Agricultural Outlook 2019

Agricultural Outlook 2019 1

WHAT IS DRIVING AGRICULTURAL MARKETS - 2019 2

Commodity Markets 3

Dow Industrials End of 10 Year Cycle 4

US Manufacturing PMI PMI - Purchasing Managers Index 5

Canadian Inflation Rate 6

TSX Composite 7

Canadian PMI 8

Debt To Disposable Income Yikes!!!! 9

Canadian Dollar Where Oil Goes - Sooo Does Our Dollar $ We do see the CDN Dollar Rising to 78 80 cents as Oil Recovers to $70/barrel (WTI) 10

China - PMI 12

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WTI 14

TRADE WAR 20

U.S. Soybean Exports 21

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Chapter One Factors Effecting Agriculture 33

775 675 575 475 Where You Are Depends On Where Over Production US Subsidies You Been Canola Price by Month Increasing demand China Tight Global Stock Diminishing Demand Large Global Stock 375 275 175 Aug-98 May-99 Feb-00 Nov-00 Aug-01 May-02 Feb-03 Nov-03 Aug-04 May-05 Feb-06 Nov-06 Aug-07 May-08 Feb-09 Nov-09 Aug-10 May-11 Feb-12 Nov-12 Aug-13 May-14 Feb-15 Nov-15 Aug-16 May-17 Source Stats Canada 34

Farm Financial Analysis 775 675 575 475 375 275 175 Aug-98 Jun-99 Poor working Capital Poor Debt to worth Consolidations Must Be Efficient! Apr-00 Feb-01 Dec-01 Oct-02 Aug-03 Jun-04 Apr-05 Canola Price by Month Feb-06 Dec-06 Oct-07 Very Good Working Capital Very Good Debt to Worth Purchases Increasing Working Capital Aug-08 Jun-09 Apr-10 Feb-11 Dec-11 Oct-12 Aug-13 Jun-14 Apr-15 Feb-16 Diminishing Ratios Working Capital Problems Dec-16 Source Stats Canada 35

US Wheat Prices 1960 2019 $9.00 $8.00 $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $0.00 36

Value of farm Capital 120,000,000 100,000,000 80,000,000 60,000,000 40,000,000 20,000,000 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source Stats Canada 37

Saskatchewan Land Values 30.00% 28.50% 25.00% 20.00% 22.90% 19.70% 18.70% 15.00% 10.00% 5.00% 14.90% 6.90% 5.70% 9.40% 10.20% 7.50% 6.40% 4.80% 2.10% 2.00% 0.00% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 40

70% of Your Balance Sheet - Will Land Values remain high? Positive Granny Landlords Rapidly Expansion of Existing farmers Grain/Cattle Industry Profitability Interest Rates Accessibility of Credit - FCC Negative Falling Farm Income Number One reason for Land values Increase & Decrease Trade Disputes Land Values 41

Current Ratio 6 = Total Current Farm Assets/Total Current Farm Liabilities 5 4 3 2 4.216 3.505 3.575 3.234 3.353 2.304 2.36 2.202 4.962 4.545 3.999 3.994 3.774 4.089 3.963 3.692 3.917 3.505 3.385 2.87 1 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source Stats Canada 44

Cuurent Ratios Current : Ability to Pay Obligations Current Ratio = Total Current Assets ( ) Total Current Liabilities Less than 1.00 Red Light 1.00 to 1.50 Yellow Light Above 1.50 Green Light 45

Liquidity Ratios Working Capital = Current Assets (-) Current Liabilities Size Matters Eg $1, 295,000 - $725,500 = $569,500 Divided by Acres $569,500 / 2,500 acres = $227.80 Very Good $569,500 / 7,500 acres = $75.93 - Poor 46

Debt/Equity 25.00% 20.00% 15.00% Debt-to-equity (DE)= Total liabilities / (Total Assets- Total Liabilities) 20.88% 21.39% 21.03% 18.31% 18.74% 20.29% 18.57% 18.56% 18.96% 16.79% 17.64% 18.06% 17.84% 15.49% 17.29% 13.91% 15.71% 15.13% 15.09% 14.70% 10.00% 5.00% 0.00% 1998 1999 2000 2001 20022003200420052006200720082009 2010 2011 2012 2013 2014 2015 2016 2017 47

Solvency Ratios Debt to Equity Ratio = Total Liabilities ( ) Total Equity represents level of debt Rule of Thumb: Above 66% - Red Light 42% to % - Yellow Light Less than 42% - Green Light 48

Return on Assets 0.12 0.1 0.08 0.102 0.09 0.06 0.04 0.02 0.029 0.038 0.036 0.024 0.018 0.037 0.041 0.04 0.016 0.033 0.062 0.057 0.048 0.029 0.031 0.053 0.047 0.042 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source Stats Canada 49

Farm Income & Expense 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0-2,000,000 Cash receipts, total Net cash income Operating expenses after rebates Net income, total Source Stats Canada 50

Source USDA 51

Ability to Repay Debt Long Term Projected Year Ending Actual for Year Ending Actual for Year Ending Actual for Year Ending Actual for Year Ending Actual for Year Ending 31-Dec-19 2018 2017 2016 2015 2014 5 year Ave Total Farm Cash Income $332.79 $340.34 $267.78 $340.86 $340.84 $320.50 $322.06 Total Farm Cash Expenses $255.10 $257.32 $271.99 $263.31 $263.71 $253.06 $261.88 NET FARM CASH INCOME $77.69 $83.02 -$4.20 $77.55 $77.13 $67.44 $60.19 Living $13.63 $13.63 Plus Interest $13.91 $9.21 Plus: Off Farm Income $10.22 $10.22 Cash Income Before Debt $88.20 $65.99 Debt Payment 57.78 57.78 Residual $30.42 $8.21 DSR 1.53:1 1.14:1 52

3000 Acre Grain Farm % Deviation in Income Plus 10% Plus 15% Plus 20% Less 10% Less 15% Less 20% Less 25% Total Income $110.89 $121.98 $127.52 $133.07 $99.80 $94.26 $88.71 $83.17 Farm Cash Rent $18.75 $18.75 $18.75 $18.75 $18.75 $18.75 $18.75 $18.75 Family Living $16.67 $16.67 $16.67 $16.67 $16.67 $16.67 $16.67 $16.67 Principal & Interest $75.00 $75.00 $75.00 $75.00 $75.00 $75.00 $75.00 $75.00 Off - Farm Income $16.67 $16.67 $16.67 $16.67 $16.67 $16.67 $16.67 $16.67 Residual for Growth $17.14 $28.23 $33.77 $39.32 $6.05 $0.51 -$5.04 -$10.58 $51,420 $84,687 $101,320 $117,954 $18,153 $1,519 -$15,114 -$31,747 53

Keys to Farm Survival in a Downturn Must Have a Strong Equity Position - because they will not get the profits Must have: Marketing Management Expertise Financial Management Adaptable to Change Low Machinery Cost Low Overhead Cost & Low Family Living Low Debt Load 54

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USMCA 56

USMCA Review clause: The USMCA includes a 16-year expiration date Provision that requires a review of the deal every six years, when it can be extended. Dispute settlement: NAFTA's disputesettlement system, will remain the same, a key win for the Canadians. The investor-state dispute-settlement system, will be phased out for the US and Canada 58

Grains Outlook 80

700 Total Wheat and Coarse Grains: Supply and Demand 600 500 400 300 200 100 0 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 81

Wheat 82

US Wheat Associates 83

Global Wheat Production (MMT) 780.00 760.00 740.00 720.00 700.00 680.00 660.00 640.00 620.00 600.00 580.00 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Production (million metric tons) Domestic disappearance (million metric tons) 85

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US Wheat Associates 87

70.0 31.8 51.3 137.6 25.0 15.0 25.5 132.5 99.7 19.5 17.0 https://www.uswheat.org/market-and-crop-information/supply-and-demand/ 88

US Wheat Associates 89

US Wheat Associates 90

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The Rise of Russian Wheat Production 93

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Russian Wheat Production 90 85 80 70 60 59.8 61.04 72.53 70 50 40 30 20 10 0 2014/15 2015/16 2016/17 2017/18 2018/19 96

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Russian Wheat Exports 36.5 Million Tons 98

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Russian Wheat Production In 80s the USSR was the largest grain and wheat importer (Soviet Russia was the largest consumer but it s hard to separate its imports from other member of the Union). In 1985 the country imported 46 mmt of grain including 21 mmt of wheat In 2017, the country has harvested 85.8 mmt of wheat, which is a new all-time record. 103

Russian Wheat Production The collapse of the Soviet Union Farmers became entrepreneurs The freedom to: Produce what they want To sell it to any buyer at any price Land Reforms Long Term Lease & Land Ownership With Freedom, Russian Farmers have invested in Agri-Technologies 104

Russian Wheat Production Foreign trade liberalisation Farmers have received the access to huge world market Global Warming In Russia where annual temperatures are increasing faster than average world ones it led to milder winters and expansion of area under higher yielding winter wheat. Since 2016 Russia is sowing more winter wheat than spring wheat. 20 years ago the spring wheat acreage was exceeding winter wheat one by 80-100 percent 105

Russian Wheat Production Rapid devaluation of ruble in 2014 We believe that medium term we see a lot of investments coming into grain exports infrastructure. In 2017 & 2018 terminal owners are likely to make a fortune - will definitely encourage investors to pour more money into the sector 106

US Wheat Associates 107

US Wheat Associates 108

US Dark Northern Spring US $/Bus (Minneapolis ) 12.00 10.00 10.75 9.71 9.48 8.00 6.00 4.00 3.40 5.37 3.45 4.45 4.63 4.19 3.53 4.13 7.95 5.84 8.13 8.50 7.23 7.19 5.99 6.02 6.73 2.00 0.00 115

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Wheat January 25, 2019 2017-2018 2018-2019[f] 2019-2020[f] Area seeded (kha) 7,020 7,570 8,260 Area harvested (kha) 6,895 7,425 8,040 Yield 3.63 3.5 3.5 Production (kt) 25,022 26,024 28,100 Imports (b) 75 80 80 Total supply (kt) 30,125 30,800 32,180 Exports (kt) [c] 17,480 18,700 18,500 Food and Industrial Use (kt) [d] 3,119 3,180 3,250 Feed, Waste & Dockage (kt) 4,051 4,073 4,103 Total Domestic Use (kt) [e] 7,949 8,100 8,180 Carry-out Stocks (kt) 4,696 4,000 5,500 Average Price ($/t) [g] 240 235-265 230-260 Source: Statistics Canada (STC) and Agriculture and Agri-Food Canada (AAFC) 119

World Wheat World all wheat (including durum) production is forecast to increase by 12 Mt to 745 Mt due to a higher seeded area. Supply is projected to be unchanged at 1,013 Mt due to lower carry in stocks. Total use is expected to increase by 8 Mt to 753 Mt because of growing use for food. Carry out stocks are forecast to fall by 8 Mt to 260 Mt. Excluding China, world all wheat stocks are expected to fall by 11 Mt to 114 Mt. 120

Canadian Wheat For 2019-20, the area seeded to wheat in Canada is forecast to increase by 9% from 2017-18 as a 4% decrease for winter wheat is more than offset by a 10% increase for spring wheat. The spring wheat area is forecast to increase because of relatively good prices for wheat and a shift out of durum and winter wheat in Western Canada. Production is projected to rise by 8%. Supply is forecast to increase by 5% due to lower carry-in stocks. Exports are forecast to fall slightly due to higher world production. Carry-out stocks are forecast to increase by 37% to 5.5 Mt. 121

224.29 125 145 165 185 205 225 245 1/6/2016 2/3/2016 3/2/2016 3/30/2016 4/27/2016 5/25/2016 6/22/2016 7/20/2016 8/17/2016 9/14/2016 10/12/2016 11/9/2016 12/7/2016 1/4/2017 2/1/2017 3/1/2017 3/29/2017 4/26/2017 5/24/2017 6/21/2017 7/19/2017 8/16/2017 9/6/2017 10/4/2017 11/1/2017 11/29/2017 12/27/2017 1/24/2018 2/21/2018 3/21/2018 4/18/2018 5/16/2018 6/13/2018 7/11/2018 8/8/2018 9/5/2018 10/3/2018 10/31/2018 11/28/2018 12/26/2018 Wheat 1 CPS Red 122

Minneapolis Hard Red Spring Wheat Futures March Contract Feb 13, 2019 123

335 Wheat 1 CWRS 315 295 275 255 251.06 235 215 195 175 1/6/2016 2/17/2016 3/30/2016 5/11/2016 6/22/2016 8/3/2016 9/14/2016 10/26/2016 12/7/2016 1/18/2017 3/1/2017 4/12/2017 5/24/2017 7/5/2017 8/16/2017 9/20/2017 11/1/2017 12/13/2017 1/24/2018 3/7/2018 4/18/2018 5/30/2018 7/11/2018 8/22/2018 10/3/2018 11/14/2018 12/26/2018 124

BLACK SOIL ZONE CROP PRODUCTION COSTS ($/ACRE) 2018 Crops Spring Spring Spring CPS CPS CPS Winter Winter Winter Wheat Wheat Wheat Wheat Wheat Wheat Wheat Wheat Wheat Plus 20% Neg 20% Plus 20% Neg 20% Plus 20% Neg 20% REVENUE PER ACRE Estimated Yield (bu./ac.,lb./ac.) (A) 50.0 68.0 60.0 Estimated On Farm Market Price/bu.,lb. (B) 6.50 7.80 5.20 4.40 5.28 3.52 4.45 5.34 3.56 Estimated Gross Revenue/ac 325.00 390.00 260.00 299.20 359.04 239.36 267.00 320.40 213.60 EXPENSES PER ACRE Variable Expenses/acre Seed 23.44 32.11 27.00 Fertilizer - Nitrogen 40.82 52.29 27.98 - Phosphorus 16.45 21.16 14.10 - Sulphur and Other 0.00 0.00 0.00 Chemical - Herbicides 59.11 72.40 62.93 - Insecticides/Fungicides 38.66 38.66 10.05 - Seed Treatments/Inoculants 6.32 8.43 7.90 Machinery Operating - Fuel 21.51 22.75 21.50 - Repair 10.61 10.61 10.61 Custom Work and Hired Labour 19.75 19.75 19.75 Crop Insurance Premium 6.73 7.65 11.59 Utilities and Miscellaneous 4.97 4.97 4.97 Interest on Variable Expenses 6.21 7.27 12.28 Total Variable Expenses 254.58 298.05 230.66 Other Expenses/acre Building Repair 0.84 0.84 0.84 Property Taxes 7.46 7.46 7.46 Business Overhead 3.37 3.37 3.37 Total Other Expenses (E) 11.67 11.67 11.67 Total Expenses 266.25 266.25 266.25 309.72 309.72 309.72 242.33 242.33 242.33 Farm Living 16.50 16.50 16.50 Off Farm Income 15.00 15.00 15.00 Farm Debt 75.00 75.00 75.00 Total 76.50 76.50 76.50 76.50 76.50 76.50 76.50 76.50 76.50 125 Residual For Growth -17.75 47.25-82.75-87.02-27.18-146.86-51.83 1.57-105.23

DARK BROWN SOIL ZONE CROP PRODUCTION COSTS ($/ACRE) 2018 Spring Spring Spring Durum Durum Durum CPS CPS CPS Winter Winter Winter Wheat Wheat Wheat Wheat Wheat Wheat Wheat Wheat Wheat Wheat Wheat Wheat REVENUE PER ACRE Estimated Yield (bu./ac.,lb./ac.) (A) 45.0 55.0 64.0 57.0 Estimated On Farm Market Price/bu.,lb. (B) 6.50 7.80 5.20 6.75 8.10 5.40 4.40 5.28 3.52 4.45 5.34 3.56 Estimated Gross Revenue/ac (AxB)=(C) 292.50 351.00 234.00 371.25 445.50 297.00 281.60 337.92 225.28 253.65 304.38 202.92 EXPENSES PER ACRE Variable Expenses/acre Seed 20.62 29.00 28.10 25.20 Fertilizer - Nitrogen 36.23 40.36 47.70 28.90 - Phosphorus 14.57 16.45 19.28 14.57 - Sulphur and Other 0.00 0.00 0.00 0.00 Chemical - Herbicides 59.11 44.96 72.40 62.93 - Insecticides/Fungicides 38.66 28.61 38.66 10.05 - Seed Treatments/Inoculants 5.56 6.79 7.37 7.37 Machinery Operating - Fuel 19.35 20.48 20.48 19.34 - Repair 9.38 9.38 9.38 9.38 Custom Work and Hired Labour 18.75 18.75 18.75 18.75 Crop Insurance Premium 5.40 8.07 5.62 7.57 Utilities and Miscellaneous 4.31 4.31 4.31 4.31 Interest on Variable Expenses 5.80 5.68 6.80 11.72 Total Variable Expenses (D) 237.74 232.84 278.85 220.09 Other Expenses/acre Building Repair 0.62 0.62 0.62 0.62 Property Taxes 4.92 4.92 4.92 4.92 Business Overhead 2.87 2.87 2.87 2.87 Total Other Expenses 8.41 8.41 8.41 8.41 Farm Living 16.50 16.50 16.50 16.50 Off Farm Income 15.00 15.00 15.00 15.00 Farm Debt 75.00 75.00 75.00 75.00 Total 76.50 76.50 76.50 76.50 Total Expenses 322.65 322.65 322.65 317.75 317.75 317.75 363.76 363.76 363.76 305.00 305.00 305.00 126 Net Farm Income -30.15 28.35-88.65 53.50 127.75-20.75-82.16-25.84-138.48-51.35-0.62-102.08 Crops

Global Durum Production (Million Bus) 129

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https://www.nass.usda.gov/charts_and_maps/field_crops/dwyld.php 132

https://www.nass.usda.gov/charts_and_maps/field_crops/dwprod.php 133

Global Durum World durum production increased by 1 Mt from 2017-18 to 38 Mt, according to the International Grains Council. The largest increases in production were for Algeria, Canada and the US, with smaller increases for Morocco and Tunisia. This was partly offset by decreases for the EU, Mexico, Australia, Turkey and Syria. Supply rose by only 0.8 Mt to 47.8 Mt because of lower carry-in stocks. Use is expected to increase by 0.2 Mt to 37.5 Mt as higher food use is partly offset by lower feed use. Carry-out stocks are forecast to increase by 0.5 Mt to 10.3 Mt. 134

Canadian Durum Wheat For 2018-19, Canadian durum production increased by 16% from 2017-18 to 5.745 million tonnes (Mt), according to Statistics Canada (STC), as a 19% increase in seeded area was partly offset by lower yields. The final production estimate was 0.39 Mt higher than the previous estimate. Saskatchewan accounted for 80% of the total production, Alberta for 19.7%, and Manitoba for 0.3%. Total supply increased by 6%, as the higher production was partly offset by lower carry-in stocks. 135

Canadian Durum Wheat Exports are forecast to decrease by 4%. Slower than expected exports for the first four months of the crop year and expectations that the low prices will result in higher producer carry-out stocks and significantly lower seeded area for 2019-20. Total domestic use is forecast to increase by 10% as the low prices will encourage more use of durum for feed. Carry-out stocks are forecast to rise by 35% to 2 Mt, 41% higher than the past five year average of 1.42 Mt. 136

Durum 2016-2017 2017-2018 2018-2019[f] Area seeded (kha) 2,469 2,106 2,503 Area harvested (kha) 2,333 2,088 2,456 Yield (t/ha) 3.33 2.38 2.34 Production (kt) 7,762 4,962 5,745 Imports (kt) [b] 11 8 10 Total supply (kt) 8,873 6,798 7,232 Exports (kt) [c] 4,534 4,387 4,200 Food and Industrial Use (kt) [d] 174 193 200 Feed, Waste & Dockage (kt) 2,133 500 649 Total Domestic Use (kt) [e] 2,511 934 1,032 Carry-out Stocks (kt) 1,828 1,477 2,000 Average Price ($/t) [g] 275 265 215-245 f: forecasts by AAFC. For 2018-19, area, yield and production are from the STC survey but imports and dispositions are forecast by AAFC. Source: Statistics Canada (STC) and Agriculture and Agri-Food Canada (AAFC) 137

335 Wheat 1 CWAD 315 295 275 255 235 215 223.45 195 175 1/6/2016 2/17/2016 3/30/2016 5/11/2016 6/22/2016 8/3/2016 9/14/2016 10/26/2016 12/7/2016 1/18/2017 3/1/2017 4/12/2017 5/24/2017 7/5/2017 8/16/2017 9/20/2017 11/1/2017 12/13/2017 1/24/2018 3/7/2018 4/18/2018 5/30/2018 7/11/2018 8/22/2018 10/3/2018 11/14/2018 12/26/2018 138

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BARLEY 140

152000 150000 148000 World Barley Production (TMT) 149,775 147,055 146000 144000 142000 140000 141,984 144,013 140,724 138000 136000 2014/15 2015/16 2016/17 2017/18 2018/19Dec 141

World Barley Consumption 152000 150000 148000 147,672 150,346 147,776 146000 144000 142000 142,505 142,581 140000 138000 2014/15 2015/16 2016/17 2017/18 2018/19Dec 142

Global Barley Production ICG Grains 143

World Barley: Situation & Outlook World barley stocks are historically low as nearly all of the world major producers and exporters had smaller crops and, in many cases, quality was also lower than normal. To-date for this crop year, the average price for feed barley has been at a US$75/tonne (t) premium to the world average FOB corn price, the highest in the last 10 years. Lower world supplies of malting barley, and especially quality malt, is also pushing these prices higher. 144

Canadian Barley For 2019-20, seeded area is forecast to be higher than 2018-19 due to high barley prices and low carry-in stocks. Production is forecast to increase by 6% to 8.9 Mt due to the higher area and an average total yield. Despite the lower carry-in stocks, total supply is forecast to increase by 3% to 10.0 Mt. Total domestic use is forecast to increase by 2% due to slightly higher feed use in cattle and hog production. Exports are forecast to increase slightly due to higher domestic supplies and a return to normal trade patterns. With a higher supply, barley carry-out stocks are forecast to increase by 10% to 1.3 Mt but it's still below the previous five-year averages. The Lethbridge cash feed barley price is forecast to decrease by 12% from 2018-19. 145

Barley January 25, 2019 2017-2018 2018-2019[f] 2019-2020[f] Area seeded (kha) 2,334 2,628 2,800 Area harvested (kha) 2,114 2,395 2,482 Yield (t/ha) 3.73 3.5 3.59 Production (kt) 7,891 8,380 8,899 Imports (kt) [b] 59 65 75 Total supply (kt) 10,072 9,701 9,974 Exports (kt) [c] 2,824 2,450 2,500 Food and Industrial Use (kt) [d] 49 86 86 Feed, Waste & Dockage (kt) 5,715 5,940 5,912 Total Domestic Use (kt) [e] 5,992 6,251 6,224 Carry-out Stocks (kt) 1,256 1,000 1,250 Average Price ($/t) [g] 227 240-270 220-250 Source: Statistics Canada 146

#1 CW Barley 5.00 4.50 4.42 4.00 3.50 3.00 2.50 2.00 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 2017 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 147

Saskatchewan Feed Barley Price 300 250 200 150 100 50 Dec-09 Apr-10 Aug-10 Dec-10 Apr-11 Aug-11 Dec-11 Apr-12 Aug-12 Dec-12 Apr-13 Aug-13 Dec-13 Apr-14 Aug-14 Dec-14 Apr-15 Aug-15 Dec-15 Apr-16 Aug-16 Dec-16 Apr-17 Aug-17 Dec-17 Apr-18 Aug-18 149

BLACK SOIL ZONE CROP PRODUCTION COSTS ($/ACRE) 2019 Malt Malt Malt Feed Feed Feed Barley Barley Barley Barley Barley Barley REVENUE PER ACRE Estimated Yield (bu./ac.,lb./ac.) (A) 66.0 Plus 20% Neg 20% 77.0 Plus 20% Neg 20% Estimated On Farm Market Price/bu.,lb. (B) 4.68 5.62 3.74 4.00 4.80 3.20 Estimated Gross Revenue/ac (AxB)=(C) 308.88 370.66 247.10 308.00 369.60 246.40 EXPENSES PER ACRE Variable Expenses/acre Seed 28.91 18.92 Fertilizer - Nitrogen 28.44 34.86 - Phosphorus 12.69 15.51 - Sulphur and Other 0.00 0.00 Chemical - Herbicides 72.40 28.99 - Insecticides/Fungicides 36.02 36.02 - Seed Treatments/Inoculants 7.73 6.44 Machinery Operating - Fuel 21.45 22.53 - Repair 10.61 10.61 Custom Work and Hired Labour 17.75 17.75 Crop Insurance Premium 5.10 5.10 Utilities and Miscellaneous 4.97 4.97 Interest on Variable Expenses 6.15 5.04 Total Variable Expenses (D) 252.22 252.22 252.22 206.74 206.74 206.74 Other Expenses/acre Building Repair 0.84 0.84 Property Taxes 7.46 7.46 Business Overhead 3.37 3.37 Total Other Expenses (E) 11.67 11.67 Farm Living 16.50 16.50 Off Farm Income 15.00 15.00 Farm Debt 75.00 75.00 Total 76.50 76.50 76.50 76.50 76.50 76.50 Total Expenses 340.39 340.39 340.39 294.91 294.91 294.91 Residual For Growth -31.51 30.27-93.29 13.09 74.69-48.51 150

Dark Brown Malt Malt Malt Feed Feed Feed Barley Barley Barley Barley Barley Barley REVENUE PER ACRE 60.0 Plus 20% Neg 20% 64.0 Plus 20% Neg 20% Estimated Yield (bu./ac.,lb./ac.) (A) 4.68 5.62 3.74 4.00 4.80 3.20 Estimated On Farm Market Price/bu.,lb. (B) 280.80 336.96 224.64 256.00 307.20 204.80 Estimated Gross Revenue/ac (AxB)=(C) EXPENSES PER ACRE Variable Expenses/acre Seed 25.40 16.68 Fertilizer - Nitrogen 26.14 31.65 - Phosphorus 11.75 14.10 - Sulphur and Other 0.00 0.00 Chemical - Herbicides 72.40 28.99 - Insecticides/Fungicides 36.02 0.00 - Seed Treatments/Inoculants 6.79 5.68 Machinery Operating - Fuel 19.30 20.27 - Repair 9.38 9.38 Custom Work and Hired Labour 17.75 17.75 Crop Insurance Premium 6.12 6.12 Utilities and Miscellaneous 4.31 4.31 Interest on Variable Expenses 5.88 3.87 Total Variable Expenses (D) 241.24 241.24 241.24 158.80 158.80 158.80 Other Expenses/acre Building Repair 0.62 0.62 Property Taxes 4.92 4.92 Business Overhead 2.87 2.87 Total Other Expenses (E) 8.41 8.41 8.41 8.41 8.41 8.41 Farm Living 16.50 16.50 Off Farm Income 15.00 15.00 Farm Debt 75.00 75.00 Total 76.50 76.50 76.50 76.50 76.50 76.50 Total Expenses 326.15 326.15 326.15 243.71 243.71 243.71 Residual For Growth -45.35 10.81-101.51 12.29 63.49-38.91 151

Oats 164

Major Oat Producers By Country (MMT) 2014/15 2015/16 2016/17 2017/18 2018/19Dec Production United States 1019 1300 940 717 815 Australia 1198 1300 2266 1120 900 Canada 2977 3425 3231 3733 3450 Russia 5267 4527 4750 5441 4800 European Union 7821 7524 8044 8072 8050 165

Major Oat Consumers (MMT) 2014/15 2015/16 2016/17 2017/18 2018/19Dec Australia 950 1025 1500 850 700 Brazil 305 345 775 675 725 Canada 1682 1620 1854 2035 1900 United States 2447 2702 2539 2358 2493 Russia 5200 4600 4800 5400 4800 European Union 7730 7400 7950 7900 7850 166

Major Oat Producing Country Ending Stocks (MMT) 2014/15 2015/16 2016/17 2017/18 2018/19Dec Brazil 10 16 68 23 63 Kazakhstan 33 27 75 75 75 Australia 93 143 419 139 89 Argentina 65 65 89 51 96 Russia 289 199 147 163 158 United States 780 824 731 595 525 European Union 770 690 637 629 684 Canada 693 947 703 784 744 167

Canadian Oats: Situation & Outlook For 2018-19, Canadian oat production decreased by 8% from 2017-18 to 3.4 Mt, due to lower harvested area and lower average yield. Production in Western Canada averaged 3.18 Mt 53% was in Saskatchewan, 22% in Manitoba, 22% in Alberta 2% in BC. Production in Eastern Canada averaged 0.27 Mt 63% was in Quebec, 25% in Ontario 12% in the Maritimes. 168

Canadian Oats: Situation & Outlook Due to lower production, total supply decreased by 5% to 4.2 Mt despite higher carry-in stocks. Total domestic use is forecast to decrease by 17% due to significantly lower feed use. Oat grain and product exports are forecast to increase by 6%. Carry-out stocks are forecast to decrease by 17% to 0.7 Mt and remain largely below the previous three and five-year averages. 169

Canadian Oats: Situation & Outlook For 2019-20, seeded area is forecast to increase by 5% from 2018-19 due to good US oat futures price levels. Based on the 5 year average for abandonment and yield, Canadian oat production is forecast to increase slightly to 3.5 Mt but, due to lower carry-in stocks, supply is expected to decrease marginally. Total domestic use is forecast to decrease slightly due to lower feed, waste and dockage as food and industrial use remains flat. Exports of oat grain and products are forecast to be slightly lower than 2018-19 due to lower supplies. Carry-out stocks are forecast to remain unchanged from 2018-19, at 0.7 Mt, remaining below the previous three and five-year averages. The Canadian oat price is forecast to increase due to higher coarse grain prices in the US and the weak Canadian dollar. 170

Oats [a]: January 25, 2019 2017-2018 2018-2019[f] 2019-2020[f] Area seeded (kha) 1,295 1,235 1,300 Area harvested (kha) 1,052 1,005 1,039 Yield (t/ha) 3.55 3.42 3.41 Production (kt) 3,733 3,436 3,546 Imports (kt) [b] 14 20 20 Total supply (kt) 4,451 4,241 4,216 Exports (kt) [c] 2,351 2,500 2,475 Food and Industrial Use (kt) [d] 109 125 125 Feed, Waste & Dockage (kt) 1,103 860 860 Total Domestic Use (kt) [e] 1,315 1,091 1,091 Carry-out Stocks (kt) 784 650 650 Average Price ($/t) [g] 218 225-255 230-260 Source: Statistics Canada 171

Oat Futures Feb 13, 2019 172

Feed Oats 215 195 200.64 175 155 135 115 95 75 1/6/2016 2/24/2016 4/13/2016 6/1/2016 7/20/2016 9/7/2016 10/26/2016 12/14/2016 2/1/2017 3/22/2017 5/10/2017 6/28/2017 8/16/2017 9/27/2017 11/15/2017 1/3/2018 2/21/2018 4/11/2018 5/30/2018 7/18/2018 9/5/2018 10/24/2018 12/12/2018 173

Oats Black REVENUE PER ACRE Estimated Yield (bu./ac.,lb./ac.) (A) 105.0 Plus 20% Neg 20% Estimated On Farm Market Price/bu.,lb. (B) 3.00 3.60 2.40 Estimated Gross Revenue/ac (AxB)=(C) 315.00 378.00 252.00 EXPENSES PER ACRE Variable Expenses/acre Seed 28.12 Fertilizer - Nitrogen 35.77 - Phosphorus 15.04 - Sulphur and Other 0.00 Chemical - Herbicides 22.95 - Insecticides/Fungicides 10.05 - Seed Treatments/Inoculants 3.95 Machinery Operating - Fuel 22.27 - Repair 10.61 Custom Work and Hired Labour 17.75 Crop Insurance Premium 8.98 Utilities and Miscellaneous 4.97 Interest on Variable Expenses 4.51 Total Variable Expenses (D) 184.97 184.97 184.97 Other Expenses/acre Building Repair 0.84 Property Taxes 7.46 Business Overhead 3.37 Total Other Expenses (E) 11.67 11.67 11.67 Farm Living 16.50 Off Farm Income 15.00 Farm Debt 75.00 Total 76.50 76.50 76.50 Total Expenses 273.14 273.14 273.14 Residual For Growth 41.86 104.86-21.14 174

Oats Dark Brown REVENUE PER ACRE Estimated Yield (bu./ac.,lb./ac.) (A) 100.0 Plus 20% Neg 20% Estimated On Farm Market Price/bu.,lb. (B) 3.00 3.60 2.40 Estimated Gross Revenue/ac (AxB)=(C) 300.00 360.00 240.00 EXPENSES PER ACRE Variable Expenses/acre Seed 23.43 Fertilizer - Nitrogen 27.06 - Phosphorus 11.28 - Sulphur and Other 0.00 Chemical - Herbicides 22.95 - Insecticides/Fungicides 0.00 - Seed Treatments/Inoculants 3.29 Machinery Operating - Fuel 20.05 - Repair 9.38 Custom Work and Hired Labour 17.75 Crop Insurance Premium 8.43 Utilities and Miscellaneous 4.31 Interest on Variable Expenses 3.70 Total Variable Expenses (D) 151.63 151.63 151.63 Other Expenses/acre Building Repair 0.62 Property Taxes 4.92 Business Overhead 2.87 Total Other Expenses (E) 8.41 8.41 8.41 Farm Living 16.50 Off Farm Income 15.00 Farm Debt 75.00 Total 76.50 76.50 76.50 Total Expenses 236.54 236.54 236.54 Residual For Growth 63.46 123.46 3.46 175

Soybeans 177

Projected U.S. 2019/20 Crop Margins 178

184

186

Canadian Soybeans For 2018-19, soybean production is estimated at 7.3 Mt, a drop of 0.45 Mt from last year, based on a harvested area of 2.54 mln ha and yields of 2.86 t/ha. In Western Canada, the province of Manitoba is the second largest soybean producing province, at 1.6 Mt, down sharply from the 2.2 Mt grown last year, while in Saskatchewan soybean output is estimated at 0.2 Mt. 187

March Soybean Futures as of Feb 13, 2019 191

Black Soybean REVENUE PER ACRE Estimated Yield (bu./ac.,lb./ac.) (A) 26.0 Plus 20% Neg 20% Estimated On Farm Market Price/bu.,lb. (B) 11.48 13.78 9.18 Estimated Gross Revenue/ac (AxB)=(C) 298.48 358.18 238.78 EXPENSES PER ACRE Variable Expenses/acre Seed 82.39 Fertilizer - Nitrogen 2.34 - Phosphorus 11.28 - Sulphur and Other 0.00 Chemical - Herbicides 55.59 - Insecticides/Fungicides 0.00 - Seed Treatments/Inoculants 14.00 Machinery Operating - Fuel 18.55 - Repair 10.61 Custom Work and Hired Labour 19.75 Crop Insurance Premium 7.67 Utilities and Miscellaneous 4.97 Interest on Variable Expenses 5.68 Total Variable Expenses (D) 232.83 232.83 232.83 * Other Expenses/acre Building Repair 0.84 Property Taxes 7.46 Business Overhead 3.37 Total Other Expenses (E) 11.67 11.67 11.67 Total Expenses (D+E+F)=(G) Farm Living Off Farm Income 16.50 Farm Debt 15.00 Total 75.00 76.50 76.50 76.50 Total Expenses 321.00 321.00 321.00 Residual For Growth -22.52 37.18-82.22 192

Canola 193

World Canola Production Vs Ending Stocks (MMT) 76 74 72 70 68 66 64 62 9 8 7 6 5 4 3 2 1 60 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 Production Ending Stocks 0 194

World Canola Production 80000 70000 60000 50000 40000 30000 20000 10000 0 2016/17 2017/18 2018/19 Meal Rapeseed Oil Rapeseed Oilseed Rapeseed 195

World Canola Imports 18000 16000 14000 12000 10000 8000 6000 4000 2000 15,528 15,151 5,886 6,121 6,125 4,391 4,499 4,765 16,731 0 2016/17 2017/18 2018/19 Meal Rapeseed Oil Rapeseed Oilseed Rapeseed 196

World Canola Exports (TMT) 18000 16000 15,800 16,355 17,052 14000 12000 10000 8000 6000 4000 6,031 6,340 6,162 4,522 4,620 4,826 2000 0 2016/17 2017/18 2018/19 Meal Rapeseed Oil Rapeseed Oilseed Rapeseed 197

World Canola Consumption (TMT) 80000 70000 70,336.00 71,085.00 70,652.00 60000 50000 40000 30000 38,685.00 39,244.00 38,996.00 28,898.00 28,652.00 27,825.00 20000 10000 0 2016/17 2017/18 2018/19 Meal Rapeseed Oil Rapeseed Oilseed Rapeseed 198

World Canola Ending Stocks (TMT) 8000 7000 6000 5000 4000 3000 2000 1000 1,030 4,152.00 $4,989.00 $6,728.00 $5,972.00 3,239.00 3,060.00 611 636 0 2016/17 2017/18 2018/19 Meal Rapeseed Oil Rapeseed Oilseed Rapeseed 199

World Canola: Situation & Outlook World canola-rapeseed production is estimated at 63.0 Mt by Oil World compared to 65.5 Mt in 2017-18 and the 63.2 Mt in 2016-17. Canada is the world's largest grower of canola at 20.3 Mt followed by the European Union at 19.6 Mt. India is a distant third, growing 6.3 Mt of canola-rapeseed, followed by China at 4.8 Mt. Australian rapeseed production fell by almost 40%, to 2.2 Mt due to drought. Ukrainian and Russian production are estimated at 3.0 Mt and 2.1 Mt, respectively. Production in other countries was 3.1 Mt up from slightly under 3.1 Mt. 202

World Canola: Situation & Outlook World exports of canola-rapeseed is estimated at 16.6 Mt up slightly from the 16.2 Mt shipped around the world in 2017-18 but down from the 17.1 Mt exported in 2016-17. Canada is the world's largest exporter, accounting for slightly over two-thirds of the world trade in canola. Australia is forecast to export 1.6 Mt of canola, versus the 2.4 Mt shipped in 2017-18 and 3.5 Mt exported in 2016-17. Ukraine is forecast to export 2.3 Mt of rapeseed, similar to 2017-18. Exports from other countries are estimated at 1.4 Mt, vs 1.1 Mt for 2017-18 and 0.7 Mt in 2016-17. 203

Canadian Canola: Situation & Outlook For 2019-20, seeded area in Canada is forecast to increase by 1% to 9.4 million hectares (Mha), on a shift out of soybeans and lentils across Western Canada, expected steady yields and a projected slight strengthening of prices. The gains in area will be limited by competition from burdensome world soybean and palm oil supplies and continued large carry-out stocks. Harvested area is forecast at 9.3 Mha while yields are projected at 2.2 tonnes per hectare (t/ha). Production is forecast to rise to 20.5 Mt, versus the 20.3 Mt grown in 2018-19. Total supply is forecast marginally down to 22.9 Mt, as a lower carry-in stocks offsets the rise in output. 204

Canadian Canola: Situation & Outlook Exports are forecast up by 2% to 11.2 Mt on support by the slow but steady growth in world consumption of vegetable oils and high oil content oilseeds, with the rate of growth constrained by stiff competition from burdensome world supplies of oilseeds and oilseed coproducts. Domestic crush is forecast to fall slightly to 9.1 Mt, due to competition from large world supplies of competing soybean oil and palm oil. Carry-out stocks are forecast unchanged at 2.3 Mt for a stocks-to-use ratio of 11% while canola prices are expected to rise slightly in the range of $510-550/t. 205

Canola : January 25, 2019 2017-2018 2018-2019[f] 2019-2020[f] Area seeded (kha) 9,313 9,232 9,350 Area harvested (kha) 9,273 9,120 9,258 Yield (t/ha) 2.3 2.23 2.21 Production (kt) 21,328 20,343 20,500 Imports (kt) [b] 108 100 100 Total supply (kt) 22,777 22,948 22,900 Exports (kt) [c] 10,723 11,000 11,200 Food and Industrial Use (kt) [d] Feed, Waste & Dockage (kt) 9,269 9,200 9,100 212 397 249 Total Domestic Use (kt) [e] 9,548 9,648 9,400 Carry-out Stocks (kt) 2,506 2,300 2,300 Average Price ($/t) [g] 539 495-535 510-550 Source: Statistics Canada (STC) and Agriculture and Agri-Food Canada (AAFC) 206

520 Canola 1 Canada Cash 500 480 460 457.96 440 420 400 1/3/2018 1/17/2018 1/31/2018 2/14/2018 2/28/2018 3/14/2018 3/28/2018 4/11/2018 4/25/2018 5/9/2018 5/23/2018 6/6/2018 6/20/2018 7/4/2018 7/18/2018 8/1/2018 8/15/2018 8/29/2018 9/12/2018 9/26/2018 10/10/2018 10/24/2018 11/7/2018 11/21/2018 12/5/2018 12/19/2018 1/2/2019 1/9/2019 208

March Soybean Futures as of Feb 4, 2019 209

March Canola Futures Feb 13, 2019 210

March Canola Futures Jan 28, 2019 211

Black Canola REVENUE PER ACRE Estimated Yield (bu./ac.,lb./ac.) (A) 40.0 Plus 20% Neg 20% Estimated On Farm Market Price/bu.,lb. (B) 10.75 12.90 8.60 Estimated Gross Revenue/ac (AxB)=(C) 430.00 516.00 344.00 EXPENSES PER ACRE Variable Expenses/acre Seed 62.60 Fertilizer - Nitrogen 41.28 - Phosphorus 22.57 - Sulphur and Other 5.64 Chemical - Herbicides 46.18 - Insecticides/Fungicides 20.82 - Seed Treatments/Inoculants 0.00 Machinery Operating - Fuel 20.43 - Repair 10.61 Custom Work and Hired Labour 17.75 Crop Insurance Premium 13.10 Utilities and Miscellaneous 4.97 Interest on Variable Expenses 6.65 Total Variable Expenses (D) 272.60 272.60 272.60 Other Expenses/acre Building Repair 0.84 Property Taxes 7.46 Business Overhead 3.37 Total Other Expenses (E) 11.67 11.67 11.67 Total Expenses (D+E+F)=(G) Farm Living 16.50 Off Farm Income 15.00 Farm Debt 75.00 Total 76.50 76.50 76.50 Total Expenses 360.77 360.77 360.77 Residual For Growth 69.23 155.23-16.77 212

Dark Brown Canola REVENUE PER ACRE Estimated Yield (bu./ac.,lb./ac.) (A) 40.0 Plus 20% Neg 20% Estimated On Farm Market Price/bu.,lb. (B) 10.75 12.90 8.60 Estimated Gross Revenue/ac (AxB)=(C) 430.00 516.00 344.00 EXPENSES PER ACRE Variable Expenses/acre Seed 62.60 Fertilizer - Nitrogen 40.36 - Phosphorus 22.57 - Sulphur and Other 5.43 Chemical - Herbicides 46.18 - Insecticides/Fungicides 20.82 - Seed Treatments/Inoculants 0.00 Machinery Operating - Fuel 18.39 - Repair 9.38 Custom Work and Hired Labour 17.75 Crop Insurance Premium 13.14 Utilities and Miscellaneous 4.31 Interest on Variable Expenses 6.52 Total Variable Expenses (D) 267.45 267.45 267.45 Other Expenses/acre Building Repair 0.62 Property Taxes 4.92 Business Overhead 2.87 Total Other Expenses (E) 8.41 8.41 8.41 Total Expenses (D+E+F)=(G) 275.86 Farm Living 16.50 Off Farm Income 15.00 Farm Debt 75.00 Total 76.50 76.50 76.50 Total Expenses 352.36 352.36 352.36 Residual For Growth 77.64 163.64-8.36 213

Flax 215

Canadian Flax: Situation & Outlook 2019 For 2018-19, flaxseed production is estimated at 0.49 Mt on a harvested area of 0.34 million hectares (mln ha) and yields of 1.4 t/ha. Total supplies of flaxseed are forecast to fall by slightly over 20%, to 0.63 Mt, as a decline in carry-in stocks supplements the drop in production. Exports are forecast at 0.40 Mt while total domestic use falls to 0.13 Mt on a drop in feed, waste and dockage. Carry-out stocks are forecast to fall to 0.10 Mt for a stocks-to-use ratio of 19%. The average flaxseed price is expected to rise to $485-505/t. 216

Flaxseed 2016-2017 2017-2018 2018-2019[f] Area seeded (kha) 381 421 347 Area harvested (kha) 342 419 342 Yield (t/ha) 1.73 1.33 1.44 Production (kt) 591 555 493 Imports (kt) [b] 17 7 10 Total supply (kt) 887 802 631 Exports (kt) [c] 500 515 400 Food and Industrial Use (kt) [d] 0 0 0 Feed, Waste & Dockage (kt) 128 143 115 Total Domestic Use (kt) [e] 147 159 131 Carry-out Stocks (kt) 240 128 100 Average Price ($/t) [g] 458 463 485-505 f: forecasts by AAFC. For 2018-19, area, yield and production are from the STC survey but imports and dispositions are forecast by AAFC. Source: Statistics Canada 217

Flax 510 490 498.49 470 450 430 410 390 370 350 1/6/2016 2/17/2016 3/30/2016 5/11/2016 6/22/2016 8/3/2016 9/14/2016 10/26/2016 12/7/2016 1/18/2017 3/1/2017 4/12/2017 5/24/2017 7/5/2017 8/16/2017 9/20/2017 11/1/2017 12/13/2017 1/24/2018 3/7/2018 4/18/2018 5/30/2018 7/11/2018 8/22/2018 10/3/2018 11/14/2018 12/26/2018 218

Black Flax REVENUE PER ACRE Estimated Yield (bu./ac.,lb./ac.) (A) 26.0 Plus 20% Neg 20% Estimated On Farm Market Price/bu.,lb. (B) 12.50 15.00 10.00 Estimated Gross Revenue/ac (AxB)=(C) 325.00 390.00 260.00 EXPENSES PER ACRE Variable Expenses/acre Seed 16.03 Fertilizer - Nitrogen 29.35 - Phosphorus 8.93 - Sulphur and Other 0.00 Chemical - Herbicides 55.10 - Insecticides/Fungicides 27.60 - Seed Treatments/Inoculants 1.86 Machinery Operating - Fuel 19.50 - Repair 10.61 Custom Work and Hired Labour 17.75 Crop Insurance Premium 10.93 Utilities and Miscellaneous 4.97 Interest on Variable Expenses 5.07 Total Variable Expenses (D) 207.70 207.70 207.70 Other Expenses/acre Building Repair 0.84 Property Taxes 7.46 Business Overhead 3.37 Total Other Expenses (E) 11.67 11.67 11.67 Farm Living 16.50 Off Farm Income 15.00 Farm Debt 75.00 Total 76.50 76.50 76.50 Total Expenses 295.87 295.87 295.87 Residual For Growth 29.13 94.13-35.87 219

Dark Brown Flax REVENUE PER ACRE Estimated Yield (bu./ac.,lb./ac.) (A) 24.0 Plus 20% Neg 20% Estimated On Farm Market Price/bu.,lb. (B) 12.50 15.00 10.00 Estimated Gross Revenue/ac (AxB)=(C) 300.00 360.00 240.00 EXPENSES PER ACRE Variable Expenses/acre Seed 15.21 Fertilizer - Nitrogen 30.27 - Phosphorus 9.40 - Sulphur and Other 0.00 Chemical - Herbicides 55.10 - Insecticides/Fungicides 27.60 - Seed Treatments/Inoculants 1.76 Machinery Operating - Fuel 17.55 - Repair 9.38 Custom Work and Hired Labour 17.75 Crop Insurance Premium 8.76 Utilities and Miscellaneous 4.31 Interest on Variable Expenses 4.93 Total Variable Expenses (D) 202.02 202.02 202.02 Other Expenses/acre Building Repair 0.62 Property Taxes 4.92 Business Overhead 2.87 Total Other Expenses (E) 8.41 8.41 8.41 Farm Living 16.50 Off Farm Income 15.00 Farm Debt 75.00 Total 76.50 76.50 76.50 Total Expenses 286.93 286.93 286.93 Residual For Growth 13.07 73.07-46.93 220

Peas 222

Peas: Situation & Outlook 2019 For 2018-19, production decreased by 13% to 3.6 million tonnes (Mt) due to lower harvested area, particularly in Saskatchewan and Alberta. Yields were similar to the previous year. Yellow and green pea types are expected to account for about 3.0 Mt and 0.4 Mt, respectively, with the remainder spread across other varieties. Supply has decreased by only marginally, to 4.2 Mt, due to higher carry-in stocks. Exports are forecast at 2.6 Mt, largely due to lower imports by India. This is expected to be partly offset by record exports to China. Carry-out stocks are forecast to increase due to lower export forecast. The average price is expected to be similar to 2017-18, with lower yellow pea prices offset by higher green pea prices. There are expectations for an increase in carry-out stocks in 2018-19. 223

Peas: Situation & Outlook 2019 For 2019-20, seeded area is forecast to be relatively unchanged from 2018-19 at 1.46 Mha, because of good returns relative to other crops. Dry peas continue to be recognised as a beneficial part of a crop rotation plan. Production is expected to rise marginally to 3.6 Mt, with an expectation of trend yields. Supply is forecast to rise marginally to 4.3 Mt due to similar carry-in stocks. Despite the tariff in India, exports to other countries are expected to rise from 2018-19 and carry-out stocks are expected to fall. The average price is expected to be marginally lower than 2018-19, due to lower green pea prices and ample world supply. 224

Dry Peas January 25, 2019 2018-2019- 2017-2018 2019[f] 2020[f] Area seeded (kha) 1,656 1,463 1,460 Area harvested (kha) 1,642 1,431 1,435 Yield (t/ha) 2.5 2.5 2.51 Production (kt) 4,112 3,581 3,600 Imports (kt) [b] 12 20 15 Total supply (kt) 4,424 4,251 4,265 Exports (b) 3,083 2,700 2,800 Total Domestic Use (c) 691 901 935 Carry-out Stocks (kt) 650 650 530 Stocks-to-Use Ratio 17 18 14 Average Price (d) 265 255-285 245-275 Source: Statistics Canada (STC) and Agriculture and Agri-Food Canada (AAFC) 225

11 10.5 10 9.5 9 8.5 8 7.5 7 6.5 6 Field Peas Green (dollars/bu) 10.5 1/4/2017 2/1/2017 3/1/2017 3/29/2017 4/26/2017 5/24/2017 6/21/2017 7/19/2017 8/16/2017 9/13/2017 10/11/2017 11/8/2017 12/6/2017 1/3/2018 1/31/2018 2/28/2018 3/28/2018 4/25/2018 5/23/2018 6/20/2018 7/18/2018 8/15/2018 9/12/2018 10/10/2018 11/7/2018 12/5/2018 1/2/2019 226

10 9.5 9 8.5 8 7.5 7 6.5 6 5.5 5 Field Peas Yellow (dollars/bu) 7.37 1/4/2017 2/1/2017 3/1/2017 3/29/2017 4/26/2017 5/24/2017 6/21/2017 7/19/2017 8/16/2017 9/13/2017 10/11/2017 11/8/2017 12/6/2017 1/3/2018 1/31/2018 2/28/2018 3/28/2018 4/25/2018 5/23/2018 6/20/2018 7/18/2018 8/15/2018 9/12/2018 10/10/2018 11/7/2018 12/5/2018 1/2/2019 227

7 Field Peas Feed (dollars/bu) 6.5 6 5.5 5 4.5 4.59 4 3.5 1/4/2017 2/1/2017 3/1/2017 3/29/2017 4/26/2017 5/24/2017 6/21/2017 7/19/2017 8/16/2017 9/13/2017 10/11/2017 11/8/2017 12/6/2017 1/3/2018 1/31/2018 2/28/2018 3/28/2018 4/25/2018 5/23/2018 6/20/2018 7/18/2018 8/15/2018 9/12/2018 10/10/2018 11/7/2018 12/5/2018 1/2/2019 228

229

Lentils: Situation & Outlook For 2018-19, production decreased by 18% to 2.1 Mt due to lower harvested area and yields. Large green lentil production is estimated to have risen from last year to 0.6 Mt and red lentil production fell to about 1.2 Mt. Production of the other remaining lentil types is estimated to have risen to 0.3 Mt. Supply, however, increased marginally due to large carry-in stocks. Exports are forecast to increase to 1.8 Mt. 230

Lentils: Situation & Outlook To-date Mexico, United Arab Emirates and India are the top export markets. Imports are expected to be lower than the previous year due to the above average grade distribution. Carry-out stocks are expected to fall due to the increase in exports. The overall average price is forecast to fall below the levels achieved in 2017-18 due to weaker world demand, larger domestic carry-out stocks and an above average proportion of grade distribution at the No.1 or 2 grade. 231

Lentils: Situation & Outlook For 2019-20, area seeded in Canada is expected to fall 11% to 1.35 Mha, due to weak prices for the No.1 grades the previous year. Production is forecast to fall by 4% to 2.0 Mt. With lower carry-in stocks, supply is expected to fall to 2.8 Mt, the lowest since 2014-15. Exports are forecast to rise from 2018-19 to 1.8 Mt with a lower exportable supply. Carry-out stocks are expected to fall sharply. With the assumption of an average grade distribution and grade discounts, the overall lentil price is forecast to rise from 2018-19. 232

Lentils [a]: January 25, 2019 2017-2018 2018-2019[f] 2019-2020[f] Area seeded (kha) 1,783 1,525 1,350 Area harvested (kha) 1,774 1,499 1,335 Yield (t/ha) 1.44 1.4 1.5 Production (kt) 2,559 2,092 2,000 Imports (kt) [b] 35 15 20 Total supply (kt) 2,908 2,984 2,820 Exports (b) 1,537 1,700 1,800 Total Domestic Use (c) 495 484 485 Carry-out Stocks (kt) 876 800 535 Stocks-to-Use Ratio 43 37 23 Average Price (d) 475 375-405 390-420 Source: Statistics Canada (STC) and Agriculture and Agri-Food Canada (AAFC) 234

235

236

70 Lentils Large Green 60 50 40 30 20 22.43 10 0 1/4/2017 2/1/2017 3/1/2017 3/29/2017 4/26/2017 5/24/2017 6/21/2017 7/19/2017 8/16/2017 9/13/2017 10/11/2017 11/8/2017 12/6/2017 1/3/2018 1/31/2018 2/28/2018 3/28/2018 4/25/2018 5/23/2018 6/20/2018 7/18/2018 8/15/2018 9/12/2018 10/10/2018 11/7/2018 12/5/2018 1/2/2019 237

60 Lentils Medium Green 50 40 30 20 18.86 10 0 1/4/2017 2/1/2017 3/1/2017 3/29/2017 4/26/2017 5/24/2017 6/21/2017 7/19/2017 8/16/2017 9/13/2017 10/11/2017 11/8/2017 12/6/2017 1/3/2018 1/31/2018 2/28/2018 3/28/2018 4/25/2018 5/23/2018 6/20/2018 7/18/2018 8/15/2018 9/12/2018 10/10/2018 11/7/2018 12/5/2018 1/2/2019 238

70 Lentils Small Green 60 50 40 30 20 10 18.5 0 1/4/2017 2/8/2017 3/15/2017 4/19/2017 5/24/2017 6/28/2017 8/2/2017 9/6/2017 10/11/2017 11/15/2017 12/20/2017 1/24/2018 2/28/2018 4/4/2018 5/9/2018 6/13/2018 7/18/2018 8/22/2018 9/26/2018 10/31/2018 12/5/2018 1/9/2019 239

60 Lentils French Green 50 40 30 20 19.5 10 0 1/4/2017 2/1/2017 3/1/2017 3/29/2017 4/26/2017 5/24/2017 6/21/2017 7/19/2017 8/16/2017 9/13/2017 10/11/2017 11/8/2017 12/6/2017 1/3/2018 1/31/2018 2/28/2018 3/28/2018 4/25/2018 5/23/2018 6/20/2018 7/18/2018 8/15/2018 9/12/2018 10/10/2018 11/7/2018 12/5/2018 1/2/2019 240

30 28 26 24 22 20 18 16 14 12 10 Lentils Red 18.34 1/4/2017 2/1/2017 3/1/2017 3/29/2017 4/26/2017 5/24/2017 6/21/2017 7/19/2017 8/16/2017 9/13/2017 10/11/2017 11/8/2017 12/6/2017 1/3/2018 1/31/2018 2/28/2018 3/28/2018 4/25/2018 5/23/2018 6/20/2018 7/18/2018 8/15/2018 9/12/2018 10/10/2018 11/7/2018 12/5/2018 1/2/2019 241

Mustard 242

Mustard For 2018-19, production rose sharply to 173 kt, due to higher area and yields. Production of yellow and brown types of mustard increased and oriental types fell. Supply, however, increased by only 8% due to lower carryin stocks. Exports are expected to be higher than last year at 115 kt. Due to larger supply, carry-out stocks are forecast to increase. The US and the EU are expected to remain the main export markets for Canadian mustard seed. The average price is forecast to fall due to higher Canadian and world carry-out stocks. 243

Mustard For 2019-20, the area seeded is expected to remain unchanged due to improved yields from the previous year. Production, however, is forecast to 180 kt due to similar expected yields. Supply is expected to be higher due to larger carry-in stocks and production. Exports are expected to be higher at 120 kt and carryout stocks are forecast to increase and pressure prices. The average price is forecast to fall when compared to 2018-19. 244

50 Mustard Brown 45 40 35 30 30.63 25 20 1/4/2017 2/1/2017 3/1/2017 3/29/2017 4/26/2017 5/24/2017 6/21/2017 7/19/2017 8/16/2017 9/13/2017 10/11/2017 11/8/2017 12/6/2017 1/3/2018 1/31/2018 2/28/2018 3/28/2018 4/25/2018 5/23/2018 6/20/2018 7/18/2018 8/15/2018 9/12/2018 10/10/2018 11/7/2018 12/5/2018 1/2/2019 245

45 Yellow Mustard 40 35 34.15 30 25 20 1/4/2017 2/1/2017 3/1/2017 3/29/2017 4/26/2017 5/24/2017 6/21/2017 7/19/2017 8/16/2017 9/13/2017 10/11/2017 11/8/2017 12/6/2017 1/3/2018 1/31/2018 2/28/2018 3/28/2018 4/25/2018 5/23/2018 6/20/2018 7/18/2018 8/15/2018 9/12/2018 10/10/2018 11/7/2018 12/5/2018 1/2/2019 246

36 Mustard Oriental 34 32 30 28 26 24 24.7 22 20 1/4/2017 2/1/2017 3/1/2017 3/29/2017 4/26/2017 5/24/2017 6/21/2017 7/19/2017 8/16/2017 9/13/2017 10/11/2017 11/8/2017 12/6/2017 1/3/2018 1/31/2018 2/28/2018 3/28/2018 4/25/2018 5/23/2018 6/20/2018 7/18/2018 8/15/2018 9/12/2018 10/10/2018 11/7/2018 12/5/2018 1/2/2019 247

Mustard Seed [a]: January 25, 2019 2017-2018 2018-2019- 2019[f] 2020[f] Area seeded (kha) 156 204 205 Area harvested (kha) 153 197 200 Yield (t/ha) 0.8 0.88 0.9 Production (kt) 122 173 180 Imports (kt) [b] 9 5 5 Total supply (kt) 211 228 255 Exports (b) 112 112 120 Total Domestic Use (c) 49 46 45 Carry-out Stocks (kt) 50 70 90 Stocks-to-Use Ratio 31 44 55 Average Price (d) 770 670-700 650-680 Source: Statistics Canada (STC) and Agriculture and Agri-Food Canada (AAFC) 248

Canary 249

Canary Seed For 2018-19, production fell sharply to 118 kt due to lower area and yields. Exports are expected to be lower than last year. The EU and Mexico are forecast to remain the main export markets, followed by Brazil and the US. The average price is forecast to be higher than the 2017-18 level. 250

Canary Seed For 2019-20, the area seeded is forecast to be higher than the previous year due to good potential returns compared to other crops. Production is expected to rise slightly as higher area seeded is partly offset by slightly lower yields; supply is also forecast to decrease. Exports are expected to be lower than in 2018-19 and carry-out stocks are expected to remain tight. The average price is forecast to be lower than the previous year. 251

Canary Seed [a]: January 25, 2019 2017-2018 2018-2019[f] 2019-2020[f] Area seeded (kha) 103 86 95 Area harvested (kha) 103 85 94 Yield (t/ha) 1.41 1.39 1.33 Production (kt) 145 118 125 Imports (kt) [b] 0 0 0 Total supply (kt) 165 133 130 Exports (b) 147 125 120 Total Domestic Use (c) 3 3 5 Carry-out Stocks (kt) 15 5 5 Stocks-to-Use Ratio 10 4 4 Average Price (d) 465 480-510 470-500 Source: Statistics Canada (STC) and Agriculture and Agri-Food Canada (AAFC) 252

26 Canary Seed 24 22 20 18 16 14 12 10 1/4/2017 2/1/2017 3/1/2017 3/29/2017 4/26/2017 5/24/2017 6/21/2017 7/19/2017 8/16/2017 9/13/2017 10/11/2017 11/8/2017 12/6/2017 1/3/2018 1/31/2018 2/28/2018 3/28/2018 4/25/2018 5/23/2018 6/20/2018 7/18/2018 8/15/2018 9/12/2018 10/10/2018 11/7/2018 12/5/2018 1/2/2019 253

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Cattle 262

Canadian Dollar US 1 0.95 0.9 0.85 0.8 0.75 0.7564 0.7 0.65 0.6 1/1/2014 3/19/2014 6/4/2014 8/20/2014 11/5/2014 1/21/2015 4/8/2015 6/24/2015 9/9/2015 11/25/2015 2/10/2016 4/27/2016 7/13/2016 9/28/2016 12/14/2016 3/1/2017 5/17/2017 8/2/2017 10/18/2017 1/3/2018 3/21/2018 6/6/2018 8/22/2018 11/7/2018 263

264

1.5% increase in US Beef Cows in 2019 = 475,845 head 265

266

267

U.S. Cattle on Feed Cattle and calves on feed for the slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 11.7 million head on December 1, 2018. The inventory was 2 percent above December 1, 2017. Placements in feedlots during November totaled 2.00 million head, 5 percent below 2017. Net placements were 1.92 million head. During November, placements of cattle and calves weighing less than 600 pounds were 550,000 head, 600-699 pounds were 495,000 head, 700-799 pounds were 416,000 head, 800-899 pounds were 315,000 head, 900-999 pounds were 115,000 head, and 1,000 pounds and greater were 105,000 head. Marketings of fed cattle during November totaled 1.87 million head, 1 percent above 2017. Marketings were the highest for November since the series began in 1996. 268

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275

276

March Futures as of Jan 29, 2019 277

278

Live Cattle Futures April 2019 279

280

Total cattle inventories, July 1, 2017 & 2018, Proj 2019 Jan 1 thousands of head 2018 inventories 2017 inventories 2019 Proj Canada 12,435.00 12,535.00 12,505 Alberta 5,060.00 5,135.00 5,105 Saskatchewan 2,600.00 2,630.00 2,613 Ontario 1,613.80 1,622.50 1,610 Quebec 1,140.00 1,135.00 1,145 Manitoba 1,120.00 1,135.00 1,125 British Columbia 680 660 682 Atlantic provinces 221.2 217.5 225 281

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283

240 500-600 Feeder Steers 235 230 225 220 215 211.75 210 205 1/3/2018 1/17/2018 1/31/2018 2/14/2018 2/28/2018 3/14/2018 3/28/2018 4/11/2018 4/25/2018 5/9/2018 5/23/2018 6/6/2018 6/20/2018 7/4/2018 7/18/2018 8/1/2018 8/15/2018 8/29/2018 9/12/2018 9/26/2018 10/10/2018 10/24/2018 11/7/2018 11/21/2018 12/5/2018 284

285

286

300 700-800 Feeder Steers 250 200 188.17 150 100 50 0 1/6/2010 5/12/2010 9/15/2010 1/19/2011 5/25/2011 9/28/2011 2/1/2012 6/6/2012 10/10/2012 2/13/2013 6/19/2013 10/23/2013 2/26/2014 7/2/2014 11/5/2014 3/11/2015 7/15/2015 11/18/2015 3/23/2016 7/27/2016 11/30/2016 4/5/2017 8/9/2017 12/13/2017 4/18/2018 8/22/2018 12/26/2018 287

220 700-800 Feeder Steers 210 200 190 188.17 180 170 160 1/3/2018 1/17/2018 1/31/2018 2/14/2018 2/28/2018 3/14/2018 3/28/2018 4/11/2018 4/25/2018 5/9/2018 5/23/2018 6/6/2018 6/20/2018 7/4/2018 7/18/2018 8/1/2018 8/15/2018 8/29/2018 9/12/2018 9/26/2018 10/10/2018 10/24/2018 11/7/2018 11/21/2018 12/5/2018 12/19/2018 288

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