Monsanto switches to a bag licence fee Monsanto has announced that it will be switching from its long-contentious $15 per acre technology fee to a bag licence fee on Roundup Ready canola effective September 1. The new system will be in place for the 2009 growing season. Roundup Ready canola technology has been sold based on acres since its introduction back in 1996. Under the new system, growers will purchase Roundup Ready canola technology at a cost per bag that works out to about $3.13 per pound of seed. Monsanto says invoicing will clearly indicate both the cost of the technology and the cost of the seed. Growers will still be required to sign a technology use agreement or TUA, but Monsanto says the new system will be simpler for everyone because the need to report and reconcile planted acres will be eliminated. At a seeding rate of five pounds per acre, the cost to growers will be slightly above the $15 per acre currently being charged. Lower seeding rates will result in a cost that drops below $15 an acre. With the rising price of canola seed, adding another $3 plus dollars per pound isn’t as big a deal as it would have been when the technology was originally introduced. The new system should save a lot of administration as well as acreage audits. I’m Kevin Hursh.
June 27, 2008
GPS has revolutionized field operations If you had to pick the greatest farm equipment innovation of the past decade, my vote would go to GPS guidance systems. GPS light bars have quickly led to auto steer systems. Either hooked into the power steering or attached manually to the steering wheel, the systems have continued to improve while coming down in price. The steering wheel systems that can be moved from one outfit to another are particularly cost effective. The greatest use of auto steer is on sprayers. Foam markers have largely become a thing of the past. The advanced systems actually sense overlap and turn off spray nozzles automatically. At the cost of inputs, it doesn’t take long to pay for a system. With seeding outfits ever larger, auto steer has become very popular there as well. It minimizes overlap and misses while taking a lot of stress away for the operator. Producers say they can work longer hours. Another benefit is that inexperienced operators and operators that are getting up in years are able to drive perfectly straight while paying attention to all the other equipment functions that need to be monitored. A lot of producers also say they love auto steer on the combine so they’re always cutting the full width of the header. About the only knock you hear about GPS guidance is that now and then satellite signals fail for a period of time. Not long ago, auto steer seemed like science fiction. Now there are many producers who wouldn’t know what to do without it. I’m Kevin Hursh.
June 26, 2008
Pre-buying fertilizer for 2009? Fertilizer prices that were sky high at seeding time have continued to increase. Urea (46-0-0) was around $625 a tonne until about a month ago. Now there are retailers quoting $850 a tonne. Anhydrous ammonia is also up dramatically. Phosphate fertilizer went from $650 a tonne at the beginning of the calendar year to around $1,200 at seeding time. Now there are quotes of around $1,350. Sulphur is higher than we’ve ever seen it and so is potassium. Buying fertilizer early usually pays and there are producers already considering purchases for the 2009 crop. Most analysts believe prices will continue to rise, but it’s tough to look at the current record high prices as a deal. Cash flow is a huge issue. Even if it was known for certain that fertilizer prices will continue to push upwards, how do you find the money to buy now? Huge amounts are being invested to grow the 2008 crop and any returns from the crop are months away. If you have the money or the credit to pre-purchase fertilizer, if you need additional fertilizer bins that could prove difficult. Many suppliers are sold out. I’m Kevin Hursh.
June 25, 2008
Specialty crop acreage For the first time, reds are the dominant class of lentils in this country. In the seeded acreage report released yesterday by Statistics Canada, red lentils in Saskatchewan are at 740,000 acres, surpassing large greens at 600,000 acres. Large greens increased by 7 per cent compared to last year, while reds increased a whopping 57 per cent as growers responded to the very high prices being paid for reds. Not surprisingly small green lentils are down by nearly 30 per cent to 180,000 acres. Leading up to the spring, small greens were running at a steep price discount to the other classes of lentils. Despite record high prices, field peas are actually down by about one per cent. Stat Can pegs the area at 2.9 million acres. Despite great prices, mustard acres in the province have increased by only 2.9 per cent as compared to last year. Stat Can says there are 360,000 acres of mustard in the province. Canaryseed has dropped. Last year, we had 425,000 acres. This year acreage is pegged at 380,000, a decline of 10.6 per cent. Canaryseed prices are high from a historical perspective, but obviously they weren’t as attractive as some other seeding choices. As expected, there has been a major reduction in chickpeas. Saskatchewan’s has only 180,000 acres of chickpeas, less than half of what was seeded in the province last year. I’m Kevin Hursh.
June 23, 2008
Canola crop woes Last week at the Farm Progress Show I heard many producers comment that canola crops looked poor in their region. That corresponds with information in this week’s crop report from Saskatchewan Agriculture. Provincially, four per cent of the canola crop is rated as excellent, 49 per cent is rated as good, 36 per cent is fair, nine per cent is poor and two per cent is very poor. Of the main crops, canola has the poorest stats. Germination has often been patchy and the crop has often been slow to develop. The worst crops in the province, including canola are in the north western grain belt where only 18 per cent of cropland is rated as having adequate topsoil moisture. Across the province, oilseed crops like canola, flax and mustard are also the furthest behind in development. Saskatchewan Agriculture says 69 per cent of oilseed crops are behind normal development as compared to 63 per cent of spring cereals and 57 per cent of pulse crops. East Central Saskatchewan has the latest crops. Eighty-four per cent of oilseeds in the east central region are considered behind normal development. I’m Kevin Hursh.
Late crop worries There are a lot of late crops in the province. Here’s hoping that doesn’t come back to haunt us. It’s a bit sobering to realize that we’re past the summer solstice. The days are actually getting shorter. It’s rare to see a canola crop that’s bolting. And there won’t be many spring seeded cereals even close to heading in the first week of July. While some crops are reasonably advanced, there are many other fields that look more like the end of May than the last week of June. The cool spring has delayed development. Temperatures were about normal last week, but that doesn’t compensate for the previous weeks that were well below normal. Late crops have multiple risks. The first risk is July heat. Last year a hot July was the hardest on crops that were trying to flower during the 30 plus degree days. Of course another risk is delayed maturity which could lead to frost damage in the fall. There’s also a greater risk that late crops will be downgraded from wet weather at harvest time. It’s early to be making predictions. However, at this juncture, it would appear that Saskatchewan has the potential for crop production that’s average to above average. On the other hand, there’s a higher than normal probability that we’re going to have quality issues. I’m Kevin Hursh.
June 19, 2008
From big to small at the Farm Progress Show One of the amazing things of the Farm Progress Show is that the products on display range from the very big to the very small. The Seed Master air drill is 90 feet wide, followed closely by the Seed Hawk. Morris and Bourgault also have very large seeding outfits. All are Saskatchewan companies. Pulling an air drill of that size seemed unconscionable just a few years ago. There are also some huge grain carts for unloading combines at harvest time. Viterra is showing off an 1800 bushel grain cart. The unloading auger is the diameter of a culvert. But the Farm Progress Show also features small innovations. One example is Bet’r Bait. Whether you’re a big farmer or a small farmer, mice can be a nuisance. A couple families at Montmartre came up with the idea of putting mice bait in small disposable syringes. The bait in the syringe is non-toxic and it doesn’t spoil. Having it in a syringe makes it easy to put the bait onto a mouse trap. The folks involved in Bet’r Bait say it attracts mice better than peanut better and better than cheese. Certainly, it’s a lot more convenient to use and sales for the young company are going very well. For some of the big equipment at the Farm Progress Show, the price tag is approaching half a million dollars. You can pick up a syringe of Bet’r Bait for $2.50. I’m Kevin Hursh.
June 18, 2008
Bjornerud faces tough choices At a few different venues in the past week, I’ve heard Saskatchewan Agriculture Minister Bob Bjornerud speak and respond to questions about Alberta’s big new support program for beef producers. Many beef producers here want to know what the Saskatchewan government is planning to do to level the playing field. Listening to Bjornerud and reading between the lines, it’s clear the government is facing difficult choices. Rural Saskatchewan in general and the cattle industry in particular tend to be Saskatchewan Party supporters. With a Sask Party government in power, they expect more for agriculture. On the other hand, the Sask Party government has a more free enterprise philosophy than the NDP and they’d rather not mess around with ad hoc payments. Bjornerud also points out that the second half of the Alberta support money is based on mandatory age verification and premise ID. He worries that producers will be stuck with the cost of these measures and little benefit once the ad hoc money ends. It’s interesting to note that the $300 million in direct support from Alberta in this one initiative is more than the entire agriculture budget in Saskatchewan. Matching the Alberta initiative would cost about $200 million and that could seriously limit the money available for other agricultural programming. Bjornerud says a decision on how to proceed has yet to be made. The issue has become his most difficult file. I’m Kevin Hursh.
June 17, 2008
Stay home and spray or go to the Farm Progress Show? The Western Canada Farm Progress Show starts today in Regina. I hope I’m wrong, but I think attendance could take a hit this year. From everything I’ve seen, the show is more organized and has wider appeal than ever. There’s been lots of promotion and these are heady times in the grain industry. There are many producers looking to make investments in new equipment. The problem is the weather and the stage of the crop. Most of the crops in the province are behind normal development. A lot of producers still have herbicide applications to do. Last week was wet so very little spraying was accomplished. This week the forecast is calling for sunny, warm weather. Unless the days turn windy, that’s likely to cut into attendance numbers. In previous years, some of the busiest days have been rainy and/or windy. The Farm Progress Show has survived all sorts of weather and all sorts of cropping conditions. It has also survived when the economics of the grain industry were absolutely terrible. This year, the show should be a tremendous success, but it may be tough to attract producers anxious to get their spraying done. I’m Kevin Hursh.
June 16, 2008
Ag extension may make a come back Extension is no longer a dirty word within Saskatchewan Agriculture. Speaking yesterday at the opening of the Saskatchewan Stock Growers annual convention in Saskatoon, Agriculture Minister Bob Bjornerud said extension services have been failing badly. He harkened back to the days when practically every farmer in the province knew their Ag Rep. These days most farmers would be hard pressed to name a single person in ag extension. Bjorneurd did not promise to go back to the days when we had over 40 Rural Service Centres in the province, each with at least an extension agrologist. But he did commit to improving what we have now so that farmers have more specialists to help them keep up with the changes in agriculture. Under the previous NDP government, Saskatchewan followed Alberta’s lead and went to a centralized call in system. People at the Agriculture Knowledge Centre in Moose Jaw do the best they can, but it’s not the same as having a network of people across the province who have the ability to visit farms and scout fields. There are indications that Alberta is becoming more interested in ag extension and it’s great to see Saskatchewan suggesting a move in that direction. I’m Kevin Hursh.
Drought assistance announced after the spring turns wet On Saturday in Swift Current, the federal government announced $9 million in financial assistance to farmers in southwestern Saskatchewan affected by years of drought. The money is being added to $6 million Saskatchewan Farm and Ranch Water Infrastructure Program. The federal funding is under the new disaster relief framework called AgriRecovery. The timing of the announcement is awkward. In the past month, southwestern Saskatchewan has received four to six inches of rain. Most of that has come in the past ten days. Since the first of April, the entire southwest is now well above normal springtime precipitation, with Swift Current to Maple Creek at over 150 per cent of normal. The Southwest is the wettest region of the province. While the federal reaction to the drought problem has been slow, the new federal / provincial program is still important despite the recent rain. It will cover emergency water supplies, permanent on-farm water supplies and the establishment of community wells for ranchers and farmers. Those remain on-going needs even with the rain this spring. The new program for the southwest should complement the Canada Saskatchewan Water Supply Expansion Program which is available in all areas. I’m Kevin Hursh.
June 12, 2008
Don't be a weasel A contract is a contract. With many new crop prices rising, grain buyers say there are a growing number of producers trying to weasel out of signed contracts. All grain buyers don’t always meet contract obligations either. It’s common for companies to run into a bind and not take deliveries as soon as promised or sometimes they are longer than they’re supposed to be in paying for grain. However, the majority of grain buyers do their best to honour contracts or they wouldn’t stay in business. On the other hand, there are an unfortunate number of producers just walking away from contracts. Some producers looked in new crop flax at $13 a bushel and it’s now $18. Some locked in large green lentils at 25 cents a pound and the price is now 38. That’s a huge amount of money, but it isn’t a justification for breaking a contract. Some producers rationalize by saying that the buyer is making a killing. In reality, the buyer usually has a commitment to an end-user based on the lower contract price. I have a new crop full production contract for high erucic acid rapeseed. When I signed the contract in the summer of 2007, it seemed like a great price. Today it’s several dollars a bushel below the market. But a contract is a contract. If the market had moved the other way, I would expect the company to still honour the agreement. I’m Kevin Hursh.
June 11, 2008
The rainfall lottery In rural Saskatchewan and in many urban areas, the first topic and sometimes the main topic of conversation these days is the rainfall – where it’s been falling, where it hasn’t and even where there’s too much all at once. For much of the southern grainbelt, there’s been a tremendous amount of rainfall this week. The numbers keep adding up so it’s difficult to know what the final tallies will be. In some areas, there has been a lot of rain in a short period of time and that can cause flooding and crop damage. Generally though, the rainfall has dramatically enhanced crop potential in many parts of the south. Some areas are hoping for more. In some other areas it would be nice to be able to save some of the rain until later in the summer, but of course you have to take it when you get it. What’s really unfortunate is that much of the central and northern grainbelt seems destined to miss this week’s major storm systems. There are reports in the northwest of alfalfa that’s only six inches high and flowering. Germination has been spotty especially on later seeded crops. Canola, being shallow seeded is particularly hard hit. You can have all the best management and planning, but success in agriculture is still highly dependent on the weather. I’m Kevin Hursh.
How much are Alberta livestock producers getting? The $300 million in direct payments being made to Alberta livestock producers will provide significant support. Now that more details are available, we know that the payments will total just over $52 per breeding cow, plus 12.8 cents per pound of gain on market animals. All this is based on 2006 inventory. Most producers won’t need to apply because the government already has all the numbers it needs. For a cow-calf producer with 100 cows who raises 95 calves and sells them at a weight of 600 pounds, it appears the payments will total over $12,000. The support will be even sweeter for many feedlots. Take a moderate-sized Alberta feedlot that buys 10,000 calves a year and adds 500 pounds of weight to each of those calves before selling them. As I calculate it, the support for that feedlot will be $640,000. You can do the math for feedlots that finish 20,000, 40,000 or 80,000 calves a year. Payments will also be significant for Alberta hog producers. The payment per sow or boar is $40.25 per animal. The payment per pound of gain on market animals is 10.1 cents. For a 600 sow farrow-to-finish operation marketing 23 pigs per sow in a year, the payments are likely to exceed $350,000. It’s clear that national agriculture policy in this country is failing miserably. I’m Kevin Hursh.
June 9, 2008
Western Sask. is the driest and the wettest in the province Saskatchewan crops are a mixed bag. Based on the crop report from Saskatchewan Agriculture, the crops in the most difficulty are in the northwestern grainbelt. This encompasses Lloydminster, Meadow Lake, North Battleford and east to almost Prince Albert. Much of that area has received some rain this spring, but there has been very little in the past couple weeks. Sask Ag says later seeded crops are showing poor germination. Topsoil moisture is rated as adequate on only 25 per cent of cropland. On hay and pasture land in the northwest, topsoil moistures is rated as only 22 per cent adequate. Crops in the northwest are also the least advanced in the province for everything except pulse crops. The next driest region is West Central with only 38 per cent of cropland and 18 per cent of hay and pasture land rated as adequate. Following last week’s rains, the best soil moisture ratings are in southwestern Saskatchewan. Reporters rate 83 per cent of cropland in the southwest as having adequate topsoil moisture, while hay and pasture are at 69 per cent adequate. This is a dramatic improvement in just a week. Hopefully other areas that need moisture will get it this week. After that, some warmth is needed to promote crop development. I’m Kevin Hursh.
June 8, 2008
Farmers have split personalities when it comes to CWB support The two sides in the barley marketing debate are drawing different conclusions from a big survey of producer opinions commissioned by the Canadian Wheat Board. The survey certainly shows that the views we express as farmers are often affected by the question being asked. When asked to choose between the Canadian Wheat Board single desk and an open market for barley, only 40 per cent picked the board with 52 percent opting for an open market. Fifty-nine per cent of producers surveyed agreed that getting rid of the single desk for barley would result in better returns for barley producers. In contrast, 73 per cent of barley growers in the survey said the new CashPlus program initiated by the board for malting barley meets the needs of producers very well or somewhat well. Here’s another contradiction. Seventy per cent of producers said the CWB is run by a board of directors, but 60 per cent said the federal government has more say than farmers over major decisions at the CWB. An overwhelming 77 per cent said farmer elected directors should determine the future of the CWB rather than the federal government. However, 50 per cent of farmers want their member of parliament to vote in favour of legislation eliminating the single desk for barley. Producer viewpoints seem to be all over the map when it comes to the Canadian Wheat Board. I’m Kevin Hursh.
June 5, 2008
Alberta takes steps to preserve its livestock industry Saskatchewan is now a “have” province, but Saskatchewan farmers and ranchers are still “have nots” as compared to their counterparts in Alberta. Yesterday, the Alberta government announced a $356 million support program for its cattle and hog producers. $300 million of that is going to producers as direct assistance. The first $150 million is to go out immediately. The second payment is scheduled for January of 2009 and it has strings attached. To get the second payment beef producers will have to comply with new mandatory age verification and premise identification requirements. For a politician, Agriculture Minister George Groeneveld is uncharacteristically frank about the need for change. Groeneveld says producers who are unable or unwilling to transform their business by meeting the new verification and identification conditions may need to consider ways to exit the industry. Beyond the direct payments, Alberta is making a $56 million investment to create a new Alberta Livestock and Meat Agency that will develop a new vision for the livestock industry. Alberta is taking bold action. Too bad the approach isn’t national in scope. I’m Kevin Hursh.
June 4, 2008
Solutions sought to the "food crisis" Food is in the news like never before and everyone has an answer to the “food crisis” based on their personal experience and their bias. Some economists point to market protectionism as part of the problem. They argue that an unfettered marketplace free from trade barriers is the best way to ensure adequate food production and distribution. For too long government subsidies in developed countries have spurred overproduction, resulting in low world prices that failed to encourage production in non-subsidized nations. Others argue that food exports facilitated by free trade agreements are the problem. Food should be produced locally, they say. Domestic food security should trump competitive advantage in food production. You can also find advocates for and against biotechnology and genetic modification. In affluent North America, we’ve been consuming genetically modified crops such as canola, corn and soybeans for more than a decade. Yet some impoverished countries fear the technology and would rather let their people starve than import GM crops. Just a couple years ago, the price of food was not an issue. There were starving people in the world, but food prices were not pegged as the reason. Welcome to the new reality where the world no longer takes its food supply for granted. I’m Kevin Hursh.
June 3, 2008
Alliance buys Pulse Depot Pulse and specialty crop processing continues to consolidate. Alliance Grain Traders Income Fund through its operating company Alliance Pulse Processing has a deal to buy Pulse Depot, located at Rosetown. Alliance already has the Saskcan Pulse plant in Regina, as well as the Agtech plant in Regina. It also owns the old Klemmer Seeds plant at Rosetown, the Horizon Seeds plant at Aberdeen, a plant in Australia and a plant in Williston, North Dakota. Murad Al-Katib is the president and CEO of Alliance Pulse Processors. He has engineered a company that is a dominant supplier of red and green lentils as well as other pulses and specialty crops. The Saskcan facility in Regina is the location for a red lentil splitting operation. Pulse Depot, the latest acquisition by Alliance, started out as Eagle Creek Processing, but ran into financial difficulties. It’s a plant with considerable capacity and will help solidify the Alliance market share as lentil acreage increases in Saskatchewan. I’m Kevin Hursh.
June 2, 2008
One strong voice for Saskatchewan's cattle industry The proposed Saskatchewan Cattlemen’s Association makes a great deal of sense. The existing cattle organizations in the province, the Saskatchewan Stock Growers Association and the Saskatchewan Cattle Feeders Association work hard on behalf of their members, but both organizations are under funded and over extended with a limited membership. There are more than 12,000 cattle producers in Saskatchewan while the membership in the Stock Growers and Cattle Feeders combined is only about 750. If the proposed Saskatchewan Cattlemen’s Association is established, the Stock Growers and Cattle Feeders can continue their activities. In fact, they’ll have two board members each on the new organization. However, every cattle producer will have a vote in electing the rest of the board of the Saskatchewan Cattlemen’s Association. Plus the association will be fully responsible for the $1 per head provincial share of the cattle check-off – a check-off that is refundable for producers who chose not to participate. Some people say that cow-calf producers and feedlot operators have different viewpoints. In reality, they agree on most issues and feedlot operators are often cow-calf producers as well. There’s a lot to be gained by having one strong, representative voice speak for the entire cattle industry of the province. I’m Kevin Hursh.
June 1, 2008
Ducks versus calves It’s amazing what captures mainstream news coverage and what captures little or no coverage at all. In late April, the spring snowstorm that hit Alberta and the western side of Saskatchewan was tough on many cattle producers who were in the midst of calving. Hundreds and probably thousands of young calves died as a result of that storm. Media reports at the time made little or no mention of the losses. However, the media spent a lot of time focusing on 500 ducks that died after landing in an oilfield tailings pond near Fort McMurray. Day after day, ranchers in Alberta watched the news coverage on those ducks and wondered why scores of frozen calves and the economic losses to ranchers wasn’t worthy of some news coverage. Of course, the duck story had controversy. People love to hate big, bad oil companies. As well, the calving losses were spread over a wide geographic area. Much easier for the media to shoot pictures of oily ducks in a pond. News coverage is governed by many factors. Remember that the mainstream media is often a very imperfect mirror of what’s actually happening. I’m Kevin Hursh.
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Kevin Hursh's daily agricultural report is heard Monday through Friday on Swift Current (CKSW), Shaunavon (CJSN), Moose Jaw (CHAB), Estevan (CJSL), Weyburn (CFSL), Rosetown/Kindersley (1330/1210), Lloydminster (CKSA) and Melfort (CJVR).
