farmers, brokers and grain company officials at the Fairmont Hotel, referring to the demand for so-called fuel crops that have caused some farmers to switch away from wheat. "But it added fuel to the fire and brought it on quicker."
Home sales on
faster track
Winter did not stop the housing boom in Saskatoon and Regina.
"Both Saskatoon and Regina are seeing the strongest demand for new housing in decades," said Paul Caton, senior market analyst for Canada Mortgage and Housing Corporation in Saskatchewan.
"Coupled with persistent labour shortages, this will continue to put strong upward pressure on prices, leading to higher mortgage carrying costs," Caton said.
Saskatoon single-detached housing starts reached 89 units in February, the strongest February single starts seen since 1978. Housing starts during the first two months of 2008 in Saskatchewan were 156 units, the highest year-to-date single starts since 1987.
Saskatoon monthly multi-family starts easily out-paced those seen in February 2007 with 86 starts compared with only 17 last year. The 220 units started in the first two months of 2008 was the highest number of multi-starts seen by the end of February since 1983.
Saskatoon total housing starts were 376 units, almost 69 per cent increase over the 2007 figure.
Regina total housing starts in February were almost 57 per cent higher than in February 2007. Single-detached starts were up more than 52 per cent over the February 2007 figure, the strongest February in 30 years.
In Regina, 16 semi-detached and row housing units starts were recorded in February, a 78 per cent increase over February 2007. Most starts are condominium apartments and townhomes.
Saskatoon, meanwhile, is seeing sharp price increases for resale homes. The average selling price in February hit a new high of $264,269 for the 367 houses sold within the city limits. This is 41 per cent above the average selling price of a year ago, according to the Saskatoon Region Association of Realtors.
"Saskatchewan is the new Alberta - holding the top spot nationwide on growth across all key housing indicators including housing starts, house prices, residential building permits and resale activity," said Derek Holt, assistant chief economist at RBC Economics. "We still expect the province's housing market to stabilize sometime in 2008 as price gains come off their peaks and mortgage rates dip further."
Iconic Pool name
officially changed
The Saskatchewan Wheat Pool, a name once emblazoned on silos across the province, has officially been changed to Viterra Inc.
On March 12, shareholders approved an amendment to the Articles of the Company to change the corporate name from "Saskatchewan Wheat Pool Inc." to "Viterra Inc." Industry Canada authorized the name change immediately.
The company has been operating under the business banner "Viterra" since it launched its new brand on August 30, 2007. The ticker symbol on the Toronto Stock Exchange will remain "VT."
Land value
records smashed
A record-breaking 2007 for sales of Crown petroleum and natural gas rights in Saskatchewan has now been followed by the best single land sale and the best fiscal year in province's history.
The February sale of Crown petroleum and natural gas rights raised $197 million in revenue for the province, more than doubling the old record of $85 million set in 1994.
That brought the total for the 2007-2008 fiscal year to $419 million, eclipsing the previous record of $202 million set in 1994-95.
The recent sale included 16 exploration licences that sold for $120.5 million and 308 lease parcels that brought in $76.7 million.
Another record shattered was the average price paid on a per-hectare basis at $2,495, beating the old mark of $1,515 set last fall. This is, as a comparison, from three to four times the price of farmland in the province.
On the strength of the hot Bakken oil play, the Weyburn-Estevan area dominated the sales activity, bringing in $132 million. Sales in the Swift Current area generated $47 million, largely on the strength of the new Shaunavon oil play. The Kindersley-Kerrobert area was next at $16 million, followed by the Lloydminster area at $2 million.
Saskatoon Assets Inc. paid the highest price for a single parcel of $30.7 million. The 2,900-hectare exploration license is in the Shaunavon area.
The highest price paid on a per-hectare basis was $15,255. Saskatoon Assets picked up this lease parcel of deeper rights, located in the midst of the Bakken play at Stoughton, for just under $2 million.
- Compiled by Joe Ralko
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