Southeast Agri-News - August 17, 2012

Page 1

Issue No. 153

August 17, 2012

A Supplement to the Southeast Trader Express

Making The Cut

Getting a good start on a pretty good looking canola crop, Estevan area producer Don Gallaway was attacking harvest operations with some optimism this year following last year’s devastating floods that took most of the land in southeast Saskatchewan out of production.

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SOUTHEAST AGRI NEWS, FRIDAY, AUGUST 17, 2012

CWB facing new era with optimism By Norm Park for Agri-News The single desk Canadian Wheat Board, the version that Western Canadian producers knew so well for over 70 years, came to an end July 31 with a media conference and announcement in the board’s head office in Winnipeg. The CWB will continue to exist, but will now just be one of the many players in the game of buying, moving and marketing wheat and barley coming

from Western Canadian farmers. Agri-News joined the conference via a telephone conference link and heard CWB president Ian White speak about the future in optimistic tones following a crop outlook update. With U.S. crops suffering from heat stress and drought, prices will remain firm for most commodities, White and the CWB forecasters predicted. In fact, there is a lot of struggling going on worldwide with regards

to wheat production this summer, they said. The corn crop failure in the United States could reach epic levels with many crops barely achieving six to eight inches in height and no completeness to be found in practically any corn-raising regions. On the other hand, Western Canadian crops are in pretty good condition, said White, and with the ending of the CWB’s monopoly on the grain trade in this part of the country, net revenues

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should be strong thanks to increasing or steady grain prices. “We have confidence moving forward. We have a clear balance sheet thanks to government (federal) support,� he said, referring to the fact that the Canadian government has promised up to five years of transition funding support for the CWB that will now have to find its legs under a new regime of competition in the grain buying and marketing game. “There is a new business arrangement for us and the path we have chosen is forward,� said White. The CWB has already signed contracts, even

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though the new world order for the former monopolistic agency only began Aug. 1. White said there had been good response from producers who are choosing to have the CWB represent them by continuing to contract their wheat, durum wheat and barley to them. White said even with market conditions shifting in the years to come and prices maybe going into decline, the CWB was prepared to meet the challenge since there is a solid business plan in place. White said more will be revealed about the CWB’s business plan “once we get a good look at the future and see farmers

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as a part of our future and their relationship with the CWB.� The wheat board has just come off one of its highest revenue years ever, White said, and although in response to one media question he acknowledged that the future could be described as somewhat uncertain at this early stage, change was inevitable and was now occurring and he felt confi dent the board could provide good market conditions and environment for producers. While the CWB no longer retained a single desk advantage, White said he felt they still retained a modest advantage in the form of a history of being a strong business partner and retained a body of employees who knew how to contract, sell and capture values with a variety of grades. They are also experts in risk calculations, he said. White said the CWB has signed agreements with some major grain marketing companies and will offer them unique products with their pooling expertise that can add value in a competitive market environment. He said various suites of contract options and a spread of services, make the CWB a pretty strong option for farmers to pursue. White did not elaborate on future shipping programs other than to note that shipping windows on the West Coast handling system are well known to the CWB experts and the earlier the farmers can get in and tell them what and how much they’ll deliver to them, the better they will be served as a match for any other grain company. “We have the ability to add value with a streamlined operation and we have negotiated a new business arrangement that will help us succeed in a new marketing era,� he said in conclusion.

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Published monthly in Southeast Saskatchewan by the Prairie Newspaper Group., a subsidiary of Glacier Media. The Glacier group of companies collects personal information from our customers in the normal course of business transactions. We use that information to provide you with our products and services you request. On occasion we may contact you for purposes of research, surveys and other such matters. To provide you with better service we may share your personal information with our sister companies and also outside, selected third parties who perform work for us as suppliers, agents, service providers and information gatherers. Our subscription list may be provided to other organizations who have products and services that may be of interest to you. If you do not wish to participate in such matters, please contact us at the following address: The Southeast AgriNews, Box 730, Estevan, Saskatchewan, S4A 2A6; or phone (306) 634-2654. For a complete statement of our privacy policy, please go to our Website at: www.estevanmercury.ca The Southeast AgriNews is owned and operated by Boundary Publishers Ltd., a subsidiary of Glacier Ventures International Corp. We acknowledge the financial support of the Government of Canada through the Publications Assistance Program toward our mailing costs.

Editor: Norm Park Publisher: Peter Ng Advertising Manager: Jan Boyle email: normpark@estevanmercury.ca 68 Souris Avenue, Estevan Phone: 634-2654 Fax: 634- 3934

SOUTHEAST AGRI NEWS, FRIDAY, AUGUST 17, 2012 Page 3

Early indicators point to a decent crop By Norm Park for Agri-News Harvest operations are well underway in southeast Saskatchewan as evidenced by the number of combines that can be spotted out in the fields and also according to information supplied by crop specialists from the Ministry of Agriculture like Shannon Friesen. “Harvest of winter cereals and pulses was well underway this week,� said Friesen on Aug. 8. “Canola is getting swathed as well as some mustard and some fields are absolutely wonderful while others, not so much,� she added.

The agrologist, who works out of the ministry’s Weyburn office, said that overall, this year’s crop in southern Saskatchewan could well be recorded as average, “but it all depends on conditions such as the weather you’ve had in certain areas and how late you seeded ... things like that.� Heading into the second weekend in August, Friesen said that about two to eight per cent of the crop will have been harvested or pretty well ready to be brought in. She said aster yellow has provided a bit of a challenge this year, causing some crop damage. The infection, spread by leaf

hoppers, is pretty unusual for this part of the country and fortunately it’s only taken about three to seven per cent of the crops that have been affected. “Most years we won’t see it at all, but with a mild winter last year and early seeding this spring, it left some crops vulnerable,� she said. There has been some fusarium damage to an occasional durum crop, but nothing of major consequence and, in fact, there should be a good durum crop coming in. Because of the severe drought in Eastern Canada, some of the Western Canadian hay is being

shipped over there, probably selling for fairly good prices, she suggested. Prices for pretty well all crops should remain steady or increasing as the full effects of the American drought and heat damage to Ontario and Quebec’s crops come into full reality within the next couple of weeks. Corn will be a particularly enticing crop this year as far as pricing goes, but Friesen said most of the corn grown locally is usually meant for grazing although there is some that can be found in crop form, and this could be good for the producers because “the heat hasn’t

New CWB deal signings includes WIT The Weyburn Inland Terminal (WIT) has reached a deal with the CWB, formerly known as the Canadian Wheat Board, in which the WIT will accept grain deliveries from farmers who have entered into CWB pool and cash contracts. The agreement ensures farmers will have access to WIT marketing programs for wheat and durum while leaving the farmers with the option of dealing directly with the CWB. Rob Davis, WIT’s chief executive officer, and Ian White, chair-

man of the CWB, applauded the agreement and arrangement after the CWB entered into a new era of free marketing for Western Canadian wheat, durum wheat and barley that formerly had to be marketed only through the CWB’s central, singledesk market agency. Farmers now have the opportunity to market all their own grain and sell to the highest bidder. WIT is also one of six grain handlers that own Alliance Grain Terminal in Vancouver and they too,

have come to an agreement with the CWB regarding port capacity and handling of products. The CWB noted earlier that farmers can deliver any product to them through any elevator across the Prairies as of Aug. 7. The CWB board reached handling agreement with all Western Canadian grain companies before making the announcement. The agreements were made with 10 separate companies, with all of them agreeing to take CWB’s contracted grain and other crops.

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been friendly to the others and it hasn’t been that beneficial around here either lately.� The rain that arrived Aug. 6 and 7 will help boost some of the later seeded cereal crops, Friesen said and it will help the region’s top soils retain moisture heading into fall and winter. In total, moisture conditions have been pretty good this year and certainly not devastating as they were last year when about 90 per cent of the land in the immediate southeast was taken out of production due to flood situations. Some of those fields that couldn’t be accessed earlier this spring were put into flax and barley ... even though they are the later maturing crops. “I believe the yields

around the southeast will be pretty decent,� she said, relying on early results from the two or three per cent of the producers who had already brought some products into the bins. Local producer Don Gallaway, who spoke to Agri-news while surveying his canola harvest operations on Aug. 6, said with a laugh that “I was hoping it would be bumper this year, so I could retire, but it doesn’t seem to be there. It looks pretty good standing, but it’ll probably be just around average once it gets in the bin.� Gallaway said he was making good early progress on the field located just a few kilometres north of Estevan, aided by recent warm weather that provided near perfect combining conditions.

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SOUTHEAST AGRI NEWS, FRIDAY, AUGUST 17, 2012

WCWG herald the beginning of the new era The Western Canadian grain industry is primed and ready for the implementation of an open market in wheat and barley, said the Western Canadian Wheat Growers Association (WCWG) on the eve of the ending of the CWB’s single desk on Aug. 1. Prairie grain farmers are now poised to make significant gains under their new found freedom, the WCWG said in a release issued July 30.

“Grain prices are strong and there appears to be a decent crop coming for most western farmers,� said Kevin Bender, president of the WCWG. “Re-establishing the open market will create some excellent marketing opportunities for Prairie farmers.� Under the Canadian Wheat Board monopoly, prices for wheat and barley were often a dollar per bushel or more below open market prices. The

creation of an open market has eliminated this discrepancy. Forward prices now being offered on the Prairies are on par with prices offered at elevators in the northern U.S. states. “The creation of an open market is generating some attractive bids for our grain,� said Cherilyn Nagel, past president of the WCWG. “Prices for new crop wheat and barley on the Prairies are every bit as good, and sometimes better than prices being

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offered in the U.S.� Farmers also now have greater flexibility to deliver their wheat and barley at a time of their choosing. In the past, because of delivery restrictions on wheat and malt barley, farmers were

often forced to sell canola or other non-CWB crops at harvest time to generate cashflow. The Wheat Growers said they were also pleased that the transition to an open market is proceeding smoothly. They said they

had formed a working group of Canadian and U.S. farm and trade associations and launched a website that provides information to Canadian and U.S. farmers who may be looking at marketing grain across the border.

WCWG like windup plan The Western Canadian Wheat Growers Association said in mid-June they endorsed the federal government’s decision to cover all Canadian Wheat Board (CWB) wind-up costs associated with the end of the CWB’s monopoly. “This payment will ensure farmers are not saddled with the costs of winding up,� said Kevin Bender, a WCWG spokesman. “It gives the new CWB every opportunity to be an effective marketing

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choice for farmers.� The Wheat Growers had argued that costs of winding up the CWB should fall to the people of Canada given that it was the federal government that imposed the monopoly in 1943. The payout amount of up to $349 million appears high, however it represents a fraction of the cost of the monopoly to Western Canadian farmers and the Canadian economy over the decades, they said.

The payout will be recouped soon enough through higher income tax revenue assessed on Prairie farm income under the open market system, they added. “Prairie farmers are be free of the monopoly and are capturing the benefits of an open market,� said Bender. “The increased farm profitability and growth in the Prairie farm economy will soon far exceed this one-time windup payment.�

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