The year started with one of the coldest winters in recent memory, followed by a late spring, capped off by summer flooding in the southeastern part of the province. Thunderstorms packing hailstones the size of baseballs and the odd tornado have added to the misery.
Farmers, sitting on millions of tonnes of crops that couldn’t be delivered due to the extremely cold weather and shortage of railway capacity this winter, were two to three weeks late with their seeding this spring due to the cool, wet weather. Meanwhile, some of last year’s crops were delivered; others were left to deteriorate in the fields.
Hundreds of thousands of hectares of crops were severely damaged or destroyed by the flooding, almost 10% of a total crop of 13.2 million hectares. After last year’s bumper harvest of 38.4 million tonnes, an average crop of about 27 million tonnes is about the best farmers can hope for this year – assuming biblical plagues of locusts don’t eat it all.
Even if we get an average crop this autumn, the Saskatchewan economy will tumble in 2014, with a forecast of a meagre 1.4% gross domestic product growth (vs 4.5% last year). After posting the second-highest economic growth among the provinces in 2013, Saskatchewan is expected to finish well behind the middle of the pack this year.
But it’s not just farmers who’ve been suffering through Saskatchewan’s summer of discontent. Potash producers are reeling from low prices, thanks to the breakdown of the eastern European potash cartel last year.
And oil companies had to shut down production temporarily and stop drilling in southeastern Saskatchewan due to flooding, resulting in tens of millions of dollars of lost income. Even the province’s second-biggest producing uranium mine, Cameco Corp.’s Cigar Lake mine, had to suspend production temporarily this summer to prevent flooding (albeit underground).
Urban residents had plenty to grouse about, as well. June was the wettest on record, while June temperatures were no hell, either. July was better, but there were many cool and cloudy days.
And with more than 40 species of mosquitoes – including Culex tarsalis, which carries the West Nile virus – Saskatchewan’s sodden fields and sloughs have become prime breeding grounds for the bloodthirsty insects.
Not that you’d want to go swimming or boating anyway. The flooding overwhelmed Regina’s wastewater treatment plant, causing an excessive amount of phosphorous and other nasty stuff to flow into the Qu’Appelle Valley and Fishing Lakes. As a result, E. coli levels were unacceptably high for several days during the peak summer swimming season in one of the province’s vacation hot spots.
Even the Saskatchewan Roughriders have had a bad summer. The defending Grey Cup champions stumbled out of the gate, losing two of their first three games.
But hope springs eternal for resilient ‘Rider fans and Saskatchewan residents. The unemployment rate, at 3.9% in June, was the lowest in the country for the 18th straight month and jobs remain plentiful, with the second-highest job vacancy rate among the provinces (next to Alberta).
Royal Bank of Canada forecasts that Saskatchewan will bounce back in 2015 with 3% economic growth, second-best in the country and just behind Alberta. Living next to Alberta, Saskatchewanians are used to being second-best – but it still hurts.
© 2014 Investment Executive. All rights reserved.
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