Progress on a Canada - EU trade deal Multi-lateral trade talks through the WTO appear to be going nowhere, but progress on a bilateral deal between Canada and the European Union has so far exceeded expectations. The chief trade negotiator for Canada is Steve Verheul. He points out that the EU is Canada’s second largest trading partner and they’re the biggest, wealthiest market in the world. If we can negotiate a deal, Canada would have preferential access over all other developed nations. Verheul calls it the most significant negotiation since NAFTA. Both sides seem to want a big deal or no deal. Negotiations started in May and the aim is to have a deal within two years. For Canadian agriculture, a deal should mean improved access for pork, beef, grains, oilseeds and specialty crops. Hormone and GMO issues have often hindered access. For its part, the EU is interested in better access to the Canadian market for wine, processed food and cheese. The Canadian dairy sector would no doubt rail against more imported cheese so this could be a difficult issue within Canada. The negotiation between Canada and the EU has been under the radar, receiving very little public attention and debate, but it’s showing a lot more life than the WTO. I’m Kevin Hursh.
Motion tabled to deal with competitive imbalance There have long been complaints about how farmers in other countries, most notably the United States, have access to commercial products not allowed in Canada. Some of those disallowed products are used on food commodities that are imported into Canada. Ontario M.P. Bev Shipley who represents the constituency of Lambton-Kent-Middlesex has tabled a motion in the House of Commons to deal with this issue. Shipley is requesting that Canada consider using the equivalent scientific research and agricultural regulatory approval processes of other trading nations, provided the results are consistent with Canadian standards. He points out that there isn’t any need to reinvent the wheel every time a new product comes on the market. The duplication of testing results in extra costs and delays. Sometimes the Canadian market isn’t large enough to justify the testing and the product isn’t registered in Canada. There have been many government promises over the years to deal with this inequity. Shipley’s motion is set to receive its first hour of debate in the New Year. While well-intentioned, I fear that it won’t be enough to change our entrenched regulatory procedures. I’m Kevin Hursh.
November 26, 2009
Better PRO news The price slide in Canadian Wheat Board grains has halted in the latest Pool Return Outlook. In fact, wheat values are up by $1 to $10 a tonne and feed barley values are up by $7 a tonne. Durum and malting barley are unchanged from last month. No. 1 spring wheat with 14.5 per cent protein is up by $8 a tonne, while No. 1 with 13.5 protein is up by $4 a tonne. Wheat with 12.5 protein is up only $3, so the protein spreads have increased. The average Saskatchewan price of 12.5 wheat is expected to be $4.78 a bushel. Spring wheat with 13.5 protein is pegged at $5.19 a bushel – a protein premium of 41 cents. The expected price of wheat with 14.5 per cent protein is 5.79 a bushel, which is 60 cents a bushel for that one per cent of protein. In comparison, the protein premiums in durum are much smaller. The PRO on No. 1 durum with 13 per cent protein is $4.40 a bushel. No. 1 durum with 14.5 per cent protein is only $4.70 a bushel. That’s only 30 cents for 1.5 per cent protein. The $7 a tonne increase in feed barley is not going to be enough to attract much into the export market. The PRO is only $1.87 a bushel. Even though the domestic feed barley price has dropped, it’s still a lot higher than the PRO. I’m Kevin Hursh.
November 25, 2009
Grain transportation has been better, but will that last? A potential strike is looming at CN Rail and if that happens, grain transportation will be back in the news. Over the past year, grain transportation has not been in the public eye much because rail service has actually been better than usual. Mark Hemmes of Quorum Corporation manages the activities related to the federal government’s Grain Monitoring Program. Speaking to a Grain Symposium in Ottawa yesterday, Hemmes said grain transportation was better in ’08-’09 than it’s ever been. Unfortunately, that isn’t saying much. Grain delivery points have dropped from 700 a decade ago to just 276. And there are one-third fewer train starts because there are more cars being hauled per train. Despite these dramatic system changes, railway performance is only marginally better. And while the average car cycle time is down a bit, there are still big problems with reliability. Hemmes says the main reason for the improvement over the past year is that “grain is the pretty girl at the dance.” In other words, the movement of other major commodities has been down dramatically, so the railways have been able to concentrate on grain. Guess what’s likely to happen to grain movement efficiency as the economy improves. I’m Kevin Hursh.
Ottawa has dithered on carbon trading Canada doesn’t have a national climate change strategy and whether or not you believe in the climate change theories, the lack of a strategy is going to be bad for Canadian farmers. A Grain Industry Symposium is underway in Ottawa and one of the sessions yesterday dealt with the climate change issue. Speakers pointed out that the U.S. is working on a Climate Change Bill that will establish a cap and trade system for carbon credits. The Americans are likely to establish trade barriers against countries that don’t have a plan for reducing emissions and at this point we don’t have a national plan. With the failure of Ottawa to act, Alberta has developed its own carbon trading plan. Farmers in that province are receiving payments for practices such as minimum tillage and planting forage crops. Saskatchewan has been studying the Alberta initiatives. Don McCabe, an Ontario grain and oilseed producer who serves as president of the Soil Conservation Council of Canada had a blunt assessment on the lack of national action. McCabe says Canada used to have a leadership position in getting carbon sinks recognized as a way to cut carbon emissions, but Ottawa has done nothing on this file for many years. While carbon credits will never be a major income source for farmers, every little bit helps. And if we aren’t diligent, climate change policy is going to increase our input costs, while cutting access to some international markets. I’m Kevin Hursh.
November 23, 2009
Grab a pitchfork Agriculture has changed dramatically over the years, but showing purebred cattle is the same hard work it’s always been. When Canadian Western Agribition got rolling back in the 70s, the work for purebred cattle exhibitors was much the same as it is now. Pitchforks, small square bales, blow driers, wash racks, everything done by hand. Cattle identification has been modernized, but otherwise the barns at Agribition operate much the same as they did 30 to 40 years ago. Some of the cattle breeds have changed over the years. In many cases, the breeds are less distinctive. For instance, you used to be able to pick out a Simmental with ease, but now you need a sharper eye. There are fewer cattle producers in Western Canada and the economics are tough for commercial cattle producers. However, Agribition’s purebred cattle numbers remain amazingly strong. Breeders may have cut out other livestock shows to save money, but Agribition is considered a necessary part of the marketing effort for a large number of producers, even though it involves long hours and a great deal of manual labour. I’m Kevin Hursh.
November 22, 2009
Fill out your SPG ballot There are many organizations to which farmers pay levy dollars, but elections are relatively rare. The directors for commissions and boards are often acclaimed. This year, there is an election underway. Five candidates are running for three positions with Saskatchewan Pulse Growers. As pulse producers, we should have all received biographical information and a ballot in the mail. The five candidates are Donald Beskorwayne, who operates a mixed farm northeast of Prince Albert; Vicki Dutton, a producer from Payton who is also involved with the processing company Western Grain; Roger Elchuk, a producer from the Shipman area; Dan Flynn, a producer from near Beechy; and Murray Purcell, a producer from Pike Lake who is completing a three year term as a director. Sask Pulse Growers has played a major role in the development of peas and lentils in this province. Each year, the organization collects millions of dollars in levies from the sale of pulse crops and that money is used for research, market development and communications. It only takes a few minutes to read through the biographies and mark your choices. Ballots must be received by the Returning Officer by December 2. I’m Kevin Hursh.
November 19, 2009
Comparing with the Aussies Australian grain farmer Ross Johns was a speaker in Saskatoon on Wednesday night at an event sponsored by the Farm Leadership Council, APAS and the Canadian Association of Farm Advisors. While Australian grain production is similar to Canadian production in many ways, there are also amazing differences. In Western Canada, we have a huge amount of on-farm grain storage. In Australia, most of the grain storage exists at a score of ocean ports. Grain is typically trucked directly to the ports at harvest time. According to Ross Johns, the Aussie grain industry is pinning its hopes on genetically modified crops to provide the next big production boost. Australia has been a late adopter of GM crops and some states are still rejecting the technology. Johns was asked about farmland prices down under and why their land seems to be increasing in value more quickly than land here. Johns says farmland that’s marginal for moisture is not increasing in value, but other land certainly is. His own land, north of Melbourne is valued at about $800 an acre, with land in better locations as high as $5,000 an acre. According to Johns, it’s an Aussie rule of thumb that farmland doubles in value every ten years. I’m Kevin Hursh
November 18, 2009
Pork producers need to take control of their industry The hog industry did some major soul searching at the 32nd annual Pork Industry Symposium held the past couple days in Saskatoon. Presenters had a long list of the things wrong with the Canadian industry and an equally long list of proposed solutions. Laurent Pellerin, President of the Canadian Federation of Agriculture and a hog producer from Quebec had just returned from a symposium on food security held by the United Nation’s Food and Agriculture Organization in Rome. While the FAO is worried about feeding nine billion people in the world by 2050, Canada’s hog industry is in decline and Pellerin pointed out the irony of our producers being paid to exit the business. Jurgen Preugschas, Chair of the Canadian Pork Council and an Alberta hog producer told the symposium that we need to create and execute a differentiation strategy. He believes we can’t compete on a commodity basis with the U.S. given the high value of the Canadian dollar. That was a solution echoed by many presenters. Hog price are actually profitable in countries outside of North America. Within Canada, pork consumption is dropping and more than 20 per cent of the pork consumed is coming in from the U.S. I’m Kevin Hursh.
November 17, 2009
No pity for coyotes The new $20 provincial bounty on coyotes has drawn some adverse reaction, but it isn’t contentious for people who are living with the explosion in the coyote population. Coyotes are all over the place. Farm cats have become an endangered species on some farms because the coyotes pick them off. The farm dog isn’t safe either. In the daylight, coyotes usually keep their distance from humans, although I’ve seen a few mangy specimens that had no fear. Like most people, I was surprised by the reports of a 19 year old woman killed this fall in Cape Breton by a pair of coyotes. For livestock owners, there’s no doubt that coyotes are deadly. Predation by coyotes is the number one reason why sheep production is not increasing in this province. Some say the coyote population is nature’s way to counterbalance the gopher population. Well, there are lots of areas where the gopher population hasn’t changed much and there are still a disconcerting number of coyotes. The $20 bounty won’t solve the problem, but it will provide a bit more incentive to hunters and trappers in the wake of depressed fur prices. More than anything, it’s a sign the government recognizes that there’s a coyote problem. I’m Kevin Hursh.
November 16, 2009
Crown Land Sale Program extended Ranchers and farmers who are leasing crown land will get another year to buy the land at a 10 per cent discount. The 10 per cent discount was set to drop to 8 per cent at the end of 2009. The provincial government has now extended that to the end of 2010. For sales in 2011, an eight per cent discount will apply. For 2012, the discount will be six per cent and so on. The price tag for leased land is based on a land value report by the Ministry and/or an accredited appraisal. There are approximately seven million acres of agricultural crown lands in Saskatchewan. An estimated 1.5 million acres are eligible for sale. The program has been running a year and while there has been a lot of tire kicking, there has only been 110,000 acres sold to lessees. Ranchers and their organizations have asked for a program extension and the province has obliged. It’s too bad the cow-calf business is facing such poor returns. There are no doubt a lot of producers who would like to own some or all of their leased land. I’m Kevin Hursh.
November 15, 2009
A free trucking forum for purebred cattle Here’s a great idea for saving money on the movement of purebred cattle. Helge and Candace By of By Livestock in Regina have started a website called Cowpool.ca. The name is a take-off on car pooling. You often see a cattle trailer hauling only half a load or you see it running down the highway empty because it doesn’t have a backhaul. With Cowpool.ca, producers can go on the site and read about opportunities to cooperate on cattle movement and they can enter their own cattle movement information. Helge says there are still many female sales this fall where the site may come in handy, but the service should be especially useful during the busy bull sale season in the spring. He’s hopeful the site will encourage transportation efficiency and save producers a few dollars. Right now, there’s only one posting on the site. A couple of bulls are being moved from Whitewood, Saskatchewan to Alta Genetics in Alberta and the producer doesn’t have a backhaul. Of course, the more postings there are on the site, the more likely it will be useful. When you have purebred cattle to move, check out Cowpool.ca. I’m Kevin Hursh.
November 12, 2009
SCA election results The results have been announced for the first election of the Saskatchewan Cattlemen’s Association. Most are familiar names. Jack Hextall, who had been serving as chair of the organization has won the election in the southeast corner of the province. Bill Jameson was elected for the district which includes Regina / Moose Jaw. Ryan Thompson beat out three other candidates to represent south central Saskatchewan. Rick Toney was acclaimed in the southwest corner. Duane Thompson was victorious in the east central district. In the district that includes Saskatoon, Howard Toews was victorious, beating out Bob Blacklock and Brian Longworth. Leon Stang was acclaimed in west central Saskatchewan. Bruce Holmquist won in the northeast. Lyal Fox took the district that runs from Prince Albert to North Battleford and David Stuart was acclaimed in the northwest corner. The Saskatchewan Cattlemen’s Association has also hired a well-qualified cattle producer named Keith Robertson to serve as executive director. With access to check-off funds pending, there should be a lot this new association can accomplish for cattle producers. I’m Kevin Hursh.
November 11, 2009
Even the biggest and best hog farms in trouble Big Sky Farms is seeking creditor protection. Big Sky is the province’s largest pork producer with about 40 units in Saskatchewan as well as Manitoba and a workforce of about 400 people. Due to its size and the Saskatchewan government’s equity in the operation, Big Sky has always attracted more than its fair share of public attention. For some, it epitomizes big, bad hog farms and they’ll be glad to see the company in financial difficulty. However, Big Sky has always been well-managed and efficient and it’s always been a company with a social conscience. Here’s hoping Big Sky can restructure and survive. There is a long list of big and small hog operations that have struggled under the continuing losses of the past three years. Across the nation, the hog industry is in trouble, but Saskatchewan has seen a steeper decline in hog numbers than any other province. Without a major hog processing plant, producers in this province face high trucking costs to get their hogs to market. If an operation like Big Sky can’t make the economics work, there won’t be many who can. I’m Kevin Hursh.
November 9, 2009
Lentil returns are sweet Most of the market analysts have been wrong about lentil prices… again. During the early stages of harvest, analysts were correctly pointing out that lentil yields were better than expected. Lentils prices dropped after most of the crop was in the bin, but in recent weeks prices have again defied predictions and have steadily increased. Both large green lentils and red lentils are now being quoted at prices over 30 cents a pound. In fact, there are quotes as high as 32 and 33 cents as pound. The average yield for lentils across the province is about 1350 pounds an acre, but there were also instances of yields of 2500 pounds and better. I talked to one producer with exceptional yields who had marketed the crop at upwards of 40 cents. His gross return was in the $1,200 an acre range. While that return is rare, lots of producers will gross more than $400 an acre. When you compare lentils with yellow peas at only $5 or $6 a bushel, you have to think next year will see a continuing shift from peas to lentils in the regions of the province where lentils are a viable cropping option. I’m Kevin Hursh.
November 8, 2009
Ritz needs his canola facts straight A front page story in the November 5 edition of the Manitoba Cooperator newspaper doesn’t cast a flattering light on our federal agriculture minister. The story is by reporter Allan Dawson and it’s about the Chinese blockage of Canadian canola due to concerns over blackleg. According to the story, agriculture minister Gerry Ritz said that he told Chinese officials that they needn’t fear their farmers growing Canadian canola because the seed won’t grow. The direct quote by Ritz in the paper is, “I assured them that with the varieties we have now, it’s not going to work because they all have Terminator seeds in them, it’s all genetically modified to get the oil quantity up.” The fact is that Terminator technology is not being used and seed will of course germinate and grow. That’s why canola readily volunteers the year following a crop. It is true that with hybrid varieties, the seed won’t produce as good a crop. However, the comments by Ritz seem to indicate that he has a lot of misconceptions about canola production. If that’s the case, he needs to be better briefed before spreading misinformation to foreign officials. There’s a lot to know about all the different sectors of agriculture and we all have misconceptions. Gerry Ritz should have people around him to help avoid making such errors. I’m Kevin Hursh.
November 5, 2009
Durum is a dog Of all the crops grown in the province, the one with perhaps the worst market outlook is durum. The one bit of good news is that the European Union has removed a tariff that was slapped on Canadian durum for the past month. Beyond this victory, the Canadian Wheat Board is admitting that durum is a troubled market. Here in Western Canada, durum production is up a million tonnes from initial expectations. The American crop is up 30 per cent from last year. At three million tonnes, it’s the largest U.S. crop in more than a decade. North Africa is the largest importer of Canadian durum, but their production has increased by 70 per cent as compared to last year. They won’t need to import as much. The Pool Return Outlook for No. 1 durum with 13 per cent protein is a dismal $4.40 a bushel after deducting average Saskatchewan freight and handling. Durum usually sells for a premium over spring wheat, but this year it’s likely to sell at a discount. And although the CWB has not released any official estimates, there will probably be another sizable carryover at the end of the crop year that producers will have to store. Durum is looking like a real dog. I’m Kevin Hursh.
November 4, 2009
Long gun democracy Is this the beginning of the end for the stupid, useless and expensive long gun registry? The Conservative minority has attracted enough support from individual NDP and Liberal members of parliament to win an initial vote on ending the registry. The Liberal and NDP leaders are indignant. They say the Conservatives are driving a wedge between urban and rural Canada. What a strange viewpoint. Shouldn’t our MPs be allowed to think for themselves sometimes rather than following the party line? Isn’t this the purest form of democracy? In the case of the long gun registry, it’s hard to understand how any thinking person could consider it useful. A lot of guns have never been registered, making the whole effort a joke. Plus there’s no evidence that the registry has reduced criminal activity. The country has long had extremely tight registration and regulation of hand guns. That isn’t in dispute, but it’s something the general public doesn’t seem to understand. Up until now, the Conservative minority hasn’t been able to kill the long gun registry, but they have made it as irrelevant as possible. A lot of behind the scenes lobbying must have gone into attracting support from some rural NDP and Liberal MPs, but that’s how politics should work. I’m Kevin Hursh.
Drying capacity doesn't match the job ahead I’ve talked to a number of people in recent days who are shaking their heads at the grain drying job ahead. Producers are desperate to make harvest progress, but there isn’t adequate drying capacity. Harvesting production in the tough category is bad enough, but large quantities have been combined in the damp category. Getting rid of that extra moisture takes more drying time. A lot of the crop remaining in the field is canola and flax. Both are valuable, but both are oilseeds. They are often being run through systems twice to avoid fires and still remove enough moisture. That means the drying capacity in tonnes per hour is limited. Producers are binning crop in the hope that they can get it dried, but they may have to keep rotating that grain as they wait for driers to become available. Some producers are using grain bagging systems hoping that the exclusion of air will prevent grain spoilage. Any grain bag punctures could be an even bigger problem than normal if there’s damp grain inside. Although dealing with this extremely late harvest is a big frustration, there is consolation. If frost had arrived at the normal time and/or if September hadn’t turned out much hotter than normal, we’d be facing much bigger problems and much larger losses. I’m Kevin Hursh.
November 2, 2009
Canaryseed at 20 cents and peas at $6 There can be a tremendous variation in grain prices from one buyer to another. Late last week I was checking out canaryseed prices. I’d heard that prices had improved to the 20 cent a pound range. While I did talk to a company paying 20 cents, I also talked to another than was still at 17. That three cents a pound or $1.50 per bushel is a big difference. Greg Kostal of Kostal Ag Consulting out of Winnipeg has been reporting a big and sudden price increase in yellow peas. Kostal says prices around $6 a bushel are available and I’ve seen other reports confirming that increase. However, you’ll still see prices listed that are only $4.50 to $5 a bushel, so not all buyers have upped the value. Mustard is another crop with a big price discrepancy. There are websites listing mustard prices of only around 15 cents a pound. However, the major mustard buyers have been paying significantly more. Quoting exact prices can be difficult because of freight differences and quality considerations. However, it pays to shop around and to keep your ear to the ground. It can take a lot of time to keep on top of markets. That’s why an increasing number of producers subscribe to one or more market newsletters. I’m Kevin Hursh.
November 1, 2009
Mass testing of flax samples The Flax Council of Canada has posted another update on the GMO issue. The European Union has endorsed a Flax Protocol which describes the system of sampling, testing and documentation pertaining to the presence of CDC Triffid in shipments of Canadian flaxseed to Europe. Canadian labs are being validated so they can test samples to make sure they’re free of Triffid before export. Producers are being asked to take representative samples of their flax. In the next few days, the Flax Council says it will provide producers with instructions as to how and where to get samples tested. Producers are being assured that if Triffid is discovered the industry will assist the producer in moving the flax into a market that will accept it without penalty. The aim is to make sure that Triffid is eliminated and doesn’t reappear in Canadian shipments. There’s no word yet on how all the testing will be paid for. The Flax Council is hopeful that labs will be validated and sufficient testing will be conducted in time for flax shipments to Europe to resume before the close of navigation on the St. Lawrence Seaway. Despite the major disruption in flax exports, flax bids have been improving. Of course, there’s a lot of flax that’s yet to be harvested. 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).
