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farm in uganda

Small-Scale Farms Can Beat the Odds

Ugandan producer earns $100K a year on one acre

There are many knowledgeable and respected experts who would write off the small-scale farmers as inefficient and incapable of feeding themselves, let alone feeding the world.
People like Shenggen Fan, the director general of the International Food Policy Research Institute in Washington, D.C., who identifies closely with the 84 per cent of the world’s 570 million farmers who survive on five acres or less.
He grew up on one of those farms — a five-acres farm in China he shared with his parents and two brothers.

The agricultural economist, honoured earlier this year by the World Food Program’s Hunger Hero Award for his commitment to fighting global hunger, is well aware small farmers produce 80 per cent of the food consumed in Asia and Africa.
“However, that does not mean small is beautiful,” Fan said last month at the Borlaug Dialogue in Des Moines, Iowa. “In many cases, small means hungry.”
For Fan, “move up or move out” should be the mantra for reducing hunger and improving the profitability and sustainability of small-scale farming. “There are small farmers who simply cannot be sustainable,” he said. “It is not fair to keep smallholders hungry and malnourished.”
It’s a view that is widely held. But it is also one that other experts warn must be tempered with a new reality.

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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 www.bmocm.com/economics.

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potato plants in field

The U.S. Department of Agriculture has approved commercial planting of a potato that is genetically modified to resist bruising and to produce less of a chemical that has caused cancer in animals.

Boise, Idaho-based J.R. Simplot Co. developed the potato, and it was approved by the USDA Friday.

Simplot is a major supplier of french fries, hash browns and other potato products for restaurant chains like McDonald’s Corp.

The company altered the potato’s DNA so it produces less acrylamide, which is suspected to be a human carcinogen. Potatoes naturally produce the chemical when they’re cooked at high temperatures.

The potato is also engineered to resist bruising, which can cause black spots in the potatoes, making them less desirable to buyers.

The USDA has approved genetically modified forms of many other crops, including corn and soybeans.

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corn on the cob

Even before the current U.S. Farm Bill was adopted, we shared our concern that a $4-plus plateau in corn prices, which was being widely predicted, was in all likelihood no plateau at all.

A year ago many were predicting corn would average $4.50 a bushel, partly because of ethanol demand and partly because production costs had increased so much in recent years. We were doubtful.

Even so, we were shocked, but not surprised, to see a newspaper headline announcing corn prices that were well below the $2 level. It was news of an elevator in the Minot, N.D. area that priced corn at $1.73 per bushel. Yes, you are reading that number correctly — $1.73 as the result of a $1.50 negative basis on a $3.23 futures price.

And that $3.23 itself is 20 per cent below the supposed $4-plus plateau.

We agree that it took a combination of circumstances to bring about a -$1.50 basis — an anticipated bumper crop, railroad problems, full elevators, and the lack of local demand — but circumstances will not pay the bills no matter how they came about.

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european sparrow

Good news: In many cases, efforts to protect rare European birds have helped stabilize and even increased the numbers of several feathery species. Bad news: European birds in general are in significant decline, and some of the most common species, like house sparrows, are the hardest hit. According to a study published this week in the…

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pasta ingredients

Spaghetti lovers could soon see higher prices for a plate of their favourite comfort food. That’s because a rainy spring, a dry summer and a freak September snowstorm in Alberta have damaged crops, resulting in a smaller harvest. Both the quality and yields this year are poorer than in the past. And if that wasn’t bad…

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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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red barn and white farmhouse

Family Farms Remain Vital to Agriculture

In a survey, 79 percent of respondents who left a family farm report that they continue to work in agriculture.

The world recently focused on 500 million family farmers while observing World Food Day Oct. 16.

The United Nations’ Food and Agriculture Organization has recognized family farmers as central to solving global hunger and malnutrition….

The FAO also reports that family farms account for an average of 80 percent of all holdings, based on data from 93 countries, and are the main producers of locally consumed food.

“The world cannot do without the family farmer,” says Amy McMillen, FAO’s partnerships and outreach co-ordinator.

“It’s because of the family farmer that we eat a variety of healthy foods every day, and yet family farmers still make up the majority of poor and hungry people in the world. We must do more to incentivize, celebrate and exponentially improve the lives of family farmers to ensure all people have access to fresh, healthy food.”

The face of family farming in North America is dynamic.

A new survey of 75 North American family farmers, led by Humanitas Global in collaboration with the FAO and Food Tank, shows they remain committed to family farming, despite the challenges.

Read full article.

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tractor and wagon on road

Farmers in Essex County are making the most of the current stretch of unusually warm weather.

Many had been unable to harvest due to the cool and wet weather, according to Leo Guilbeault, a director with the Grain Farmers of Ontario.

Guilbeault says the forecast for the next few days is a welcome relief.

“We haven’t had too much nice weather up until now to get harvest going, with all the rain and cold weather we’ve been getting,” he said. “It hasn’t been conducive to harvesting soybeans. We need a stretch of five or six days in a row to dry off the fields a little bit and dry off the crop.”

Overall, the fall field work is behind schedule, according to the Grain Farmers of Ontario.

Read full article.

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wine trails of west virginia

CHARLESTON, W.Va. (AP) – It can be pretty challenging to get a room full of adults of all ages and from all walks of life to agree on much of anything. But getting them to agree enthusiastically is the stuff of which dreams are fulfilled. On a recent afternoon, winemakers and distillery producers in the western…