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old grain elevator

The universe is unfolding as it should at the old Canadian Wheat Board, but the federal government isn’t doing a very good job explaining it.

When the Harper government ended the board’s monopoly on the sale of western-Canadian wheat and barley in 2012 amid much anger and resistance, it set up in its place an interim organization with a plan to privatize or dissolve it before 2017.

It would either survive as a viable grain-marketing company, or face an ignoble demise.

The possible privatization of CWB, as the new entity is now known, has raised questions about the fair disposition of assets, which include a building on Main Street in Winnipeg, as well as grain elevators, rail cars and ships. Ottawa also provided the new group with $350 million to help with transition costs.

A court has ruled CWB’s assets do not belong to the farmers who did business through the board and funded its operations, but a group of loyalists to the old organization wants to appeal that judgment to the Supreme Court of Canada.

The government’s strategic goal, according to grain analysts, is to give farmers more choice by boosting competition in the grain-marketing industry in Western Canada, which would undoubtedly be a good thing. The more buyers the better.

The new entity has only just begun the process of transforming itself into a private-sector grain-trading company, but it needs a partner to gain expertise, new markets and capital.

For obvious reasons, the government would prefer to sell to a company that is not active in western Canada today. Selling to an existing player would hardly increase competition.

The idea is sound, although the execution has left some critics a little nervous.

A Saskatchewan group called Farmers of North America says it has raised about $50 million towards the estimated sale price of about $300 million. The government rejected the overture without explanation, but Ottawa apparently doesn’t think it would add to the competitive environment in the region.

Speculation has since emerged that the preferred buyer is Archer Daniels Midland Company, a multi-billion dollar Chicago-based food-processing conglomerate that currently has very little presence as a grain marketer in western Canada.

Critics, including Winnipeg NDP MP Pat Martin, say they are puzzled that all the money from the sale will remain with the CWB and its new owner, instead of the government or even farmers.

The government’s intent, however, is to help recapitalize the CWB, which has invested heavily in recent years in grain-handling infrastructure.

The book value of the CWB is unknown because the government refuses to release its financial statements for reasons of commercial confidentiality, but most of its assets are probably highly leveraged.

The government should disclose more information if a sale is ever achieved. It needs only to look at how the sale of Petro-Canada was handled as an example of complete transparency.

Federal legislation requires the new owner to give farmers an equity interest in the CWB, based on the volume of grain delivered. Any farmer who delivers grain against a CWB contract since 2013-14 is eligible to participate. And it won’t cost farmers anything to participate. CWB will continue to buy and sell their grain at market prices.

Agriculture Minister Gerry Ritz may have the best interests of farmers in mind in promoting competition, but he needs to provide a few more kernels of information so everyone can be comfortable with the outcome.

As usual, the Harper government suffers from its abysmal performance as a communicator.

Editorials are the consensus view of the Winnipeg Free Press’ editorial board, comprising Catherine Mitchell, David O’Brien, Shannon Sampert, and Paul Samyn.

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turkeys in barn

Up to 140,000 chickens and turkeys culled in B.C. as officials try to contain outbreak of highly-contagious avian flu

With seven countries now turning away imports of Canadian poultry due to a Vancouver-area outbreak of avian flu, federal officials are rushing to contain the highly contagious virus before it can infect farms beyond the Fraser Valley.

While the virus is not dangerous to humans, it has the potential to kill off entire barns of poultry within a matter of days.

“To lose most of your flock within the span of a week is completely unheard of,” said Ray Nickel, president of the B.C. Poultry Association. “It’s hard to even visualize unless you’ve gone through and experienced it.”

Over the weekend, the Canadian Food Inspection Agency confirmed that five farms have become infected by a “high pathogen” strain of H5N2 never before seen on Canadian soil.

As of Sunday, all five properties were subjected to “biosecurity” quarantines as crews in HAZMAT suits destroyed as many as 140,000 chickens and turkeys.

As many as 90 additional poultry farms fall within the three-kilometre-wide quarantine zones established around the infected farms.

The stocks at these other farms will not be culled if no evidence of avian flu is found, but they are subject to strict conditions about moving their birds out of the Fraser Valley.

In a weekend statement, the Canadian Food Inspection Agency said it has “mobilized all available resources to manage this situation.”

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colorful bee hives

Canadian farmers may need to follow the lead of producers in North Dakota if they want to preserve their right to use modern agricultural technology such as seed treatments.

The state passed a right-to-farm amendment to its constitution in 2012 that enshrines a producer’s right to use scientifically proven agricultural practices.

“It’s going to give us a big leg up on special interest groups that come in from outside and want to tell us what to do and what not to do,” North Dakota Farm Bureau president Doyle Johannes said shortly after voters in the state approved the amendment in a ballot initiative.

“They’re not going to stop. That was the big thing, to beat these people back. We don’t need outsiders coming here and telling us how to do things.”

North Dakota Farm Bureau executive vice-president Jeff Missling said neonicotinoid seed treatments are an example of a scientifically approved practice that activist groups would like to eliminate.

The Ontario government announced Nov. 25 that it plans to cut the use of neonicotinoid seed treatments by 80 percent on corn and soybeans. Provincial officials said the reductions are necessary because the insecticides are a threat to pollinators and the broader ecosystem.

Grain Farmers of Ontario and other agricultural groups have said the policy is outrageous and unscientific.

Barry Senft, GFO’s chief executive officer, said environmental groups had a disproportionate influence on the government’s decision.

The David Suzuki Foundation and the Sierra Club of Canada helped lead the campaign against neonicotinoid seed treatments in Ontario.

Missling said the Ontario decision is a classic case of activists meddling in agricultural practices.

“Your (Ontario) example is so appropriate because we see things happening every day to our industry,” Missling said from his office in Fargo, N.D.

“Challenges to the use of modern technologies that have been proven and have been tested.”

Missling said North Dakota’s constitutional amendment doesn’t provide absolute protection for producers. An environmental group or animal rights organization that wanted to test its validity would have to initiate a campaign to alter a farm practice in North Dakota.

“It would have to be challenged in the court system for it to have any teeth,” Missling said.

“We hope the language is strong enough to address issues like (neonics), but ultimately it will take a lawsuit to prove that one day.”

Keystone Agricultural Producers president Doug Chorney said activist groups might claim they are acting in the public’s interest, but typically that’s not their goal.

“It seems like they are motivated more by changing the method of agricultural production for crops and livestock,” he said.

“They have some reminiscent image of agriculture that doesn’t exist anymore…. These activists’ goal of taking us back to that is not only regressive for farmers … but it has ripples through our whole economy.”

Missling said he’s received inquiries from agricultural groups in other states that would like to follow North Dakota’s lead.

Missouri voters approved a similar constitutional amendment ensuring producers “right to farm” earlier this year.

“It would not surprise me at all if Canadian producers got together… and tried to put together some protection,” Missling said.

“The resounding theme I continue to hear is that these regulations are coming at us more rapidly than ever before. And they’re coming at us from angles we’ve never seen before.”

Missling said the pressure on agriculture is not going to abate. Farmers in places such as Montana or Manitoba should not feel safe just because they are thousands of kilometres from major cities.

“North Dakota is one of the more desolate (and rural) states in the United States,” he said.

“But even a state like ours continues to be under attack. We’re having meetings next week with government agencies galore to try and solve some issues…. Just because you have a more (isolated) setting does not mean you’re immune to these attacks.”

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train engines at grain elevator

Alberta farm groups welcomed the federal government’s weekend decision to extend minimum grain hauling mandates, but cautioned more still needs to be done if producers are to have long-term confidence in Canada’s grain transportation system.

With just hours remaining before the expiration of a government order put in place last March, Transport Minister Lisa Raitt and Agriculture Minister Gerry Ritz announced Saturday that minimum grain volume requirements will be extended until March 28, 2015. Under the new order, Canadian Pacific Railway and Canadian National Railway will be required to move specified amounts of grain — ranging from 200,000 metric tonnes per week to 465,000 metric tonnes per week — all winter long.

The volume targets are smaller than the 500,000 metric tonnes per week the railways were required to haul under the last government order, put in place after Canada’s railways struggled last year to transport a record-breaking crop in the midst of one of the harshest winters on record. This year’s harvest is smaller than 2013’s.

Farmers have alleged grain shipments are being rejected by the railways in favour of crude oil.

The new rules carry the threat of a $100,000 per week penalty for non-compliance, and the railways will also be required to submit detailed winter contingency plans to the government.

CN spokesperson Mark Hallman said in a statement that the regulations should have been lifted, since CN has been meeting demand since the new crop year began on Aug. 1 and continues to set a record-setting pace.

“More regulation threatens to increase costs, stifle innovation and potentially discourage investments that are critical to building the strong, safe and resilient supply chains of the future,” Hallman said in an e-mail.

Canadian Pacific also questioned the need for extended government intervention, issuing a statement saying it is working with all its commodity customers to improve efficiency and increase capacity.

“More than anything, it is market forces that have driven the record volumes of grain that CP has delivered this year and last,” the statement read.

But Lynn Jacobson, president of the Alberta Federation of Agriculture, said his organization had been pushing for the government to renew the regulations. He estimates last year’s transportation backlog cost Prairie farmers an estimated $7 billion to $8 billion, as crops that could have been sold at premium prices sat in bins and elevators instead.

He said there’s no reason to think a similar situation couldn’t happen again, especially in the event of another harsh winter.

“We’ve been pushing for this, because it’s about the only lever we can bring against the railways,” Jacobson said. “If they took all the penalties off and transportation went sideways again like it did last year, that wouldn’t look too good for the government.”

Jacobson cautioned the minimum volume regulations are only a short-term solution. The federal government is currently conducting a review of Canada’s Transportation Act, and many farm groups believe legislative changes are needed to ensure the rail system can meet the needs of the agricultural sector for decades to come.

“The railways have never been compelled to do anything they didn’t want to do. They’ve basically been allowed to do whatever they want,” he said. “And that’s good for them and their shareholders, but it sure doesn’t mean much for the rest of Western Canada.”

Many farm groups, including the Alberta Wheat Commission and the Grain Growers of Canada, have called for a mechanism that would allow for reciprocal penalties to be part of any service agreement signed between a railway and a grain company.

Jacobson said he also wants to see more transparency in the system, so that farmers know how many cars are available and what a railway’s capacity is in any given week.

In a statement announcing the government’s decision, Ritz called on all parties in the supply chain to work together to ensure the efficient movement of grain to markets this winter.

Read the full article here.

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combine harvesting wheat

One of the accepted truisms about agriculture in Western Canada is farms will continue to get bigger.
Prairie farmers began expanding almost as soon as they took up residence under the homesteading law of 1872, a trend that continues. The 2011 census of agriculture saw average farm sizes grow between 13 and 15 per cent in the three Prairie provinces during five years.
Averages don’t tell the whole story. There are viable farms that crop tens of thousands of acres, just as there are equally viable operations that still function quite nicely on several hundred. Studies show that while small farms often achieve a higher return per acre, they don’t generate enough to support the family, which is why more than half of family farms rely on off-farm income.
But both past and recent history suggest there is such a thing as too big. There were about 90 so-called Bonanza farms of between 3,000 and 100,000 acres on the northern Great Plains in the late 1800s.
Most failed within a generation. Hired management was able to leverage their scale for marketing and input purchases, but when things didn’t go according to plan — as is the norm in farming — they were unable to weather the downturns. One of their biggest weaknesses was finding labour — up to 1,000 men per farm plus the women to cook for them.
A few years ago, One Earth Farms, a subsidiary of Toronto-based Sprott Management Resource Corp., announced plans to crop up to a million acres in Western Canada. At one point, it reached 200,000. It’s now down to 5,000 acres and has quit crop production altogether to focus on producing organic beef.
Earlier this month, Broadacre Agriculture Inc., a modern-day mega-farm operating 65,000 acres of owned and leased land in Saskatchewan, entered creditor protection just four years into its business plan to become the “pre-eminent farm operator in Canada.”
According to the affidavit from its chief financial officer, its crops didn’t yield as well as expected, it fell behind on its payments and its investors and creditors lost faith. It also didn’t help that it had recently borrowed from private lenders at 20 per cent interest.
“The unfortunate reality is the company has never been profitable,” the affidavit states.
Here in Canada, where the cost of land, a lack of labour, outside capital and agronomic management have all emerged as constraints to sheer scale — the owner-operator model is the only one that has demonstrated it can thrive through multiple generations.
U.S. agricultural economist John Ikerd once characterized the big-little farm debate as having less to do with the actual acres on the farm, than the philosophy of the farmer farming it.
As Ikerd described it, a farmer who has five acres and dreams about owning 10 is a big farmer. A farmer with 1,000 acres who’d like to draw the same production and revenue from 600 is small.
It’s an important context as global attention increasingly turns to how best to increase production but not acreage.
Commodity markets are drowning right now under record world production of corn, wheat and soybeans, but global yield gains have been stagnating in recent times — a disturbing trend a team of U.S. researchers set out to quantify in 2013.
“During the 1980s and 1990s, nearly all of the increased food production was met on existing land by increasing yields,” said Ken Cassman, a University of Nebraska agronomist who worked on the study.
He noted an abrupt increase of 24 million acres of farmed land per year starting in 2000.
“This is the fastest rate of crop area expansion in human history. Some have called this an agricultural time bomb, because it is not sustainable,” Cassman said, noting an urgent need to increase yields through better management and implement policies that hold agriculture on existing area.
The answer to the big-little question remains elusive. But it seems farmers of all sizes are facing increasing pressure to grow bigger — without becoming bigger.

Full article here.

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young farmer in field

More than 60 young people took part in this year’s Ontario Young Farmers Forum.

The forum is an annual event held in conjunction with the Ontario Federation of Agriculture annual convention.

The Executive Director of Agricultural Programs for Junior Farmers of Ontario – Justin Williams – was among the attendees.

He says the delegates all appeared to have a positive outlook on the future of the industry.

Forum Administrator Amy Matheson says they also talked about the importance of telling the story about farming.

She points out that what farmers find ordinary in agriculture, non-farmers find extraordinary.

And she says while there are a lot of people talking about food, few are involved in agriculture.

The 2014 Ontario Young Farmers Forum was held this week in Niagara Falls.

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red combine harvester corn

Canada is the world’s top agricultural trader compared to all other countries on a per capita basis, according to Farm Credit Canada’s (FCC) annual report on global trade.

In 2013, the value of Canada’s agricultural imports and exports was more than $2,100 US per person, followed by Australia at about $1,900 US per person, says the report by FCC Ag Economics entitled A 2014 Look at Global Trade.

The report takes the combined value of all agriculture exports and imports from each of the major agriculture trading countries and divides that number by each country’s respective population. “It shows the agriculture sector is more important to Canada than all other countries, including the United States, Australia and the European Union,” J.P. Gervais, FCC’s chief agricultural economist, said in a press release.

Overall, the report shows Canada as the fifth-largest agriculture exporter in the world — behind the European Union, United States, Brazil and China — and the sixth-largest agriculture importer. China and India — with their huge and growing populations — represent major markets for Canadian agricultural producers.

“The combination of rising household incomes and population growth in India and China present major market opportunities for Canadian exports of beef, pork and pulse crops,” Gervais said. “Canada appears well-positioned as an important agriculture trader in the world and the expansion of trade relations will only help to sustain and build on that.”

The removal of trade barriers for Canadian lentils to India could result in a 147 per cent increase in exports over five years, while rising incomes in China present major market opportunities for beef, the report said. However, pork will remain the preferred protein of the Chinese population.

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dry soybeans in field

Low Crop Prices to Weigh on North American Farmers’ Bottom Lines-BMO Economics


North American farmers are facing the lowest crop prices in years as a record harvest drives up supply – especially for corn and soybeans, the continent’s top crops – according to a report from BMO Economics released to coincide with the Fall harvest.

Despite the challenging environment, most farmers should weather the downturn in relatively strong form, as it comes after several years of near-record farm earnings. Soaring hog and cattle prices will also allow diversified operators to offset lower crop revenue with higher livestock earnings, noted Aaron Goertzen, Economist, BMO Capital Markets.

In the report, Mr. Goertzen also points to large crop stockpiles, muted global export demand and limited rail capacity as key factors that will likely continue to depress prices for leading crops into 2015.

Furthermore, overall crop production is not expected to drop much next year because the high cost of land and machinery will drive most producers to forge ahead with planting even though market conditions are weak. Mr. Goertzen notes that crop prices could begin to recover once the size of next year’s crop can be gauged.

“After an atrocious growing season in 2012, North American farmers are now in the process of cultivating a second straight bumper crop,” Mr. Goertzen said. “Yields on corn and soybeans, the continent’s two largest crops, approached all-time highs in 2013 and look to have blown the previous records out of the water this year,” he said.

Crop prices in North America were flirting with all-time highs just two years ago, spurred by several years of lacklustre growing conditions and the worst U.S. drought in 25 years. Crop prices have declined sharply since then, with corn and soybean prices down 34 per cent and 25 per cent year-over-year respectively.

Prices for corn and soybeans fell sharply amid rising output, with corn production up 3 per cent in North America this year, and 10 per cent over the previous record in 2010. Soybean production in North America is up 17 per cent over last year.

Crop sizes will likely remain high next year as well because farmers will have few alternatives to reallocate acreage in an environment where prices for most key crops, including wheat and canola, are low.

“Crop prices are unlikely to rebound with gusto any time soon, and scarce rail capacity will also exacerbate the supply overhang, particularly in U.S. states where oil producers compete against farmers for space on the tracks,” said Mr. Goertzen. He noted that a more moderate harvest in Canada will make transportation less problematic north of the border this year.

“Our clients have experienced a big improvement in growing conditions since the lingering effects of the drought in 2012 and delayed planting last year have worn off,” said Sam Miller, Managing Director and Head, Agriculture, BMO Harris Bank. “The result of this year’s vast crop, however, is that prices have trended downward for much of 2014. As we look ahead to 2015, margins will be squeezed with prices declining at a greater rate than costs of production. Supply and demand in grains will eventually come back into balance if there is a reduced overall supply, continued increase in global demand, and weather that would keep excess yield in check.”

The U.S. Department of Agriculture estimates that total U.S. crop revenue will decline around 7 per cent this year, or some $15 billion. BMO Economics notes that Canada will likely be hit even harder, with crop revenue estimated to be down 9 per cent for the year. The USDA expects corn, wheat and canola will all be exported in lower quantities from North America this year.

The good news is that most farmers should be relatively well equipped to handle the dip, even if it lasts a while. Since farm incomes are backing away from near-record highs, most producers should be able to weather temporarily lower profitability.

“Fluctuations in crop yields, production and prices are nothing new,” said Andrew Bowman, National Director, Agriculture, BMO Bank of Montreal. “But as a group, farmers are highly proficient risk managers and, as such, we remain confidence in their ability to manage through fluctuating crop prices.”

The full report can be downloaded at

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grey wolf

A group of Alberta farmers who pasture their cattle near Cooking Lake are asking for the province’s help to manage a pack of wolves that are killing their animals.

Farmer Dan Brown sends his herd of 60 cows to a community pasture owned by the province and shared with 22 other farmers from May to October each year.

But this year, within a month of pasturing the cattle, a pack of wolves moved in and started picking them off one by one.

“Probably the biggest frustration with the whole thing is our first kill was the 28th of May, so we’ve been struggling with this all summer,” he said.

In total, Brown says nearly 30 grazing cows were killed by wolves, and many others were traumatized by the attacks.

Read full article.

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ontario farm at sunset
GUELPH, ON, Sept. 29, 2014 /CNW/ – Ontario is a province overflowing with nutritious and delicious food. So, from October 6 to 11, Farm & Food Care, Foodland Ontario and Ontario’s 37,000 farm families will be celebrating the people that make that possible during Ontario Agriculture Week. Our province is home to families who produce meat,…