Worry growing over feed supplies The annual meeting of the Saskatchewan Stock Growers Association is underway in Moose Jaw. You wouldn’t know it by conditions around Moose Jaw, but moisture has become a big concern for the cattle industry. Here in the Moose Jaw region, like everywhere else, hay and pasture growth has been slow due to the cold spring. However, everything here has greened up nicely with the recent heat because moisture conditions are good. Just north of Moose Jaw, producers are going around wet spots in fields as they finish up seeding operations. Conditions are far different on the western side of Saskatchewan and into Alberta. For a change, the deep southwest corner of the province isn’t the hardest hit. The driest conditions are in the west central region. There are already reports of producers culling their cow herds because they won’t have enough feed. Last year’s provincial hay crop was not large and it was a long, cold winter. The carryover of hay is low. Now, a large chunk of the province is facing poor pastures and a hay crop failure. Hay prices are likely to rise and the cost of moving hay into the dry regions will be onerous. I’m Kevin Hursh.
May 28, 2009
Compelled to store durum There’s a longstanding debate over whether or not the Canadian Wheat Board extracts a premium for the wheat, durum and barley it sells into world markets. Beyond the price question, another issue that irks a lot of growers is when the CWB doesn’t take all the production offered. That is happening again this year with durum. The Western Canadian Wheat Growers Association has issued a news release pointing out that only 74 per cent of the durum tonnage offered by growers has been accepted in the current crop year. Farmers were purchasing crop inputs for the 2008 crop in the fall of 2007. Now they have to wait until December of 2010 to receive full payment for that crop. Carried over durum will also create storage issues as the new crop is harvested. The Wheat Growers say the decision on whether or not to hold inventory should be left in the hands of farmers. They shouldn’t be compelled to hold over grain. As the world’s biggest durum exporter, the CWB is probably trying to support price levels by not pushing all the durum offered into the marketplace. There should be a way to achieve that goal while still giving individual producers the ability to make their own decisions on how much of their crop to market. Even at a discounted price, some producers would still opt to deliver more than 74 per cent of their durum. I’m Kevin Hursh.
Consumption increasing for poultry, yogurt and wine Canadians are now eating more poultry per capita than beef. Statistics Canada has released new data on the foods we consume. In 2008, the consumption of chicken and turkey increased to 13.6 kilograms per person. By comparison, beef and veal consumption dropped down to 12.8 kilograms. Pork consumption was 9.7 kilograms per person. Milk consumption continued the downward pattern that began at the end of the 80s. Canadians drank 57.7 litres of milk per person, down from 70 litres back in 1988. However, Canadians had 5.4 litres of yogurt in their diet in 2008, more than twice as much as a decade ago. In addition to poultry and yogurt, consumption is increasing for tea, breakfast cereals, berries (particularly blueberries and cranberries), processed fruits, asparagus and wine. Canadians aged 15 and over drank 15 litres of wine per person last year, five times more than in the early 60s. Statistics Canada says the total daily intake per person fell to 2,382 calories last year, a decline of 131 calories since the peak recorded in 2001. Health concerns, age demographics, convenience and food trends all play a role in what people consume and this has a profound impact on agriculture. I’m Kevin Hursh.
May 26, 2009
Agriculture: Re-emerging giant There was a time when agriculture dominated the provincial economy. These days the value of agricultural production is about the same as the value of mining. Total farm cash receipts, the money from selling grain and livestock as well as money received from government programs, totaled a record $9.4 billion in 2008. The Saskatchewan mining industry also had a record year in ‘08, particularly for potash, resulting in total production valued at $9.7 billion. The stats for 2009 are likely to see a setback. Many grain prices are not as buoyant as last year and most of the western half of Saskatchewan is facing the threat of drought. In the mining industry, lower sales numbers are also being projected, so it isn’t only agriculture that’s cyclical. Over the medium term, watch for agriculture to be a re-emerging giant in the provincial economy. Growing economies in China and India point to an ever-increasing demand for food from customers that have the money to pay for it. As the world economy comes out of recession, and as oil prices rise, expect to see renewed strength in grains. If the stars align as it appears they might, the province could see an agricultural renaissance. I’m Kevin Hursh.
May 25, 2009
Record farm income in Saskatchewan The latest farm income numbers from Statistics Canada show that 2008 was an amazing year for Saskatchewan grain farmers. Saskatchewan’s total farm receipts were somewhat lower than Ontario and Alberta, but our realized net farm income was the highest by far. Realized net income takes all expenses including depreciation into account. For 2008, Saskatchewan’s realized net farm income topped $1.5 billion – the largest ever, at least in nominal terms. Alberta, where livestock is much more important, had a realized net farm income of $452 million. Back in 1973, Saskatchewan topped $1.1 billion and the following year was nearly $1.4 billion. There was another big year in 1981 when realized net farm income again topped a billion dollars. If you account for inflation, those years would be bigger. However, 2008 is very impressive when you consider there was a $1.8 billion increase in the value of inventory at the end of the year. This largely represents the value of carried over grain. When you add that to the realized net income, the total net income reaches $3.45 billion. Of course, you don’t have to go back many years to find dismal farm income numbers. Realized net farm income in the province was negative $124 million back in 2003. I’m Kevin Hursh.
Going bilateral Canada seems to be having success with bilateral trade deals and agriculture is one of the main beneficiaries. Agriculture minister Gerry Ritz has done a great deal of international travel in recent months and every trip seems to bring a new trade announcement. The most recent Canadian delegation was in Colombia and Peru. Canada has negotiated bilateral trade agreements with both countries, but the agreements haven’t been finalized by Parliament. Once implemented, the deals will reduce import tariffs on Canadian wheat, malting barley and pulse crops. The Canadian visit brought news that Colombia will open its borders to Canadian beef – the first South American market to restore market access since the BSE outbreak back in 2003. The Canada-Colombia free trade agreement will allow a lot of Canadian beef to move duty free and the onerous tariff will be gradually eliminated. Back in April, Gerry Ritz led a Canadian delegation to the North African country of Morocco to kick off negotiations on a free trade deal. With world trade talks hopelessly stalled, bilateral deals have become critical. For the Canadian government, they provide the opportunity to maintain protection for the supply managed industries – something a world trade deal would probably not afford. I’m Kevin Hursh.
May 21, 2009
Impending drought Moisture conditions will soon become a big issue on the western side of Saskatchewan. The latest crop report from the Ministry of Agriculture shows topsoil moisture on cropland is short from North Battleford to Swift Current and west to Alberta. Two spots are mapped as very short – an area from Leader to Eatonia and another from Kindersley to Dodsland. The cool spring has masked some of the moisture shortage. The precipitation maps published by Agriculture and Agri-Food Canada paint a more disturbing picture. Since April 1, most of west central Saskatchewan – everything west of a line from Saskatoon to Elbow has had less than 40 per cent of normal precipitation. The balance of the western side of the province has had between 40 and 60 per cent of normal precip. Most western regions came into the spring with poor to fair subsoil moisture, so there isn’t much reserve to draw upon. As temperatures increase to more normal readings and as the crop starts growing, precipitation will soon become critical. The lack of moisture is already doing irreparable harm to hay and pasture production. I’m Kevin Hursh.
May 20, 2009
Curtailing captive supply Republican and Democratic Senators from several cattle-producing states have introduced a bill to curtail captive supply in American cattle markets. Here in Canada, the National Farmers Union is calling for us to follow the American lead. The NFU has long said that the ability of beef packing companies to own cattle and control cattle through contracts is leading to lower prices for producers. The proposed American bill would prevent packers from using non-priced contracts as a tool to depress prices. Forward contracts would have to be traded in public markets. The bill does not ban packer ownership of cattle, although the NFU says that additional step is likely to come later. The bill exempts producer owned cooperatives, packers with low volumes and packers who own only one processing plant. Two companies have the vast majority of Canadian beef slaughter capacity. Competition is limited. The Canadian Cattlemen’s Association has not identified captive supply as a problem. However, if the Americans move on this issue it would seem prudent to carefully examine what might be done on this side of the border. I’m Kevin Hursh.
May 19, 2009
Viterra inks blockbuster deal For some time, Vitera has made it no secret that it is in an acquisition mode. At $1.4 billion in cash and shares, the Viterra deal to buy ABB Grain of Australia is a mega-acquisition. Mayo Schmidt has had an amazing track record as head of the company that used to be Saskatchewan Wheat Pool. With steely resolve he brought the company back from the brink of bankruptcy and then masterminded the takeover of Agricore United. Schmidt’s much vilified predecessor Don Loewen is widely blamed for dragging the Pool into financial difficulty due to aggressive expansion and too many acquisitions. Operations in Poland and Mexico were particularly big money losers. Most observers assume Schmidt knows what he’s doing and that this blockbuster Australian deal must be a good business move. The same assumptions were made back in Loewen’s time. The timing may be better with the current acquisition. The outlook is bullish for the grain sector worldwide. Loewen tried to accomplish expansion during a time of meagre returns in the grain industry. I’m Kevin Hursh.
May 18, 2009
Slow start to growing season The warm weather that is forecast for the end of the week will be welcome. It isn’t uncommon to get snowstorms well into May, but this year has seen a lot of unseasonably cold weather. Last week’s crop report put Saskatchewan seeding progress at 23 per cent which is right on the five-year average. However, snowfall late in the week delayed seeding progress in many areas. There are producers on the eastern side of the province who haven’t turned a wheel yet. On the western side of the province, there has been substantial seeding progress, but early-seeded crops have been slow to emerge. Even weed growth is very slow. With the dry conditions in many western regions, it can be argued that the cool temperatures have helped preserve moisture. But crop development is certainly lagging. If the weather turns around, this cool spring may end up being inconsequential. If we get more days with freezing temperatures and more snowstorms, the slow start may end up problematic. I’m Kevin Hursh.
May 14, 2009
Where is technology taking us? Most of the acres in Western Canada are now seeded and sprayed using GPS guidance and auto steering systems. This revolution has come about in just a few short years. I know farmers who are so confident in their auto steering systems that they catch up with their reading on the tractor while seeding. Some even catch catnaps from one end of the field to another. To make sure they don’t sleep through the end of the field, they set a timer to wake them up in time to turn the outfit around for the next pass. It makes one wonder what the next technological revolution will bring. The operator is becoming less important. Will field work eventually be conducted by robot tractors monitored remotely? Rider-less tractors seem far fetched at this point, but it wasn’t long ago that auto steering seemed like science fiction. Now it is affordable for a majority of producers. Technological changes are coming more rapidly with each passing year. I’m Kevin Hursh.
Research funding doesn't compensate for years of neglect Agriculture and Agri-Food Canada has made recent funding announcements aimed at enhancing public research at the Semiarid Prairie Agricultural Research Station in Swift Current, the Crops and Livestock Research Centre in Charlottetown and the Cereal Research Centre in Morden, Manitoba. SPARC in Swift Current is receiving $5 million over two years to modernize aging greenhouse facilities. Charlottetown is getting $5.4 million, while $250,000 has been announced for Morden. On behalf of producers, the Grain Growers of Canada has issued a news release saying it is encouraged by these funding announcements. You don’t often get this kind of rosey picture when you talk to individuals knowledgeable about federal ag research. They say career bureaucrats are in charge of Agriculture and Agri-Food Canada these days, rather than people who understand and care about agriculture. There’s long been a move away from basic research into projects aimed at providing a quick return on investment. Morale among researchers is said to be low. They face more paperwork while core funding is increasingly difficult to obtain. The infrastructure spending is a positive development, but it doesn’t address the many years of neglect and decay. I’m Kevin Hursh.
May 12, 2009
High oleic soybeans coming High oleic canola has been produced in Western Canada for a number of years. It will soon be competing with high oleic soybeans. High oleic oils eliminate the need for hydrogenation resulting in foods with negligible amounts of trans fats. High oleic canola varieties account for a significant percentage of the canola grown on the Prairies. Now, Pioneer Hi-Bred, a DuPont business, has announced that its high oleic soybean trait has been approved by Health Canada and the Canadian Food Inspection Agency. Canada and Mexico are the first countries to complete regulatory reviews. The U.S. Food and Drug Administration completed its review of high oleic soybeans earlier this year, but the U.S. Department of Agriculture is still in the process of reviewing the trait. Pioneer says varieties with the trait will be field tested in the U.S. and Canada this growing season with potential Canadian registration of the first products in 2010. There’s only a limited acreage of soybeans in Saskatchewan, but there are quite a few acres in Manitoba and lots in Ontario. Of course, soybeans are huge in the U.S. Across North America they’re grown on more acres than any other oilseed crop. Development work will need to continue with canola so that it can continue to stay ahead of this major competitor. I’m Kevin Hursh.
Safety recommendations need to be practical It’s the time of year when farm accidents are more likely to occur. There have already been some tragic cases this spring. Naturally, this is also this time of year when a number of organization ramp up their farm safety messages through various media. I’m all for farm safety campaigns, but some safety advice is impractical. For instance, official recommendations would have you wear your seatbelt in the tractor at all times. Unless you’re farming very hilly terrain, that makes no sense whatsoever. I don’t know of anyone who straps up during normal seeding operations. In fact, doing so would just add to fatigue and irritation. Another pet peeve is in regard to the precautions on crop protection products. Some products are nasty and deserve great care when handling. Unfortunately, all the products tend to get lumped together and some of the safety recommendations on the label are often overboard. Maybe this protects the manufacturer, but it does little to enlighten the user. All of us have safety practices that could be improved. Most everyone is guilty of pushing too hard and not getting enough rest in the busy seasons. However, safety recommendations that are realistic are much more likely to actually be heeded. I’m Kevin Hursh.
May 10, 2009
Impressed with an ancient Versatile I’ve always heard the owners of old Versatile tractors talk glowingly about these workhorses. This spring, I’ve been running an old, old Versatile on the air drill and I too have become a fan. Versatile 835, 855 and 875 tractors are about 30 years old, but there are still lots of them in operation. To get extra hydraulic capacity to run the fan on an air drill, many have been retrofitted with a separate hydraulic system. Shopping around this spring, you could find these models of Versatile with hours ranging from four or five thousand all the way to ten thousand. I bought my tractor at an auction sale and then spent about half the purchase price in repairs. For a no-frills tractor, the cab is reasonably quiet, the radio can reach more stations than newer tractors, the engine has an impressive amount of torque, and it seems to be reasonably economical on fuel. Of course, it’s old and worn and has some quirks, but it also has some really neat features. There’s an extra fuel gauge right by the filler cap and the decelerator pedal is really handy for slowing down as you turn on the headlands. I’ve had auto steer installed in the old girl and it is a little strange to see a high tech system in such an ancient tractor. I’m Kevin Hursh.
May 8, 2009
Subsoil moisture map In general terms, the eastern side of Saskatchewan has good to very good subsoil moisture, while the western side of the province is rated as fair to poor. The Saskatchewan Ministry of Agriculture has just published its stubble subsoil moisture map based on conditions as of May 1. The northern grainbelt doesn’t entirely follow the east/west delineation. Fair moisture conditions extend east all the way past Prince Albert to around Melfort. In the central and southern grain belt, almost everything east of a line from Saskatoon to Moose Jaw has very good subsoil moisture. That is defined as more than four inches of available soil water. On the western side of the province, there are a few pockets with better moisture such as right around Swift Current, but fair conditions are dominant. Fair means two to 2.9 inches of available soil water. The driest area runs from south of Lloydminster to south of Kindersley. This area is characterized by the poor rating, which means one to 1.9 inches of available water. Thankfully the map doesn’t have any areas rated as very poor. Beyond subsoil moisture, many of the dry areas have concerns about surface moisture for crop germination. The map can be seen on the Ministry’s website. I’m Kevin Hursh.
May 6, 2009
Beans but no pork During the BSE crisis, Canadians rallied around the beef industry. Domestic beef consumption actually increased – something that had never happened in a country reporting BSE. There are attempts to mobilize a similar rally in support of the pork industry. Federal agriculture minister Gerry Ritz hosted a pork luncheon together with the Canadian Pork Council yesterday on Parliament Hill. In Manitoba, Keystone Agricultural Producers is urging the public to support pork producers by buying Canadian products and increasing their pork consumption. The H1N1 flu virus is not a food safety issue. You can’t get the flu by eating pork. The message is not getting through to everyone. Last night I attended a catered banquet where the caterer made a point of not putting pork in his baked beans. He wanted everyone to know that he always served beans and pork, but had removed the pork in light on the current circumstances. Hopefully, this kind of misguided response is an isolated case. The pork industry deserves our support just like the beef industry did a few years ago. I’m Kevin Hursh.
May 5, 2009
Obama endorsement of biofuels There has been a great deal of speculation about the direction of American biofuels policy. Some observers have suggested that the U.S. would likely back away from its mandates for ethanol and biodiesel production. Yesterday, U.S. President Obama gave a clear endorsement for biofuels. He issued a presidential directive to his Agriculture Secretary Tom Vilsack to aggressively accelerate the investment in and production of biofuels. Obama and Vilsack see this as a way to spur rural economic development while reducing U.S. dependence on foreign oil. With the downturn in world oil prices, many U.S. ethanol plants have been struggling financially. The Obama / Vilsack plan will include refinancing of existing investments in renewable fuels to preserve jobs. There will also be loan guarantees for the development of commercial scale facilities. Ethanol production has become a huge market for American corn. It appears that market will continue to grow under the Obama administration. This is good news for grain producers around the world. I’m Kevin Hursh.
May 4, 2009
From dry to wet The dry conditions are becoming worrisome on the west side of the province. Maps are available from Agriculture and Agri-Food Canada showing precipitation over the past month. West of a line from Prince Albert through Saskatoon and Swift Current, precipitation over the past month has generally been less than half an inch. The Rosetown to Kindersley region has been particularly dry with just a trace of moisture. West Central Saskatchewan is a big producer of lentils and canaryseed so markets may start to react to the dry condition. Meanwhile, there are areas of the province that have received a lot of moisture and producers there are hoping for warm, dry weather so they can proceed with seeding. The heaviest precip over the past month is in an area that includes Hudson Bay, Yorkton, Wynyard, Davidson, Moose Jaw, Gravelbourg and Coronach. This area has received an inch and a half to two and a half inches. Producers on the west side of the province are hoping for that sort of precip in the near future. I’m Kevin Hursh.
May 3, 2009
H1N1 causes more pain for hog producers The pork industry can’t win. Producers have faced years of losses – the most prolonged period of unprofitability in history. Prices were finally turning around when swine flu hit the news. World authorities eventually agreed to call the virus H1N1, but now a hog operation in Alberta has pigs with the flu. Despite all the assurances that the flu is not a food safety issue and that pork is safe to consume, some countries are erecting trade barriers. China has banned Alberta pork. Consumers are no doubt confused with the massive media attention that H1N1 is receiving. Rather than a much needed summer price rally, hog prices have slipping back into negative territory. We’ve lost a lot of producers and a big chunk of the breeding stock over the past few years. H1N1 could cause further casualties. Even the biggest and best producers can’t withstand losses indefinitely. Lending institutions eventually lose their patience. Here’s hoping H1N1 quickly fades from worldwide headlines. I’m Kevin Hursh.
May 1, 2009
Bright outlook for canola Using the seeding intentions from Statistics Canada and assuming average yields, Agriculture and Agri-Food Canada has come out with new supply and demand estimates for all the major grains, oilseeds, pulse and special crops. From that, the average price levels for the upcoming crop year have been predicted. Prices are forecast to be lower on wheat, durum, malting barley, off-board barley, field peas, lentils and mustard. On a few crops, the prediction is calling for about the same price in the upcoming crop year. This includes oats, flax, chickpeas and canaryseed. The only crops forecast to have a higher average price are corn and canola. Ag Canada notes that seeding intentions are 7 per cent lower on canola. Due to the expectation that yields will drop back to closer to normal, total Canadian production is projected to fall by 20 per cent as compared to the record 2008 canola crop. At 10.2 million tonnes, this would still be the second largest crop in history. Meanwhile, domestic crush is expected to be way up due to new crushing plants coming on line. As well, exports are forecast to remain historically large. As a result, carry-out stocks of canola are forecast to drop sharply. The Ag Canada analysis calls for prices to increase by about 5 per cent - the result of higher premiums for canola oil and tight supply. I’m Kevin Hursh
Archives
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).
