TORONTO, ONTARIO and CHICAGO, ILLINOIS and MILWAUKEE, WISCONSIN--(Marketwired - Jun 27, 2013) - Despite some regions experiencing heavy rain in May and June, the outlook for Canada's crop development remains positive, with Canadian farmers still enjoying higher than normal prices for a number of crops, according to BMO Economics. The season has had a wet start south of the border too, causing some delays to spring planting. However, the outlook for the U.S. agriculture sector is still better than last year when the Midwest was hit by a severe drought.

"Canadian farmers have benefitted from increased demand and higher prices after U.S. crop yields were depressed by last summer's drought," said Aaron Goertzen, Economist, BMO Capital Markets. "Increased supply following this summer's harvest - as U.S. farmers get back on track - will likely mean lower prices for Canadian farmers, but should also help reduce food prices for North American consumers.

Canadian Outlook Encouraging With Little Impact from Flooding

According to David Rinneard, Director of Agriculture and Agribusiness, BMO Bank of Montreal, stable crop prices and good yields are good news, and not just for crop producers. "Adequate supplies of reasonably priced inputs will be welcome news for Canada's cattle and hog producers. This, compounded by plenty of hay-spurring rain, leave livestock producers better poised for 2013. Together, Canada's agriculture industry should be looking forward to a well balanced year," Mr. Rinneard said.

In the Canadian west, seeding is reported to be complete or nearly complete, with the pace of overall planting being broadly in line with historical norms.

Although the flood in Alberta has affected some agricultural producers, thankfully initial reports suggest that the impact on the agricultural sector has been relatively limited compared to the terrible damage inflicted on communities and public infrastructure in the province. The flood has hit producers only in the immediate vicinity of affected waterways, though it also resulted in the temporary closure of some meat processing facilities in the province. Overall, crop emergence in Alberta is reported to be noticeably ahead of last year.

In other regions, the BMO agriculture outlook noted:

• Saskatchewan crops are somewhat behind, producers in the province are reporting excellent crop quality.

• Wheat acreage in parts of the Prairies has been expanded this year, setting the stage for what could be a very strong harvest, provided the weather conditions remain supportive.

• Canola acreage is reported to be down moderately compared to last year - a reversal of the trend seen over the past decade - partly due to farmers' shift towards wheat.

• In Ontario, conditions are broadly supportive of corn and soybean crops

• Apple farmers in Ontario are faring far better this year after a late-spring frost killed more than 80 per cent of their blossoming crop in 2012. A healthier harvest this year will also begin to re-apply downward pressure to apple prices.

• Ontario's grape crop is also reported to be shaping up well. Although some growers have experienced higher than normal levels of precipitation, this year's crop is expected to be healthy as long as weather conditions remain balanced for the remainder of the season.