Afe150202 by Farm Business Communications

HIRING OPPORTUNITY

OIL DROP DIVIDEND

Thousands of workers will be looking for jobs » PG 3

Diesel due for a big fall, but not other inputs » PG 20 Publications Mail Agreement # 40069240

V o l u m e 1 2 , n u m b e r 3 f e b r u a r y 2 , 2 0 1 5

Alberta producers want checkoff raised Alberta Beef Producers says its members have endorsed raising the checkoff By Alexis Kienlen af staff

lberta producers want to see the checkoff on cattle rise by a third — and be made mandatory. Attendees at Alberta Beef Producers’ meetings earlier this winter were asked if they favoured a higher, mandatory checkoff and the answer was a strong ‘yes,’ said Rich Smith, the organization’s executive director.

see CHECKOFF } page 6

THE BIG DROP: How the plunge in oil prices and the loonie affects you From inputs and labour to the complex ramifications for the beef industry, the drop in oil prices and the dollar is changing the farm landscape By Alexis Kienlen and Jennifer Blair af staff

plunging loonie and free-falling oil prices will create winners and losers — and farmers will clearly be in the winners’ circle, according to one of Alberta’s top economists. “Agriculture, forestry and tourism will all do well,” said Todd Hirsch, senior economist with ATB Financial. “It’s really a big benefit to agriculture that we are seeing good prices for cattle, as well as input costs, like fuel, falling.” Calgary-based Hirsch, a nationally known commentator and author, isn’t alone in predicting the big drop in oil prices and the currency will be good for farmers. “Agriculture may be a sector where the positives outweigh the negatives,” said Michael Burt, director of industrial economic trends with the Conference Board of Canada. Another big positive is the buoyant U.S. economy, where consumer confidence is shooting up as businesses expand and unemployment falls, said Hirsch. “Incomes, consumers, and jobs are all coming back in the States, which adds to more consumption of higher discretionary items like steak,” he said. “In a downturn, people tend to buy more hotdogs. When incomes are rising and confidence is rising, people buy T-bone steaks and restaurant meals, and tend to consume higher-value items like beef.” But Hirsch also has some advice: Use this opportunity to invest in the future.

Oil’s steep fall — and the resulting drop in the dollar — has big implications for Alberta agriculture. photo: thinkstock “The U.S. will always be the largest market, just because of geography and the size of the American economy and everything else — but overreliance on any one market is never a good thing,” he said. “It would be really great if we could continue diversifying. Our free trade agreement with South Korea offers some opportunities. There are 50 million people in South Korea, and they’re a first world country with rising incomes.”

Big Drop

That’s food for thought and a call for more investment is one of the impacts covered in this edition of Alberta Farmer. The series of Big Drop stories also looks at the impact of the falling dollar and oil prices on inputs, labour, local food, and the beef industry — specifically exports, feeders, and the packing industry. Coverage begins on Page 3. akienlen@fbcpublishing.com jennifer.blair@fbcpublishing.com

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news » inside this week

inside » EARNING THEIR KEEP Wild pollinators provide valuable services on farms

FEBRUARY 2, 2015 • ALBERTAFARMEXPRESS.CA

livestock

crops

PAIN FOR PACKERS

A HARD SELL

columNists Laura Rance Is land still a good buy?

Fred Hays Oil’s fall creates winners and losers

HANDS-ON LEARNING Safety City makes it ‘real’ when teaching safety

4 5

Brenda Schoepp

Low dollar will send more cattle south

Producers still not sold on winter wheat

We’re missing the value-added boat

Distillers grains are good for livestock gut health The yeast in distillers grains feeds bacteria called prebiotics, and they may promote health and improve feed efficiency By Jennifer Blair

“There’s a number of labs that are actually exploring the use of yeast as an alternative to antibiotics for growth promotion.”

af staff

ingeing on baked goods and beer may actually be a boon for your belly, suggests a study recently completed by a team of international researchers. “Yeast, which has become a component of the human diet, is degraded by bacteria that live in the intestines of humans,” said Wade Abbott, a research scientist with Agriculture and Agri-Food Canada in Lethbridge. “The bacteria that live in our intestines that are dynamically involved in the digestion of food can use the sugars very selectively as a nutrient source.” And while that’s good news for bread lovers, it’s even better news for livestock feeders who are looking for ways to improve gut health in their animals. “Pigs that were fed distillers grains actually started to display profiles of bacteria in their intestines that were similar, in the sense that bacteria that digests yeast sugars were starting to show up in pig intestines as well,” said Abbott. The research — a collaboration between Abbott, Harry Gilbert of Newcastle University, and Eric Martens of the University of Michigan — began in 2008 as a way to “improve intestinal health” in both humans and livestock. As part of the study, the pigs were fed distillers grains, a common feed, which is enriched with yeast.

Wade Abbott

Lethbridge researcher Wade Abbott, along with a team of international scientists, has found that livestock gut health could be improved by feeding prebiotics, like those found in distillers grains. Photo: courtesy Wade Abbott “As a byproduct of fermentation, the yeast is still a component of these grains, so when the pigs and potentially other livestock are eating distillers grains, their bacteria in their intestines are becoming attuned to degrading those yeast sugars,” said Abbott. These bacteria, called prebiotics, have important applications in food safety, he said. “They’re believed to prevent the binding of pathogens to the intestinal surface of the host,” he said. “They can competitively exclude pathogens from binding and colonizing within the intestine.”

1+1=3

Prebiotics are also under “extensive research” as a growth promoter, as they help animals extract more nutrients from their feed. “There’s a number of labs that are actually exploring the use of yeast as an alternative to antibiotics for growth promotion.” Right now, Abbott’s team is working on producing a refined prebiotic feed additive that should offer better results than simply feeding distillers grains to livestock. “What we’re looking at doing is trying to harness the enzymes

involved in metabolizing the yeast sugars and generate more potent forms of prebiotics,” said Abbott, adding that results are a few years away. The “big challenge,” he said, is cost effectiveness. “Say you took an agricultural residue, such as distillers grains, and you fed it directly to livestock. That’s a lot easier to get your hands on and it’s a lot easier to produce because it’s just a byproduct of another process.” Refining those residues and making them “more potent” requires more processing, which

increases the cost of production and, ultimately, the feed. “If the producer’s not going to be making money, there won’t be uptake in the industry of that technology,” said Abbott. “The challenge is to find efficient ways that are actually going to save the farmer money and are really going to make a difference in the health of the animal as well.” Abbott won’t hazard a guess as to what this might mean for a producer’s bottom line — the research is still in the early stages — but in the meantime, producers could see some health benefits to feeding their livestock distillers grains. “The potential is there in distillers grains, and studies are currently underway to see if those types of health benefits are actually getting translated into the animal.” jennifer.blair@fbcpublishing.com

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ALBERTAFARMEXPRESS.CA • FEBRUARY 2, 2015

Oilpatch’s pain could be agriculture’s gain as layoffs mount Thousands of energy and construction workers will be looking for jobs, but agricultural employers need to attract them By Jennifer Blair af staff

he layoffs have already started in Alberta’s energy sector — but many more are on the way, say experts. “We’re estimating somewhere in the range of $12 billion less investment taking place,” said Michael Burt, director of industrial economic trends with the Conference Board of Canada. “That’s going to translate into thousands of fewer jobs in the oilpatch and also in the construction industry associated with developing oilsands pipelines.” “We are expecting some job losses in the energy sector and I think that translates into some nice, juicy resumés coming through the door of forest and ag producers,” added Todd Hirsch, senior economist with ATB Financial. “That’s a benefit — and people will not have to back up the money truck to get them.” Farm employers across the country have struggled to find workers, and the fact that there are “close to 50,000” temporary foreign workers working in Canadian agriculture is evidence of that, said Burt. But the big problem in Alberta has been competition for workers, such as truck drivers, that are in demand in both agriculture and the energy sector, he said. “They may find it easier to get a job in oil and gas, or they may get higher pay,” said Burt. “So you’ve seen people in particular occupations being drawn out of agriculture, and likely other sectors as well, into oil and gas when the boom was occurring the last few years.”

Agriculture has also had trouble attracting unskilled labourers who have been drawn by the high pay and high demand for workers in the energy business. But that was then — the landscape is dramatically different now, said Burt. “Basically, those people who were working in the oilsands or the oil and gas sector will be looking for jobs elsewhere. Agriculture and other sectors will likely benefit from that.”

Big Drop

“Basically, those people who were working in the oilsands or the oil and gas sector will be looking for jobs elsewhere.” Michael Burt

Attracting workers

So how can producers grab hold of some of these workers? Use some of the same tricks that oil and gas companies do, suggests Cheryl Knight, an oil and gas human resources consultant based in Calgary, Knight promotes a “multi-pronged approach” that embraces flexibility. “The worker today is demanding much more flexibility,” said Knight, who spoke at the Agricultural Labour Summit in Red Deer late last year. “We can complain about it. We can fight it. We can try to change it. But the best thing to do is to figure out ways to address it.” The oil and gas industry has been built on a “mobile workforce” — skilled workers from other provinces who are offered customized work rotations, said Knight. And producers can attract farm workers using a similar system. “You can target areas of high unemployment across Canada where there are skilled people who are unemployed,” she said. “What opportunities do you have to address some of your labour supply (problems) through mobile workers and rotations?”

Untapped labour pools

Producers should also be looking at “underrepresented supply pools,” as the oil and gas industry has done. Youth are the easiest to attract — if employers make it easy for them. “Youth do not know how to find you — they’re a little bit lazy in terms of how to find the sector and how to get into the sector,” said Knight, who suggests working with high schools and colleges to utilize or develop work-placement programs. Immigrants are another labour supply pool that producers should consider. “There are immigrants in Canada who are unemployed and underemployed,” said Knight. “They are the most motivated, skilled, educated, and flexible workforce that we have in Canada.” And while Aboriginal workers can be difficult to attract, they also represent a largely untapped labour pool that producers should explore, she added. “As we’ve found in oil and gas, partnerships with Aboriginal communities are critical,” she said. “It’s probably the most long-term prospect that we have, and it’s one of the prongs that we must work on.” But producers also need to be willing and able to invest in training and development if they hope to attract and retain farm workers, regardless of whether these workers came from the oilpatch. “You’re going to have to train those people who have transferrable skills, but not 100 per cent of the skills that you need,” said Knight. “There’s no magic wand. There are low-hanging fruit… but you have to be working at things all the way through.” — with files from Alexis Kienlen jennifer.blair@fbcpublishing.com

FACT BOX ALBERTA’S JOB SCENE BY THE NUMBERS

Seasonally adjusted unemployment rate: 4.7% in December 2014 versus 4.5% in November 2014

INCREASE IN LABOUR FORCE

INCREASE IN JOBS $ $ $ $ $ $ $ $ $ $

12,100

PEOPLE

(DEC. VS. NOV.)

5,700

(DEC. VS. NOV.)

NUMBER OF JOBS: 2,302,6000

“We are expecting some job losses in the energy sector and I think that translates into some nice, juicy resumés coming through the door.” Todd Hirsch

IN CONSTRUCTION

IN ENERGY, MINING & FORESTRY

IN AGRICULTURE

252,000

171,000

62,200

(Source: Alberta Ministry of Jobs, Skills, Training and Labour)

FEBRUARY 2, 2015 • ALBERTAFARMEXPRESS.CA

EDITOR Glenn Cheater Phone: 780-919-2320 Email: glenn.cheater@fbcpublishing.com twitter: @glenncheater

Farmland — always a good buy?

Reporters Alexis Kienlen, Edmonton 780-668-3121 Email: akienlen@fbcpublishing.com Jennifer Blair, Red Deer 403-613-7573 Email: jennifer.blair@fbcpublishing.com

Land has historically been a good investment, but it doesn’t mean it’s always the right one

PRODUCTION director

By Laura Rance

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Co-operator editor

eep renting, or buy that land now before it gets even more expensive? Alberta farm management adviser Merle Good provided some perspective on that for an attentive crowd at the recent Ag Days event in Brandon. So far, it’s been a truism that farmland is a good investment. That’s not to say it is always the right investment or that land values never go down. They do. But the last time that happened was more than 20 years ago. Now there is speculation that the meteoric rise in values in recent years has peaked. One indicator is how farmland prices compare if you use the same price-to-earnings ratio used to assess stock market values. Good says that over time, they should correlate. Right now, land prices are at a premium. Another measure is the cost of land relative to cash rents. Based on this calculation, the best time to buy land on the Canadian Prairies was in 1993 when land was 18 times the cash rent value. “Any time you can buy land at 20 times cash rent, back up the bus and buy it,” Good told the audience at Ag Days. Today, that ratio is 40 times the value of cash rent. All these indicators suggest some sort of adjustment is in order. But that still doesn’t make land a bad buy. Land value appreciation over the past three decades has consistently outperformed other investments, especially the stock market, by a factor of 1.5 to two times. Good noted this is a point worth highlighting

with a significant proportion of farmland about to pass on to a non-farming generation over the next few years. Taxation rules around capital gains tax add to its status as a favourable investment. “If I transfer land to a child, that person qualifies for the capital gains deduction whether they farm or not,” he said. Another truism has emerged within the past generation, and significantly changed the dynamics of operating a farm business. Historically, farmers owned their land. Today, farming is based on “access” to land through a combination of ownership and rental that could well be different for every farm operator. Some may own all of the land they farm; some may own none of it. Good and other farm advisers at Ag Days stressed neither those extremes or the various combinations in between are a recipe for success or failure. What matters is whether farmers are paying a fair and reasonable cost for accessing land, and whether the farm business is capable of supporting that cost. This is a complex issue, and one that farmers have traditionally done a poor job of analyzing. It’s largely because they have treated their status as a farm business operator as one and the same as their status as a real estate investor. This muddies two very different questions: whether a farmer can afford to buy more land, and whether his or her farm business can afford it. Buying land is an investment decision. It isn’t the same as determining whether buying, or renting, or expanding acres at all is the best strategy forward for the farm business. For example, has the farmer done everything pos-

sible to maximize returns from the existing land base? Yet all too often farm management decisions over land access are driven by the emotionally charged mantra — “buy now — they aren’t making more of it,” or by its geographical proximity. “It’s the next quarter. How can I not buy it?” “The difference between whether I can afford to buy land versus whether the business can afford to buy it is really, really, really important,” Good said. He said farmers can get an idea of whether land investment is a strategy worth considering by calculating their business’s “land access cost,” which is the sum of current land payments, future land payments, and land rental costs divided by the number of acres. Is it higher or lower than cash rents in the area? If it is higher than area cash rents, then the farmer needs to be able to demonstrate the business can support the land purchase through better-than-average productivity or marketing. If it is lower, the farm business can probably afford to buy. The other consideration that has become more complex in recent times is determining fair and reasonable values for cash rent. In the old days, there were two models available: crop share and cash rent. More recently, some new models for calculating fair rent values, sharing risk and determining what the farm business can afford to pay have emerged. Farmers would do well to review them before signing on the dotted line. If land values have peaked, rent values may be in for an adjustment as well. laura@fbcpublishing.com

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How not to fail at Twitter Five things I’ve learned from hashtag #farm365 so far By Stefan Signer

have recently realized how increasingly important it is that we farmers engage the consumers, tell our story, and educate about where our food comes from. This is not a traditional strength of farmers, but a task we must become proficient in, in our increasingly urban culture. I met Andrew Campbell, who is promoting “Ag-vocacy” and the need to educate and connect with the consumer. His project is to post a picture every day under the hashtag #farm365. It didn’t take long for animal rights activists and militant vegans to attack the positive message from farmers to consumers. And so my first lesson:

Activists are shameless

There is simply no “off limits.” In pursuit of a livestock-free utopia, the end justifies the means, and respect and decorum are cast aside. This frees them to rudely interrupt the Twitter conversation between farmers and consumers. Because society doesn’t share their beliefs, it necessitates the activists’ need to interject propaganda wherever possible. With two people discussing food and farming, it’s incredibly rude for someone to interrupt, calling the farmer a murderer. Yet, to activists on Twitter, it’s just the beginning. Animal agriculture is equated with the holocaust, rape, and exploitation. The target audience is the uninformed consumer, who has never seen a farm, and doesn’t see

the absurdity of the accusations. Activists are better at Twitter than farmers. When their message is not accepted they tend to get louder, nastier, and invent statistics. Vegans are claiming success in hijacking the #farm365 hashtag because the volume of activist tweets threatens to drown out the true message. Militant activists are better organized than farmers with a global network recruited to their cause. The negative tweets on #farm365 may outnumber the positive, but this does not mean failure. Our target audience is curious consumers who investigate both viewpoints. Activists use gruesome images of slaughter claiming to show animal abuse, but omit the context of the animal’s experience. In reality, their death is analogous to Tony Soprano’s, sudden and painless. Repeatedly showing bloody pictures, vegans try to associate that with food on your plate. However, just because something is unpleasant to watch, doesn’t make it wrong. Surgery is no less gory, but we accept it as a positive part of life. When this doesn’t work, activists just start inventing ‘facts.’ “One hamburger patty uses 2,000 gallons of water.” “A single farm produces more sewage than the city of Minneapolis.” “Without animal agriculture the world could sustain 100 billion people.” The list never ends, and the more sensationalist the better. The lack of factual or realistic basis is irrelevant; they know that repeating

misinformation can plant the seed. It takes too long to honestly address each accusation, so the lack of a response gets misconstrued as acceptance. It is only by collectively telling our story we can counter the misinformation.

ion animals. The noble role of farm animals is to provide us with meat, eggs, milk, and countless other products. It is our role to take care of them, give them a good life and painless death.

Society has made its decision

Farmers are quietly passionate, and when attacked, fiercely defensive of their brethren across the country. While direct confrontation is rarely useful, it is natural to respond when called a murderer, rapist, and abuser. I have seen many farmers get bogged down in an unwinnable debate with a fanatic. It is better to tune them out and focus energy on reaching those with sincere questions.

Animal rights isn’t really a movement or value system, it’s a religion invented by people who need a cause to feel morally superior. In a free country, one group imposing their dietary choices on others is intolerable, and so they associate the message to animal abuse. For this reason, we must remain vigilant against clear cases of animal abuse and neglect, and work to address farming practices that are indefensible in the public eye. We cannot afford to provide them with more ammunition. However the idea that animals can reason, think, and fear with human capacity is a fairy tale. Mothers mourn the loss of a baby because in her mind she lost a future with that child. The cow lacks this capacity. If a calf is stillborn or lost, the cow accepts this reality and driven by need — probably eats some hay. Animals have needs, not emotions. The doctrine that all animals are equal to humans is socially unacceptable. Companion animals have their place at one end of the spectrum, with pests at the other. Livestock are somewhere in between. Even the activist secretly believes this. They refuse to stand up for the millions of flies and mosquitoes exterminated daily. The role of pets is to be compan-

Farmers are easily rattled

We are making a difference

In our grandfathers’ day, almost everyone grew up on a farm or had a relative who did. But as the farming population shrinks, so also the public’s connection disappears. And so we are tasked with opening our barn doors and letting the world see what we do every day. It’s the spirit in which #farm365 was started, and is the spirit in which we will continue. The consumer is asking more questions about where food comes from. They want to hear from a farmer. Our job is to be polite, factual, and open. On Twitter we will certainly not be able to silence the #vegans, but in the eyes of the consumer, farmers and family farms are people with value and integrity. It is these strengths we must continue to uphold. Stefan Signer is a dairy farmer from Kleefeld, Man.

ALBERTAFARMEXPRESS.CA • FEBRUARY 2, 2015

Oil price plunge will affect Alberta agriculture and the beef sector The loonie has followed oil prices down and this will impact everything from feeder prices to packing plant utilization By Fred Hays

he price of crude oil has fallen a long way since hitting $110 in July 2013 — and the debate on how long this drop will last, and what it will do to the economy, will continue for some time to come. The plunge in oil prices will create winners and losers — the question is whether Alberta agriculture and the beef sector will be in the former or latter category. The fall in prices obviously impacts the bottom lines of oil companies, and large-scale layoffs are already underway. Communities dependent on oil production will be hit hard, as will the Alberta government, which loses $215 million in royalties for every $1 drop in the price of a barrel of oil. New spending on health programs, roads, schools, and other government investment will likely be frozen. The drop in oil prices has also affected the value of the Canadian dollar and this directly impacts food and agriculture. Anything that is imported will cost more, including fruits, vegetables, imported distillers dried grains for cattle feeding, and imported beef from the U.S. For some this is good, for others not so good. For example, this will make Canadian beef slaughter cattle more competitive

and favour movement of finished cattle to the U.S. This increases the vulnerability of Alberta’s two major packers even more than they are now. Among the winners are consumers who, depending on the amount of gasoline used, could see their monthly disposable income increase $100 or more — tax-free gains that can either be saved or spent on goods and services. There is some suggestion that transport costs for goods may decrease, although this has been slow to see. The lower dollar will increase demand for Canadian export products, including beef, as lower oil prices should also help stimulate the U.S. economy, reviving both employment and business activity. This further increases individual’s purchasing power, including that for food and beef products. On the downside, the U.S. economy may be slowing somewhat and a rise in interest rates would also be negative as Americans have more personal debt than Canadians. Now, what about the cattle sector? Do lowered crude prices reduce domestic food prices? Do lowered food prices reduce beef commodity prices? The Bank of Canada has looked at the effects of increased buying power on local food industries flowing through to agriculture commodities. However, these

have been done on food-commodity relationships during six-year periods or more. Even with these studies, there was limited correlation of the dollar flow and beef food purchases affecting the price of the fed cattle and replacement cattle prices. There was more volatility coming from other variables, such as overall inflation. The crude oil price decreases will probably have minimal effect, if any, on direct domestic cattle prices. But exchange rates are something else. Alberta has 40 per cent of the country’s beef cow herd and finishes about 70 per cent of the fed cattle in Canada. Overall, 44 per cent of Canada’s beef is exported as cattle or meat. During 2013, Canada exported 309,000 feeders (eight per cent of total) and 337,000 slaughter cattle (18 per cent of total) to the U.S. By 2014, this increased to 438,000 feeders (11 per cent) and 381,000 slaughter cattle (an extra 44,000 head) given the relatively stronger dollar. Export beef will have a relatively better market in the U.S. with the decreasing dollar. This will help the cattle and processing sectors. However, an increase in interest rates in the U.S. would reduce demand of some foods, including beef. An Informa Economics report prepared in 2006 showed that a 0.97 per cent

Big Drop

decrease in the U.S.-Canadian dollar exchange rate led to a one per cent increase in local Canadian fed cattle price. Feeder prices were based on fed cattle price and grain price. Feeder prices would also be expected to increase. The absolute relationship may be presently somewhat different than the 2006 estimate, but the pricing direction would be expected to be similar. This is good for both groups, however, replacements will cost feedlots more with a reduced dollar. With these dynamics export of feeder and slaughter cattle to the U.S. would be expected to go beyond the 2013 and 2014 levels. The reduced crude oil price may go on for some time. However, oil analysts suggest that even OPEC (the Organization of the Petroleum Exporting Countries) will start reducing production levels at some point to allow oil prices to increase again. Individual OPEC countries need high oil revenues to balance their budgets. (For example, Kuwait needs a break-even of about $66 per barrel, Saudi Arabia $98, and Venezuela about $113.) So many analysts expect there will be a rebound in prices in the coming year, but until that happens there will be impacts on Alberta’s agriculture and beef sectors. Fred Hays is a policy analyst with Alberta Beef Producers. These are his views and do not necessarily reflect those of Alberta Beef Producers.

It’s a shame that Canada imports more food products than it exports Canada should look to countries like the Netherlands, which is a leading exporter of roasted coffee even though it doesn’t grow coffee beans By brenda schoepp af columnist

anada’s agri-food trade profile continues to be in deficit. As the demand for specific items heats up around the globe, it’s apparent that a rethinking of our processing, value adding and export aggression is long overdue. Considering the low value of the Canadian currency, this is an opportune time to push our products onto the world stage. Why is this important? A nation dependent on the sale of commodities rather than consumer products is a nation of farmers mining for those that realize large margins by processing and further value adding. There is a huge difference between the price of a bushel of wheat and a loaf of bread or between the price of ground beef and a highend burger offering at a bistro. There are many fantastic global examples of value adding, and I often think of the Netherlands, which is one of the world’s largest exporters of roasted coffee. The

nation doesn’t grow coffee but it imports the commodity and adds value. Canada does this with chocolate. Just as Brazil’s coffee is value added outside of the country, Canada’s commodities are often sent somewhere else for processing and value adding. Canada is the world’s 11th-largest exporter of all goods, bringing the value per person to nearly $14,000. We are an agri-food trade-dependent nation yet the degree at which we add value to commodities across Canada varies by region. In Ontario and Quebec, more than 65 per cent of agricultural production is processed and sold as a value-added product, while the West struggles at 40 per cent or less. Quebec bakeries are using Quebec flour while Alberta wheat goes to China, Japan, Iran, South Korea and the U.S. As for beef, having a market for live animals to the U.S. restricts the desire to value add in country. The safety valve of live exports may seem appropriate but any interruption in trade becomes absolutely devastating when added value is absent.

The food-processing industry, led by Ontario and Quebec, has a strong domestic presence when it comes to GDP. Food processing is the No. 1 manufacturing employer in Canada and the greatest manufacturing contributor to GDP. Getting there is one thing but staying there is another. The agri-food trade deficit is a big concern because it indicates that we import more food products than we export. Canada is one of the top 10 importers of food in the world. As a nation that has almost everything, we have to ask ourselves why we continue to lean on imports rather than value add to the export profile and eliminate that deficit (now estimated to be near $9 billion per year). Small and medium enterprises provide 84 per cent of food manufacturing in Canada. Their challenge is to remain viable with a rather restrictive regulatory environment, restrained access to domestic product for processing, especially those that are supply managed, and to grow on to the global stage. When

it comes to value adding, we need visionary leaders and a distinct point of differentiation. I have toured many food-processing and value-added facilities, and the one that remains clear in my mind was a gourmet cake bakery in Alberta. The pallets of ingredients for baking did not include one Canadian ingredient, because they either could not access it domestically or it was cheaper to import. Other countries also struggle. Italy focuses on domestic consumption and is regionally divided when it comes to food. The country is failing on the global stage when it comes to exports and because of the regional protectionism and lack of production for global players, domestic food manufacturers are prone to suffer along with the economy. The exceptions lie in the companies such as Corsini that have adapted to their international customers’ needs, such as bigger biscotti for big cups of coffee and different recipes that clients can brand as their own. In a recent article, the Economist noted ready-made pasta dishes

from Barilla changed the outlook for that company by meeting the needs of the consumer of the day, particularly in China. Getting global exposure also means reaching out to those on the outside and taking the time to talk trade. In Canada, the age of trade liberalization sets the stage for these dialogues. Processing is a great economic generator for communities and rural communities often host these businesses. Ensuring they have visionary leadership, an ability to differentiate, and the supportive infrastructure they need in terms of transportation, regulation, access to domestic supply and domestic and foreign labour is fundamental to their success. We have what it takes for a balanced trade profile. How we get there is up to us. Brenda Schoepp is a farmer from Alberta who works as an international mentor and motivational speaker. She can be contacted through her website www. brendaschoepp.com. All rights reserved. Brenda Schoepp 2014

Off the front

CHECKOFF } from page 1 “The producers who attended those meetings gave the message that they supported the national beef strategy and they recognized that there needed to be an increase in the national levy,” said Smith. Specifically producers said they were in favour of making the $2-perhead service charge non-refundable, and bringing in a mandatory $1 provincial levy to match the $1 national one. The organization then approved that call at its annual general meeting. “There’s a pretty widespread understanding across Canada that our industry does not have a sufficient level of funding,” said Smith, adding Ontario and Manitoba recently increased their provincial service charges. The service charge has been a sore point ever since it was made refundable in 2010 when George Groeneveld was agriculture minister. Each dollar of the levy adds up to about $3.5 million, so the $2 charge is worth about $7 million. But Alberta Beef Producers had to hand back $2.4 million of that money in 2013-14 — with the lion’s share, $2.1 million, going to feedlots. Most of the feedlots seeking refunds are larger operations and they haven’t been swayed by behind-the-scenes requests to leave that money with ABP.

February 2, 2015 • Albertafarmexpress.ca

“It’s something that we’ve talked about, to see if there are things we can do as an organization that we can do to leave their money in,” said Smith. “To this point, we haven’t been successful.” So now the organization will head to the Agricultural Products Marketing Council to ask for the necessary legislative and bylaw changes to make the service charge non-refundable.

Long process

That process is long and involved, but ABP directors will also try to convince Agriculture Minister Verlyn Olson that a lack of funding is not only harming their organization, but holding back the entire cattle sector. Higher cattle prices have not only made the levy more affordable, but made producers more optimistic, said Smith. “I think people are looking and seeing opportunities in the beef industry, and we don’t want to miss these opportunities because we didn’t provide enough funding to industry organizations to help open export markets or do research that would enhance productivity,” he said. Smith pointed to the recently released national beef strategy that, among other things, calls for a 15 per cent improvement in both production efficiency and carcass cut-out

value by 2020 and also upping efforts to connect with consumers. “When you talk to the people who are writing the strategy, they say that we’re going to have to increase the national levy beyond the $1 range to put enough money into marketing, research, and policy work to get everything done,” said Smith. Some have suggested a levy of $2.50 is needed to implement the national strategy (available at www. beefstrategy.com), which has not only been endorsed by provincial and national cattle groups, but also the National Cattle Feeders’ Association. Having to hand back more than $2 million every year is also squeezing ABP’s finances. It had an operating deficit of $754,000 in the fiscal year ending March 31, 2014, and an operating deficit of $539,000 in the previous year. The organization has been relying on reserves to bridge the gap and still be able to fund efforts such as the battle to overturn Washington’s country-of-origin labelling law. “We’re not running an operating deficit in the sense that we’re committing in our budget more money than we have,” said Smith. “This is a deficit that represents the budget we set that year, but also previous commitments we’d made.”

“There’s a pretty widespread understanding across Canada that our industry does not have a sufficient level of funding.” Rich Smith

akienlen@fbcpublishing.com

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New forage research papers available online Three new papers look at tall fescue, barley after perennial forages, and slender wheat grass Alberta Agriculture and Rural Development release

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he website www. foragebeef.ca has added some new research papers to its collection. Yield and nutritive value of irrigated tall fescue compared with orchardgrass: In monocultures or mixed with alfalfa. This work is by Donald Thompson of Agriculture and Agri-Food Canada, Lethbridge Research Centre and can be found in the Grasses folder. Barley yield and nutrient uptake in rotation after perennial forages in the semiarid prairie region of Saskatchewan has been placed into the Soil Improvement folder. This work was done by P.G. Jefferson (Western Beef Development Centre); F. Selles (AAFC, Brandon), R.P. Zentner and R.B. Muri (AAFC, Swift Current), and R. Lemke (AAFC, Saskatoon). Predicting seed germination of slender wheat grass [Elymus trachycaulus (Link) Gould subsp. trachycaulus] using thermal and hydro time models has been placed into the Seed Production folder. This work is from M.P. Schellenberg and B. Biligetu (Semi-arid Prairie Agricultural Research Centre, AAFC, Swift Current) and Y. Wei (University of Saskatchewan).

Albertafarmexpress.ca • February 2, 2015

Hungry herd

No, this is not an elk farm. This herd was just passing through the pasture fields, on a ranch between Okotoks and Turner Valley. Wildlife damage usually increases in late winter as hunger makes wildlife more bold, said Charity Wallace of Alberta Environment and Sustainable Resource Development. Limiting access to food sources, like bales and grain, is the best protection while your local Fish and Wildlife officer can offer specific advice on mitigating damage on your operation, she said. Photo: Wendy Dudley SEC-STETT15-T_AFE.qxd

1/22/15

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FEBRUARY 2, 2015 • ALBERTAFARMEXPRESS.CA

Alberta Federation of Agriculture aims to offer ‘unified voice’ for farmers Focus is on issues that can impact the day to day of a farmer’s operation By Jennifer Blair af staff

ose to the grindstone’ is a good way to describe how the folks at the Alberta Federation of Agriculture have been working since the group’s rebrand in the summer of 2013. “We’re involved in agriculture in all of its different aspects,” said board chair Lynn Jacobson, who farms near Enchant. “We’re trying to give another voice for some of these guys in Alberta.” With roughly 400 members, including farmers and farm associations, the federation has continued to build on the work it did as Wildrose Agricultural Producers — a name that caused “confusion” once the Wildrose Alliance Party entered the political scene, he said. The organization works on “all issues” in agriculture, including transportation, plant breeding, farm safety, surface rights, and

‘

other matters. But rather than duplicate the efforts of other groups, the federation tries to act as a “central hub” that co-ordinates the diverse voices of Alberta’s farmers, said Jacobson. “We try not to overlap too much with some of the work that the commissions in Alberta do,” he said. “We’ve all got limited resources, so there’s no use duplicating a lot of this.” Co-ordinating that “unified voice” — on both a provincial and national level — has made the organization “fairly effective,” said Jacobson. “If you’ve got too many groups and they’re all speaking on different subjects, they’re not co-ordinated, and lots of times, there’s even conflicting ideas on subjects,” he said. “That really doesn’t help agriculture. The government thinks it can do what it wants then, and there’s no pressure on it to fix the issues.” The federation also deals with

issues — such as child labour legislation, crop insurance boundary changes, and governmental policy changes — that can impact the day to day of a farmer’s operation, he said. “All in all, we’ve been successful in representing producers’ needs,” said Jacobson. “We make little steps all the time. It’s the little things that add up.” But their progress has been hampered by limited buy-in from producers and some of the larger commissions, like Alberta Barley and Albert Wheat, he said. “Sometimes, they don’t see the value in joining us,” said Jacobson. “If we could increase our staff a little more, that would help us do more for producers. We don’t have the resources to do everything at once.” But as a farmer himself, Jacobson sees the value in having a “more inclusive” organization that represents the needs of all farmers. “We have an avenue to partner

Lynn Jacobson with a lot more diversified agriculture producers and bring that voice forward as a unified voice,” he said. “It gives us a voice on a lot of different subjects that are quite

different than what the commissions deal with. There’s a lot more to agriculture.” jennifer.blair@fbcpublishing.com

Farm group calls for more research dollars The Alberta Federation of Agriculture wants the province to reinstate the cancelled Agriculture and Food Innovation Endowment fund By Jennifer Blair af staff / red deer

lummeting oil revenues are blowing a big hole in the provincial budget, but the Alberta Federation of Agriculture says that’s all the more reason to increase funding for ag research. Attendees at the group’s annual general meeting last month passed a resolution calling on the province to increase, rather than cut, ag research funding, and to reinstate the cancelled Agriculture and Food Innovation Endowment fund. “Agriculture has been a driving force in this province for much longer than the oil industry has,” said Humphrey Banack, a producer from Round Hill and the federation’s second vice-president. “For us to see a changing investment in this industry is very difficult to manage. We need to continue this steady pace of investment. Now’s not the time to hold back.” “It’s been shown over and over again that for every dollar you invest in agriculture research, you get a tenfold return,” Hughenden producer and first vice-president Keith Degenhardt said in support of the resolution. “The reinstatement of the Agriculture and Food Innovation Endowment fund is very critical to keeping that investment going.” The Agriculture and Food Innovation Endowment fund, which earmarked $200 million for innovative ag research, was quietly scrapped just before Christmas as part of govern-

ment belt tightening. There were many “excellent initiatives” being considered for funding from the endowment, but the province needs to practise restraint, said Agriculture Minister Verlyn Olson. But other provinces have weathered similar storms by reinvesting in agriculture, Taber farmer Gerald Third said at the federation’s meeting. When potash prices crumbled in 2013, “the revenue stream that the Saskatchewan government depended on was significantly and negatively impacted,” said Third. “That government, at that point in time, was faced with a challenge. And what it did was approach its agriculture industry with a move to double its financial viability... so that it would have a stabilizing influence on the economy and an income base it could draw on virtually ad infinitum.” Manitoba has also looked to its food sector to overcome “significant financial challenges,” by encouraging growth in its volume of food processing to $5.5 billion a year by 2020, he said. “I would like to see the Alberta government adopt a strategy that utilizes both Alberta’s primary agriculture producers and its processors to help bring the economy stability and the income that it needs in order for it to move forward,” said Third. “Cutting back is not an answer. Stop-gap, short-term financial solutions are not an answer. We need a long-term, stabilized investment plan in rural Alberta.” jennifer.blair@fbcpublishing.com

HOT.

COLD.

BIG.

Albertafarmexpress.ca • February 2, 2015

Rimbey Agricultural Society’s new multi-purpose facility set to open The 60,000-square-foot facility will host horse events, sales, 4-H shows and various other activities Agrim Centre release

imbey’s new $5.9-million multi-purpose facility, the Agrim Centre, is nearly complete. “We’ve taken our first event bookings, and are looking for more,” said Tim Edge, president of the Rimbey Agricultural Society. “We’ve had a lot of interest in using the building already, so we wanted to get the word out that we are accepting bookings now.” Construction began in the summer of 2013, and all the exterior walls, doors and windows are now in place. Work is underway on the interior of the 60,000-square-foot building. “We’re planning to be operational the first of April,” said society vice-president Ken Whitelock. “We have a lot of construction to do inside to meet that date, but it’s going to happen.” The parking lot is ready, and the sand is in the riding arena, waiting to be mixed and laid down after the heaters and fans are installed.

SMALL.

While the kitchen and boardrooms won’t be finished, and bathroom facilities are limited, the organization is ready to receive riders, sales, 4-H shows and various other activities. The society also plans to repurpose the older facilities on their grounds into indoor box stalling, as funds allow. Completion of phase one is close to 75 per cent debt free, and there is enough money in the bank to cover an entire year of mortgage payments, said Edge, adding the society is still seeking partnering sponsors. The first booking is the fourth annual Ranch Horse Round Up Sale (www.ranchhorseroundup. com) on April 25 in the facility. “For me, it’s going to be a turnkey operation,” said sales manager Cory Glenn. “You walk in and everything you need is going to be there. They’ve put in a 30-foot door, which is the biggest one in Alberta. The facility is set up to accommodate anything you really want to do. You’re not going to have to do a lot of work to be able to put your functions on.”

The new $5.9-million Agrim Centre will be operational by April 1. Photo: Rimbey Agricultural Society The Great Canadian Performance Horse Sale will be held May 1-2, and several other events, such as 4-H shows, bull sales, team pen-

EARLY.

LATE.

nings, team ropings and mounted shooting competitions, have already secured their appearance in the building.

Consumers are richer, but their diets likely won’t be Consumers will have more cash to spend, but very little will go towards bumping up their food spending By Jennifer Blair af staff

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Consumers are starting the year with a little more jingle in their jeans thanks to the drop in oil prices. “About six or seven per cent of people’s spending in a year is just on gasoline,” said Michael Burt, director of industrial economic trends with the Conference Board of Canada.

“Food, in general, is a fairly stable consumer item. We don’t see big swings in the amount of money that people spend on food.”

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ucts that cost a little more because of the way they are produced? Very little, said Burt. “Food, in general, is a fairly stable consumer item,” he said. “We don’t see big swings in the amount of money that people spend on food.” When money is tight, people tend to cut back on quality — buying ground beef instead of steak, for instance — but in general, people trim other areas of their budget before cutting back on food spending. And when times are good, food spending is typically the last thing that gets increased. “There is a small improvement in consumer spending on food when times are good, but it tends to be more cyclical things, like cars, that see much bigger ups and downs depending on economic conditions,” said Burt. Consumers may start to shift from “commoditybased items” to “higherquality, higher-priced” foods, like implant-free beef or organic produce, but the shift should be minor. “It’s possible that there could be a benefit for food, but I wouldn’t overstate it. It’s likely to be very small.”

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“If you’re suddenly giving people back two or three per cent of their expenditures, they’re able to spend on other things.” So what kind of a bump might that mean for local food, particularly prod-

jennifer.blair@fbcpublishing.com

NEWS » Markets

}learn i ng

FEBRUARY 2, 2015 • ALBERTAFARMEXPRESS.CA

Freshen up your marketing skills

Getting on the menu

The Alberta Farm Fresh School 2015 takes place Feb. 26-27 at the Pomeroy Inn and Suites on the Olds College campus. “This annual school is the perfect place to learn more about directmarket production and marketing of fruit, vegetables and livestock, as well as connect with producer peers and experts,” said Rob Spencer, provincial commercial horticulture specialist. The school features a direct-market livestock presentation stream on the first day and linked horticulture and direct-market sessions on the second day. For more info, visit www.albertafarmfresh.com. — AARD release

Getting Into Local Restaurants takes place Feb. 9 at the Agri-Food Business Centre in Leduc. “You will meet two chefs and the local producers who supply them, discover what chefs look for in a local food product, explore techniques for getting in the restaurant door and establishing a strong business relationship, and learn about plate costs, price ceilings and payment schedules,” said Melisa Zapisocky, of the Explore Local initiative. The cost is $25 per person (includes lunch). For more info, contact Delores Serafin at delores.serafin@gov.ab.ca or 780-427-4611. — AARD release

Canola values rising in theory, cheaper in practice WILD CARD } South America’s crop prospects are dragging on corn and soy By Phil Franz-Warkentin

CE Futures Canada canola contracts moved higher during the week ended Jan. 23, but the strength had little to do with anything fundamental for the commodity. Rather, the story of the week was focused solely on the Canadian dollar. The currency fell by three cents alone during the week, and has lost six cents relative to its U.S. counterpart over the past month. At about US80.5 cents, the Canadian dollar is at its weakest levels since 2009. In addition to the continued weakness in crude oil, a surprising move by the Bank of Canada to cut interest rates contributed to the drop in the currency. March canola ended the week at C$461.50 per tonne, up by $10.90 compared to the previous week. However, on a U.S. dollar basis, canola actually lost ground. On Jan. 16, when canola closed at C$450.60, the currency was still worth US83.5 cents, which translates out to a tonne of canola at about US$376. Doing the same calculation a week later, with canola at C$461.50 and the dollar at US80.5 cents, it works out to about US$371 per tonne. As a result, canola may be up in theory, but is actually cheaper for international buyers pricing in U.S. dollars. Another interesting development in the canola market during the week was the narrowingin of the March/May spread. The front month has been trading at a premium to the more deferred positions, but that inverted relationship is starting to erode. Line companies were shifting their basis contracts over to May, partially in an effort to ensure delivery moving into the spring. In the U.S., soybeans and wheat futures were down during the week, but corn managed to finish steady to a bit higher in many months. Major technical and fundamental trends are pointing lower in both corn and beans, especially as South American crop prospects remain relatively favourable. While reports of some dryness emerged from parts of Brazil, the continent overall is still expected to have large crops, which are already starting to displace higherpriced U.S. stocks in the export market.

Photo: Thinkstock For wheat, global economic uncertainty is a key factor in the background, with renewed Ukraine/Russia tensions also important to keep in mind. U.S. wheat does remain overpriced in the international market, but if there are logistics problems, or export restrictions elsewhere, the buying interest will come back. North American weather conditions also have the

potential to provide some direction for wheat, as mild temperatures across many winter wheat-growing regions are raising some concerns over early emergence and possible damage, if/when the mercury drops. Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

For three-times-daily market reports from Resource News International, visit “ICE Futures Canada updates” at www.albertafarmexpress.ca.

ALBERTAFARMEXPRESS.CA • FEBRUARY 2, 2015

Low ocean freight rates benefit farmers Key measure of ocean freight rates has dropped significantly over the past couple of months By Terryn Shiells

Commodity News Service Canada

Western Canadian grain farmers are expected to benefit from recent lower ocean freight rates. The Baltic Dry Index (BDI), a measurement of ocean freight rates, has dropped significantly over the past couple of months. The BDI was quoted at 749 points on Jan. 16, up from a low of 709 points seen earlier in the month, but well off November highs of 1,456 points. “Our export customers, ultimately they care most about what it costs to pay for something landed in their ports, and so the cheaper that you can get it there, the easier it is for companies to back some of that into higher prices for growers,” Jonathon Driedger, market analyst with FarmLink Marketing Solutions, said. “It’s not an apples to apples, penny for penny-type thing. But it cheapens the ability to move grain around, and of course transportation costs is a huge part of getting grain into end-use markets.” The lower cost also makes Canadian grain more competitive and levels the playing field with other countries that sell similar products into Asia, such as Australia. One contributing factor to the lower shipping rates has been the drop in crude oil, as it reduces fuel costs to run the big ships. But, the main thing that impacts ocean freight rates is supply and demand, according to Driedger. “Ultimately it’s a combination of how much shipping capacity is there, compared to how much people want to export. Things like a weakening global economy, some concerns about China and other developing markets not growing as fast, and the recession in Europe, Japan, help reduce demand for stuff in general. So, that helps maybe free up some capacity which lowers freight rates,” he added. Though the export pace for Canadian crops, including wheat, canola and pulses, has been strong so far this year, it’s not necessarily because of the lower ocean freight rates. “I don’t think it would be fair to make that direct a connection because there are a lot of things that impact export demand,” said Driedger. “There have been years when freight has been expensive and we’ve exported a lot of grain, so there are a lot of different moving parts.” According to data from the Canadian Grain Commission, exports of Canadian grain for 2014-15 totalled 18.956 million tonnes as of Jan. 11, up from 16.638 million tonnes at the same time a year ago.

Ontario student develops bioherbicide Garlic mustard properties prevent seeds from germinating; they might treat malaria too By Lilian Schaer, AgInnovation Ontario

hen Jessie MacAlpine was in Grade 10, she learned that garlic mustard is considered a problem weed in Canada because it produces a chemical that keeps seeds from germinating. Intrigued by the possibilities, she spent the next two years researching and developing a herbicide based on an aqueous extract of that invasive species — and won the gold medal at the Canada-wide science fair two years in a row for her efforts. “The bioherbicide is broad spectrum, extremely effective but nontoxic, and inexpensive to produce,” said MacAlpine, who is originally from Woodstock and is now in her second year of microbiology and computer science studies at the University of Toronto. Because it inhibits germination of all seeds, not just weeds, it could be ideally suited for farmers who

transplant seedlings propagated in greenhouses or who are in the turf business, for example. The product has been effective on everything she’s tested it on, including during small-scale field trials using corn and soybeans. It’s something that needs further research, though, and she’s hoping to find a commercial partner to help her with that. A project in Grade 11 that involved sending mosquito nets overseas to help combat malaria made her wonder if her bioherbicide research couldn’t have human health applications too — as a treatment against a disease that killed 627,000 people worldwide in 2012, according to World Health Organization statistics. She found a possible solution in mustard oil, which contains the most highly concentrated form of the natural chemical she found in the garlic mustard, and is produced and used as cooking oil in many malaria-endemic countries.

Student inventor Jessie MacAlpine Heat disrupts the oil’s chemical composition, which makes it less effective at treating malaria when it’s been cooked, but ingesting the raw oil could treat the disease, she says. “The raw form is where the antimalaria properties are, and why we haven’t seen this in the past. Because they use the oil to cook, they’re not seeing that effect,” she explains.

The oil could be taken in liquid or pill form, and early research results are showing that a dose of 10 mg per person might be a sufficient treatment. Canadian farmers shouldn’t rush out to plant a lot of mustard acreage just yet, though. Mustard oil is cheap to produce in countries like China, India and Brazil, so $30 could buy about 10 million doses and producing it locally where it is needed to combat malaria would be more cost effective than producing it in higher-cost countries like Canada and then exporting it, MacAlpine says. So far, her malaria research is still very preliminary, but it has garnered her some prestigious awards, including the International Co-operation Prize at the European Union Contest for Young Scientists, Best in Category at the Intel International Science and Engineering Fair, and Canada’s Top 20 under 20 in 2014.

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news » livestock

FEBRUARY 2, 2015 • ALBERTAFARMEXPRESS.CA

New online ranching tool

Feed yards scale back

A new web page, www.bodyconditionscoring.ca, shows how to easily measure fat cover for beef cows. It also has an interactive tool showing the benefits of proper body condition in terms of reproductive performance, calf health, and weaning weights and nutritional information on getting and keeping animals in the right condition. “Many producers don’t realize how much thin or overfat cows hurt their bottom lines, and how easy and effective body condition scoring is when figuring out how to adjust rations,” said Karin Schmid of Alberta Beef Producers. — Beef Cattle Research Council release

The number of cattle placed in U.S. feedlots in December fell by more than expected compared to last year. A USDA report said feed yards bought fewer calves for fattening, noting that expensive feed and pricey calves wore down margins. Ranchers held back heifers to rebuild the U.S. cattle herd, now at a 63-year low after several years of drought hurt crops, analysts said. The report showed December placements at 1.544 million head, which was down eight per cent from 1.679 million last year and twice what analysts had expected. The feedlot cattle supply was pegged at 10.690 million head. — Reuters

Devilish dollar: What’s good for producers may mean more pain for packers Cargill and JBS plants in Alberta need more cattle, but a low dollar makes it harder to get them and also has some negatives for feedlots By Alexis Kienlen af staff

low dollar means double trouble for Alberta’s big packers — and puts stress on feedlots, too. “In 2015, with smaller cattle numbers and bigger exports, we’re going to see some pressure on our packing plants and feedlots to stay better utilized,” said Brian Perillat, senior analyst and manager with CanFax. Despite its shrinking herd, Canada still exported over a million cattle in 2014, putting more pressure on Cargill’s High River plant and JBS’s Brooks facility, which are both running well below capacity. “The projection right now is that both packers in the country are not doing all that well because of throughput dynamics,” said Fred Hays, policy analyst with Alberta Beef Producers. “T h e re a r e t w o t h i n g s w o r k i n g against (the packers) — the costs that they’re paying for cattle and the numbers that are going through their system. That’s pulling down potential profitability.” “We want to be as competitive as we can to keep the cattle here,” added Perillat. “It would be better to keep the cattle fed and processed in Canada. Seeing a lot of them go south is a bit concerning.” A bigger herd would help, but heifer retention has yet to climb significantly, with cow-calf producers opting to repair a balance sheet ravaged by years of low prices and high costs. “It’s starting to turn around, but they’re projecting now that it will be into 2016 before we’ll see any upward trend in the herd,” said Hays.

Need to compete

And it’s not just a problem for packers, as losing one of the two Alberta plants — which together account for more than 80 per cent of the country’s processing capacity — would be a disaster for the entire beef sector. “We have processing capacity in Canada that we are not using,” said Rich Smith, executive director of Alberta Beef Producers. “We need to make sure that we do whatever we can to ensure that the processing sector in Alberta is competitive with the U.S., so they can compete with U.S. buyers for Canadian cattle.”

Brian Perillat

Fred Hays

Part of the competitive equation is the greater regulatory burden in Canada and a shortage of workers, something the beef industry has been trying to address, even before the dollar took a dive, said Smith. The low Canadian dollar helps offset those higher costs, but the flip side is that Canadian cattle are now cheaper in U.S. dollars, and that ups the competition from south of the border. That’s OK as long as it doesn’t go on too long, said Smith. “The reduced value of the Canadian dollar helps sell exports, which in the short term, helps create more benefit than harm for cattle sales,” he said. Calf and fed cattle prices — which went up 40 to 60 per cent last year — has many in the industry worried about push-back from consumers, who have cheaper protein options in poultry and pork.

but going forward, they’re going to see some pressure because of greater competition out of the U.S. and less cattle around,” said Perillat. About 70 per cent of the Canadian feedlot industry is located in Alberta. “These people will have to compete with each other and with the U.S. on purchasing calves,” said Hays. “Their expenses are going to be higher. They’re going to have to market into a marketplace which is fairly competitive. Their opportunities are not as good, but they’re still good.” On the sales side, the low dollar makes for a mixed bag — there’s a good market for finished cattle in the U.S., but American feeders are aggressively bidding for feeder cattle here. That is “putting limitations on feedlot size for getting numbers,” said Hays. As with the packers, the big issue for feedlots is making productive use of their infrastructure. The more cattle you put through a packing plant or feedlot, the lower the fixed cost per animal. Most of the time, feedlots operate at a 70 to 80 per cent fill capacity, with overhead costs that include maintaining a facility and a staff, said Hays. Once utilization slips down to 60 per

Big Drop

Feeders impacted

The high cost of cattle is also a concern for feeders, and they also have to deal with negative impacts from a low dollar. U.S. corn and DDGs are more expensive and that props up feed grain values here, which hurts margins for feedlots. “They came off a great year in 2014,

Rich Smith

“It would be better to keep the cattle fed and processed in Canada. Seeing a lot of them go south is a bit concerning.”

Brian Perillat

cent, feeders can feel serious cash flow pain and that, in turn, reduces their capacity to bid for cattle — which can start a downward spiral. Once a feedlot is down to 50 per cent capacity, said Hays, it’s tough to keep the doors open. That’s exactly what happened in 2007 when many feedlots across the country closed, he said. “Feedlots need a high throughput coming through,” said Hays. “If things continue the same way, their margins will be reduced. Smaller feedlots cannot be as competitive as larger ones, so the smaller ones tend to shut down.” akienlen@fbcpublishing.com

ALBERTAFARMEXPRESS.CA • FEBRUARY 2, 2015

New BIXS boss wants beef industry to help revamp — and fund — database Hubert Lau says he hopes industry partners will help ‘build models where everybody wins’ By Alexis Kienlen af staff

he new operators of BIXS aren’t interested in reinventing the wheel, but want to partner with industry to take the livestock database to the next level. And while funding for the latest revamp of the Beef InfoXchange System is still being worked out, the money likely won’t come out of farmers’ pockets, said Hubert Lau, executive vice-president of ViewTrak and CEO of the joint venture that will operate BIXS. “Ultimately what I don’t want is to have a situation where producers are always going to get hit with the money side of things,” said Lau. “I don’t have the answer, but my hope is that we’ll have discussions with different industry partners to create a model that makes BIXS viable for the long term.” ViewTrak, an Edmonton-based technology and traceability company, partnered with the Canadian Cattleman’s Association to take over BIXS in December. The new joint venture wants to work with software developers who have created similar, but more detailed, databases for the feedlot industry to improve BIXS. “It doesn’t make sense to do everything from scratch,” said Lau. “What makes sense is to try and build models where everybody wins.” Getting more cow-calf producers to use BIXS is critical to its future, but to do that the system needs to provide more detailed calf-to-carcass data in a user-friendly way that allows producers to profitably adjust their management and breeding programs. Lau has been meeting with software companies that have created that sort of system for feedlots and others in the beef supply chain. He is also talking to members of the Canadian Roundtable for Sustainable Beef, which wants to see an industrywide database that will combine production information with data on things such as animal welfare and environmental stewardship. The company is currently exploring two or three different funding models for a revamped BIXS, said Lau. “What we’re trying to do is verify whether or not the industry partners will support us with those models,” he said. “It doesn’t matter what we think in

“It doesn’t matter what we think in our office. Ultimately, it’s a collaboration and everyone has to buy into it or it won’t work.”

Hubert Lau

our office. Ultimately, it’s a collaboration and everyone has to buy into it or it won’t work.” Some individual producers have been consulted on plans for the new BIXS, and Lau said wider producer consultations will be held in the near future. “Alberta Ag will be putting together a road show in the middle of February, so I will be on tour to talk to people, look them in the eye and hear what they have to say,” he said. ViewTrak’s development team has also met with Arcurve, the software company that originally developed BIXS 2.0, to compare notes and technical information, he said. akienlen@fbcpublishing.com

ViewTrak’s Hubert Lau is searching for industry partners to revamp and fund the next version of BIXS. Photo: supplied

2015 Conference Sessions Feed – Improving the Quality and Efficiency of Production Pre-Confernce Workshop | Full Day | Various Presenters 20/20 Foresight: Next Decade & Beyond for the Global Meat Industry Bob Treadway Wednesday, February 18th 8:00 am Registration 9:30 am Pre-Conference Workshop 6:00 pm Tradeshow Dinner & Welcome Reception | Sponsored by Alltech & John Deere Thursday, February 19th 8:15 am Keynote Address 8:30 am 20/20 Foresight: Next Decade & Beyond for the Global Meat Industry 9:30 am Canadian Beef Advisors 10:30 am Coffee 11:00 am Make it Canadian 12:00 pm Lunch 1:00 pm Innovation at its Best: Using Genomic Testing in Commercial Ranch Selection 2:00 pm Coffee 2:30 pm Lessons Learned & Opportunities for Growth 3:30 pm If I Can 6:30 pm Taste of Alberta Banquet Friday, February 20th 9:00 am Through the Eyes of Our Consumers 10:00 am Coffee 10:30 am McDonald’s & Sustainable Beef: Perspectives and Approaches 11:30 am Cattle Markets and Steaks Need Context

Canadian Beef Advisors - Looking Ahead Panel Discussion David Bolduc, President, Canadian Beef Breeds Council Jack Hextall, Chair, Canada Beef Inc Tim Oleksyn, Chair, Canadian Beef Research Council Dave Solverson, Chair, Canadian Cattlemen’s Association Jeff Warrack, Chair, National Cattle Feeders’ Association Moderator – Bryan Walton, General Manager, NCFA Make it Canadian Rob Meijer, President Canada Beef Inc Daisuke Shimojima (Shimo), Director - Business Development, Asia Jorge Mendez-Manzanilla, Director, Business Development, Latin America Innovation at its Best - Using Genomic Tests in Commercial Ranch Selection John Genho, Eldon Farms/Livestock Genetic Services Lessons Learned & Opportunities for Growth – Alberta Pork Ben Woolley, Sunterra Ltd If I Can... Chris Koch Through The Eyes Of Our Consumers Ira Blumenthal McDonald’s and Sustainable Beef: Perspectives and Approaches Jeffrey Fitzpatrick-Stilwell, Senior Manager, Sustainability Michele Banik-Rake, Director of Sustainability - Worldwide Supply Chain Cattle Markets and Steaks Need Context Bruce Cobb, Consolidated Beef Producers

For a complete listing of session descriptions, please visit us online at:

www.abiconference.ca

FEBRUARY 2, 2015 • ALBERTAFARMEXPRESS.CA

A vet’s guide to the proper use of calf pullers beEf 911 } The goal is to deliver a lively calf, not just one that’s alive,

and have the cow in good shape to rebreed By roy lewis, dvm

lthough calf pullers are not used today near as much as past years they still have an important place in the calving barn if used properly. To me, every cow-calf producer, and some feedlot owners, need one — especially if they are often alone when calving. By using common guidelines when pulling, a calf puller can be a very valuable piece of equipment and save calves’ lives. There are several makes on the market, each with their own unique features. The most important features are being able to release pressure easily and allowing the operator to work close to the back end of the cow when first jacking. Older block-and-tackle types necessitated having two people — one by the cow and one running the pulling mechanism. These are archaic and should be discarded or used for wire stretching and a new or new/used puller purchased. The cost is about $200, so it’s cheap insurance.

The puller should be well cleaned and disinfected after usage so infectious organisms are not transmitted between calvings. A lot of the pullers I see are rather grungy with fetal fluids, placenta or manure allowed to freeze or dry onto the puller. Keep them like you would a kitchen utensil and clean often. That includes the breech (part that goes over the cow) and strap. Often they are hung up in the calving shed and these days collect dust but before use hose them off and always know where they are in case you need them suddenly. Take a few minutes and go over them at the start of every calving season. There is no time to do a calf jack overhaul when the calf is stuck at the pelvis and bellowing for his life. Any time I am going to use the pullers I ensure I have two wraps of the chains on each leg (above and below the fetlock joint). This will spread out the force to minimize damage to the legs and avoid the disastrous broken leg if the pull gets tighter than you would like. It is easy for me being the veterinarian as I have the farmer to help

pull. In this circumstance I will not put the pullers on unless two people can pull the front shoulders through in a front presentation. That is the rule of thumb that the rest of the calf should follow even with the help of pullers. By yourself you may put a puller on sooner to avoid fatigue from trying to pull by hand. Be wary — good pullers can put on forces approaching 2,000 pounds, so in inexperienced hands or when adrenaline kicks in, they can do considerable damage to calf and mother cow when care is not taken. I will periodically check the tension on the chains, always be patient, and try to time pulling with the cow’s contractions. Pulling too fast does damage and I believe results in the odd prolapsed uterus as the suction seems to have the uterus directly follow the calf. If we absolutely know the calf is dead we can pull a bit harder, but remember it is now the cow we are concerned about. Use lots of lube as a dead calf is drier and the vaginal vault is dry as well and again pull slowly. If still too tight know your limits and when to stop. A skilled veterinarian

with using different techniques or a one-cut fetotomy can save the cow and many times have her breed back. A downer cow from too hard a pull is never a good thing. Some do get over obturator paralysis but many are gimped for life from the calving experience. Where the puller is a lifesaver is when the calf appears stuck at the hips (farmers refer to this as hiplock) although seldom is this true, usually it is just tight or in rare occasions it is the stifle that is locked. Relaxing and rotating the calf slightly may alleviate this issue. By pulling by hand all you will do is pull the cow around. The way a puller is designed means it pushes back against the cow’s pelvis and by being able to manipulate the angle of the pull you can extricate the calf easily most times. This one advantage will pay for the puller in one usage. The tighter the calf, increase the angle with the puller, so eventually you are down between her back legs with your puller. This steep angle can only be achieved with the cow down in lateral recumbency (lying prefer-

ably on her left side). A cow down in lateral also has her pelvis tip slightly which helps with delivery, and I find their contractions are also more forceful, again helping with delivery. The cows that don’t force make for a very hard delivery. By keeping the puller firm, you can wait and hopefully she will start contracting. Always be methodically slow and steady when pulling. We want to save the calf by delivering a lively calf, not just an alive calf, and have the cow in good shape to rebreed. Use a calving suit and obstetrical gloves when assisting, keep the cow clean, and have a happy calving season. Hopefully you don’t have to use the puller too often — and if that happens, evaluate both your breeding and feeding programs. Overly fat, outof-shape cattle also have more difficulty calving. Know your limits and phone your veterinarian for help if not making progress after 20 minutes. Roy Lewis is a large-animal veterinarian practising at the Westlock, Alberta Veterinary Centre. His main interests are bovine reproduction and herd health.

Plan now to attend ....

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Tuesday, y Februaryy 17, 2015 at the ranch, Strome, AB.

On offer: 140 TWO YEAR OLDS

Proven genetics ★ Many ½ & ¾ brothers ★ Single and Pair lots ★ Internet bidding In house warranty program ★ Video sale with bulls available for on-site viewing ★ Personal guarantee

This is your opportunity to purchase bulls from a family that has been selling Charolais bulls for forty years. We offer you the largest selection of Two Year Olds from a program that guarantees sound, functional, uniform bulls, with built in performance to sire calves that will top the market. Catalog and Bull Video Available Online

www.rawesranches.com The Ranch where performance is no accident!

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ALBERTAFARMEXPRESS.CA • FEBRUARY 2, 2015

Is building the Canada beef brand worthwhile if cattle just head south? Programs like verified sustainable beef are part of the effort to create a premium Canada brand By Alexis Kienlen af staff

ill initiatives like verified sustainable beef and BIXS have value if Canadian cattle just get shipped

south? The lower dollar is likely to see more feeder and slaughter cattle end their days on American soil and an overreliance on the U.S. market isn’t a good thing, say industry officials. But current efforts to build the Canadian beef brand is worth the effort, they are quick to add. “We’re not a huge beef-producing nation in the whole scheme of things,” said Brian Perillat, senior analyst and manager with CanFax. “There will be increased demand for the entire industry, and longer term, that will pay some dividends.” Sustainability isn’t a fad and it’s good that Canada is at the forefront on that score, he added. “This is really positive and it seems to be a growing trend in today’s marketplace,” said Perillat. And although more than a million head of Canadian cattle were exported last year, there was also a jump in beef exports. The latest stats (covering the first 11 months of 2014) saw a 14 per cent increase in sales by weight to just under 293,000 tonnes, according to Statistics Canada data. The lion’s share — 204,000 tonnes — went to the U.S., followed by Hong Kong (24,000 tonnes), Mexico (22,000 tonnes), Japan (17,000 tonnes), and China (6,500 tonnes). Our next-door neighbour will always be our largest market for both cattle and beef, but the Canadian beef sector is working

Brian Perillat

“There will be increased demand for the entire industry, and longer term, that will pay some dividends.” Brian Perillat

hard to sell into other markets, said Fred Hays, policy analyst with Alberta Beef Producers.

USDA research centre accused of mistreating animals Ag secretary orders immediate review, researchers told report ‘disturbing’ practices By P.J. Huffstutter / chicago

A New York Times report on poor animal welfare standards at the U.S. Meat Animal Research Center in Nebraska has prompted U.S. Agriculture Secretary Tom Vilsack to order a review. An email memo was sent to all animal research service employees in late January, giving them 60 days to complete the review. The new strategy will include updated training for government employees and others who work with animals in the service’s research labs, according to the email. In addition, an independent panel will be convened to review the group’s animal-handling protocols, policies and research practices. What specific training steps would be implemented is not known and officials could

not be reached for comment. The review comes in the wake of a report stating facility staff failed to follow basic animal welfare standards when conducting decades of research. Researchers at the centre, which is overseen by the Animal Research Service, are tasked with finding ways to bolster the profitability of the U.S. livestock industry, according to the paper’s report, including making lamb chops bigger and pork loins less fatty. But in the process, according to the Times report, the centre put these animals into cruel and dangerous conditions and has operated outside of the federal Animal Welfare Act, which does not cover most farm animals used in research. “If you see something that disturbs you, please report it, first to your supervisor or their supervisor,” the email stated.

Fred Hays

Rich Smith

“The market for China is increasing, but it’s overshadowed by the U.S. market,” said Hays. South Korea is also a promising market, and sales to that nation more than doubled (to 2,700 tonnes) last year, he noted. Leveraging traceability and the Verified Beef Production program is a good way to tap into premium markets, said Hays. That may not directly translate into more dollars for cow-calf producers, but it is good for the overall sector, while a revamped Beef InfoXchange System holds the promise of boosting efficiencies and margins at the ranch level, he said. These types of programs will also help to bolster the Canadian consumer’s positive perceptions of the beef industry and help the

industry gain the support of the Canadian public, said Rich Smith, executive director of Alberta Beef Producers. “We need consumers to purchase the product, but we also need the support of the public for us to continue operating in this country,” he said. They also help to convince consumers that they’re getting good value when they buy beef, even as it rises in cost, said Hays. “Packers are concerned about that, and the beef industry is concerned about this, because a cheaper product like poultry or pork can come in,” he said.

Big Drop

akienlen@fbcpublishing.com

Family Day Sale 10th Annual

February 16, 2015

1:00 p.m. at the farm at Athabasca, AB Lunch at 11:30 a.m.

150 Red & Black Angus Two Year Old Bulls Strong set of 150 Commericial Black Angus Bred Heifers Due to start calving May 1st

CANADA’S LARGEST SELECTION OF 2 YEAR OLD ANGUS BULLS

“Sharing in the Excitement of Agriculture”

Sale Managed by:

Kelly & Anna Olson: 780-675-4664 Kelly Cell: 780-689-7822 Travis: 780-689-8324 Graham: 780-675-0112 P.O. Box 420, Athabasca, Alberta T9S 2A4

With over 2000 mother cows exposed in 2014, we at Ole Farms know what it takes to raise trouble free cattle. In order to be pro�itable we believe that a cow must be able to: *Feed herself on forages for as many days as possible with minimal mechanical intervention *Re-breed each summer and wean a calf every year.

All of our cattle must be deep-bodied, easy �leshing and have solid feet. This enables them to hold condition and breed without being pampered. Our sale bulls are 21 months of age. They are moderate, forage developed and ready to make your operation more pro�itable.

www.olefarms.com

} forecasts

FEBRUARY 2, 2015 • ALBERTAFARMEXPRESS.CA

Wild species a backup

Last year hottest on record

Climate change threatens the genetic diversity of the world’s food supply, and saving crops at risk will be crucial for preserving yields and adapting to wild weather patterns, says a new UN policy paper. Certain wild crops — varieties not often cultivated by today’s farmers — could prove more resilient to a warming planet than some popular crop breeds, said the report. But these wild strains are among those most threatened by climate change. Between 16 and 22 per cent of wild crop species are threatened, including 61 per cent of peanut species and 12 per cent of potato species. — Reuters

Two U.S. government agencies, NASA and the National Oceanic and Atmospheric Administration, have confirmed 2014 was the hottest year on record. The 10 warmest years since records began have occurred since 1997. The records undercut arguments by climate skeptics that global warming has stopped in recent years. The scientists said the record temperatures were spread around the globe, including most of Europe, the western U.S., far eastern Russia, parts of interior South America, and parts of eastern and western coastal Australia. — Reuters

You can thank California for January’s ‘heat wave’ The very chilly start to the new year has faded from memory thanks to a very unusually long stretch of warm weather

By Daniel Bezte

fter a bitterly cold start to 2015 across the Prairies, a fairly long-lasting winter “heat wave” moved into our region bringing a fairly long period of well-aboveaverage temperatures, with a few record highs thrown in for good measure. The warm temperatures moved in on Jan. 13 over Alberta and then quickly spread eastwards arriving in both Saskatchewan and Manitoba the next day. The warm temperatures, with the exception of the odd day here and there, stuck around until at least the time when I wrote this (Jan. 26), and when I checked out the medium-range forecast, temperatures should have stayed mild right up until the last couple of days of the month. The warmest temperatures during this winter heat wave were found over Alberta, as this region was closest to the ridge of high pressure responsible for the winter heat. The daily high temperatures in the Calgary region went above zero starting on Jan. 13 and there is a good chance that the daily highs will remain above zero until almost the end of the month. While this is certainly an impressive stretch of abovezero highs for January in Calgary, it is not unheard of in this region. Edmonton has also seen the same stretch of abovezero highs, with the exception of Jan. 18 when it only made it to -2.8 C. Now that is impressive! Farther east into Saskatchewan, the number of days with highs above zero drops, but it is still a fairly impressive period of mild weather, with most days seeing highs between -2 and 3 C. In Manitoba the length of warm weather lasted just as long as our western neighbours, but being farther from the ridge of high pressure and closest to the cold trough of low pressure to the east, meant that the colder weather won out for a few extra days during this warm snap.

1 Month (30 Days) Percent of Average Precipitation (Prairie Region) December 24, 2014 to January 22, 2015

< 40% 40 - 60% 60 - 85% 85 - 115% 115 - 150% 150 - 200% > 200% Extent of Agricultural Land Lakes and Rivers

Produced using near real-time data that has undergone initial quality control. The map may not be accurate for all regions due to data availability and data errors.

This map shows the total amount of precipitation that fell across the Prairies during the 30-day period from Dec. 24 through to Jan. 22 compared to the average. You can see a good portion of agricultural Manitoba, Saskatchewan, and the eastern parts of Alberta saw 60 per cent or less than average with some areas seeing less than 40 per cent. The only really “wet” area was in Alberta around Slave Lake where 150 per cent to more than 200 per cent of average was reported.

Copyright © 2015 Agriculture & Agri-Food Canada Prepared by Agriculture and Agri-Food Canada’s National Agroclimate Information Service (NAIS). Data provided through partnership with Environment Canada, Natural Resources Canada, and many Provincial agencies.

If we look at the mean monthly temperatures so far this month, all three provinces are reporting above-average temperatures, but only by a degree or two. The reason for this is due to the very cold start to the month, something the warm weather has pushed to the backs of many people’s minds. The cold weather moved in right after New Year’s Day and by Jan. 4, all three Prairie provinces saw the coldest temperatures of the month. Edmonton and Regina bottomed out at a very cold -35.8 C, with Brandon and Winnipeg only slightly warmer at -34.5 C and -34.3 C respectively. Saskatoon was the cold spot with a bonechilling -37.6 C, while at the same time Calgary pretty much missed out on the cold weather with an overnight low of a measly -21.7 C. Just what brought our spell of warm winter weather? Well, in the words of Christopher C. Burt, weather historian

from the Weather Underground, it has to do with the RRR — Ridiculously Resilient Ridge. This is in reference to the upper ridge of high pressure that has been dominating the weather over the west coast of the United States, and in particular, California, over the last year or so. After disappearing in December and allowing some much-needed rain to make its way into California, this ridge has redeveloped once again. This time the ridge shifted a little more to the east and northeast, allowing mild Pacific air to flood across the Prairies, bringing the nice mild temperatures. At the same time, over the eastern half of North America there has been a fairly persistent trough of low pressure that has been bringing colder-than-average conditions to this region. Picture in your mind’s eye the jet stream riding up and over the ridge of high pressure over the West. Lifting up and over

Created: 01/23/15 www.agr.gc.ca/drought

B.C. and most of Alberta, then diving to the southeast across northern Saskatchewan, through central Manitoba, and then into the eastern States before curving back to the northeast along the east coast. Warm air will be found on the south side of this jet, with cold air to the north. Over the course of days, the strength and position of the western ridge and eastern trough changes, resulting in the jet stream pushing a little farther north (warmer temperatures) or a little farther south (colder temperatures). Now, on top of this, you need to add areas of low pressure that ripple along this jet stream and you have a complete picture of our current weather pattern. What is the long-term forecast for this pattern? Will it break down, eventually allowing for a different pattern to take hold or remain the same? Or, will the pattern simply shift positions a little bit? None of the long-range

forecasts that I’ve seen are leaning towards any of these three outcomes. If we go with persistence forecasting, then the current weather pattern will remain the dominant one. If we go with gut forecasting, then my gut is saying that the western ridge will continue to dominate, but it will also continue to slowly drift eastwards. If this should happen it would mean milder and milder weather across the Prairies along with dry conditions. My worry is that it might last into the summer and bring very hot and dry conditions. But as they say, if you could predict long-term weather accurately you would be rich… and I am far from rich. Until next time. Daniel Bezte is a teacher by profession with a BA (Hon.) in geography, specializing in climatology, from the U of W. He operates a computerized weather station near Birds Hill Park. Contact him with your questions and comments at daniel@bezte.ca.

} research

T:10.25”

ALBERTAFARMEXPRESS.CA • FEBRUARY 2, 2015

Russian prospects dim The condition of winter crops in the Black Sea region is worse than last year due to a dry autumn and Russia’s harvest is unlikely to exceed 2014’s record level. Russia has already imposed export curbs following a 40 per cent slump in the ruble and it’s now feared cash-strapped farmers will seed fewer acres in spring and use “simpler technology.” That “will inevitably lead to a decline in the 2015 crop,” Russia’s Grain Union said. It’s estimated Russia’s grain crop may fall to 86 million tonnes in 2015 — 18 million tonnes less than last year. — Reuters

Winter wheat uptake low despite big efforts to convince producers The Western Winter Wheat Initiative wants to boost seeding to two million acres — but 2014 plantings were just a third of that By Madeleine Baerg af contributor

Janine Paly and student Kris Vaculchik assess a winter wheat project near Vermilion conducted by Ducks Unlimited Canada and Lakeland College last year. Photo: courtesy Lakeland College “This winter is not a normal year, some winterkill could have occurred with the fluctuation in temperatures,” said Paly. “My best advice to producers is: give the crop time to recover and don’t make hasty decisions too early in the spring.” Survivability is usually a bigger issue in late winter than now. “Winter wheat’s hardiness builds in the fall, reaches (its) max in the winter, and then slowly tapers off closer to spring,” said Paly. “If we get extreme temperature changes in December and January, we’re somewhat protected because that’s when the plant is at peak winter hardiness. Where we really find survivability issues is when dramatic temperature fluctuations happen in late winter or early spring. When producers talk about winterkill, they’re actually usually talking about spring kill.” A Quebec study found doubts

Although it’s commonly called winterkill, the danger period for winter wheat is in spring when its hardiness declines, says agronomist Janine Paly. Photo: Janine Paly about the crop’s profitability rank as the second-biggest barrier to winter wheat uptake. “The concern about profitability is purely a lack of knowledge,” said Paly. “For the past three years... Manitoba and Saskatchewan have released a list of what they predict to be the top economically beneficial crops for the coming year. Winter wheat is ranked either No. 1 or No. 2 every time.”

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T:15.58”

he goal is ambitious — convince Prairie farmers to plant two million acres of winter wheat by 2019 — but the backers of the Western Winter Wheat Initiative admit they have a steep hill to climb. Even though winter wheat yields were 32 per cent better than those for spring wheat in 2012 and offered almost twice the return on investment compared to spring wheat in 2013, the crop made up less than seven per cent of total wheat acreage harvested across the country in 2014. And the numbers will fall further in this crop year. Last fall, 170,000 acres of winter wheat were planted in Alberta and 665,000 in Western Canada — a 10 per cent year-over-year drop in Alberta and a much more significant decline for Western Canada. “We dropped by 20,000 acres in Alberta comparing 2013 to 2014 seeding,” said Janine Paly, an agronomist with Ducks Unlimited Canada in Edmonton, and one of five agronomists working on the winter wheat initiative. “But Manitoba and Saskatchewan’s acreage dropped in half, so our drop isn’t nearly as significant. Across Western Canada, it’s not that producers chose not to plant winter wheat this year — it’s that they weren’t able to because of late harvests.” But concerns about winterkill and questions about profitability are also factors, although Paly argues they are unfounded and the pressure of fall planting pays off in the spring.

“There is fear of the unknown — it can be hard for growers to try something new,” she said. “And there is also misperception of what they hear about things like winterkill. Absolutely, those barriers do have an effect on decreasing growers’ interest in winter wheat. Our job is to try to overcome those barriers by educating people about the yield, and economic and agronomic benefits of winter wheat.” Still, winter wheat acreage in Alberta has held relatively steady — and relatively low — for 30 years, hovering around the 100,000- to 150,000-acre mark except for a shortlived spike to 300,000 acres in 2007. Last year’s harvested crop for all of Western Canada was 1.1 million acres, barely half of the two-millionacre goal. The top barrier to uptake, said Paly, is an unfair stigma about the risk of winterkill. “When producers think about winterkill, they think about what used to happen in the ’80s,” she said. “But our agronomic practices are completely different than they were back then, and our varieties are much better than they were. “This is not the same crop it used to be, so doesn’t deserve the stigma that many still hold against it.” However, last year was a tough year for winterkill, and the temperature roller-coaster this winter won’t do this year’s crops any favours. While winter wheat can survive very low temperatures, rapid thawing followed by extreme cold can cause snow to melt and pool around plants and then freeze solid, which can suffocate the plant.

FEBRUARY 2, 2015 • ALBERTAFARMEXPRESS.CA

Opportunities for organic hemp growers Manitoba Harvest and Hemp Oil Canada are still looking for organic producers AARD release

n Alberta Agriculture crop specialist says there are opportunities for growing hemp in the province, particularly organic hemp. “Many people may now be aware that the majority of the hemp grown in Alberta is for seed purposes,” said Harry Brook, crop specialist with the Alberta Ag-Info Centre in Stettler. “The market is strong for hemp seed but the fibre market is stalled due to a lack of a processing plant. However, there is one planned for southern Alberta.” There is a lot of interest in growing hemp, especially with conventional crop prices being on the decline this year, said Brook. “Manitoba Harvest and Hemp Oil Canada, that are the two biggest companies that sign up producers to grow hemp, say they are filled up with conventional-produced hemp. However, they are

Canola council launches new online database The Canola Council of Canada says the database offers ‘top science for your bottom line’

Photo: iStock Harry Brook still looking for organic producers, and that is where the opportunities are right now.” Before growing hemp, growers need permission from Health Canada. “Unless it’s one or two of the most common varieties, you will have to send in a sample at your

cost to be tested for THC (tetrahydrocannabinol),” said Brook. “You’ll also have to show what fields you are growing hemp in, the number of acres, and where you are getting the seed. Once approved, there are other agronomic considerations as well. “Hemp is fairly easy to grow and develops rapidly,” he said. “However, you want to keep

plant height down to a manageable level. It’s a very fibrous crop and you need to minimize the biomass going through your combine to avoid starting a fire. But while growing hemp has its challenges, it also can pay you well for the trouble.” For more information, call the Ag-Info Centre at 310-FARM (3276).

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Canola Council of Canada release

The Canola Council of Canada has launched an online database, called the Canola Research Hub, to provide growers with the latest research findings to increase both productivity and profitability. “This is a first-of-itskind technology transfer tool,” said Curtis Rempel, the council’s vice-president of crop production and innovation. “It will allow growers to access canola research behind particular recommendations and quickly zero in on the findings most relevant to their region and concern.” The database, which can be found at www. canolaresearch.ca, was developed to illustrate the science behind best management practices of Canadian canola production, provide practical tools to evaluate agronomic performance, and to inform production management decisions. Users can navigate through a library of research summaries, view and filter research data, watch video interviews and clips, access published resources, download multimedia materials, and keep up to date on science-based industry news and events. “The practical application of science-backed production management relies on getting our story out,” said Neil Harker, a researcher with Agriculture and Agri-Food Canada in Lacombe. “Scientists are often only available for two or three tech transfer events per year with audiences ranging from very small up to a few hundred,” added Kelly Turkington, also of AAFC Lacombe. “This online resource is available to all audiences at all times.” The Canola Research Hub also provides the platform for collaboration between growers, consultants, agronomists and the scientific community, said Turkington. The canola council has set a target of achieving 52 bushels per acre and production of 26 million tonnes by 2025.

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Land values may have peaked — so what’s the strategy going forward? High land prices mean producers should be reviewing their strategy on loans, renting, and getting the most out of the acres they have By Shannon VanRaes staff/Brandon, Manitoba

or years land prices and rents have only been doing one thing — climbing. But with the drop in commodity prices and changing markets, it seems that prices may have peaked. “I think we’re at the top of the cycle,” Merle Good, a former tax specialist from Alberta Agriculture, said at the recent Manitoba Ag Days conference. “The increase in farming profitability, that’s been the big driver,” he said. “We’ve also had a successful run of good prices… it’s very rare in agriculture that you get six years in a row of substantial revenue increases, that in my view has been capitalized into the land value and I believe we are at the top.” What happens next remains up for debate, but farmers who bought land over the last few years shouldn’t waste time wringing their hands if prices fall. “The real question is, based on what you just paid, can you afford to maintain your payments?” said Good. Interest rates look set to stay low, but farmers with variablerate loans should be thinking about when might be the best time to lock in a rate, he said.

grow… we’re not going to make as much as we did over the last two years.” Both Good and Stockbrugger said having a good relationship with your landlord is critical. In the past, renters had to choose between a share-crop model or paying straight cash rent, he noted. But today it’s better to have something in between, such as “flexible cash rent with a guaranteed floor,” said Good.

Buy or rent?

All this still leaves producers who want to expand with their biggest decision — whether to buy or rent.

The first step is knowing exactly what your farm is making and what it’s costing, making sure margins are known and gross revenue is understood. Good suggested producers look at their operations as two separate businesses. “The real reason I like the idea of two separate businesses is primarily for succession, because the transferring of the farm is not transferring one bundle of assets, the farm to me is the operating business, the cattle, machinery, inventory and that structure, the land is a separate issue, because I can be a successful farmer with not inheriting every acre,” Good said. “So

when we have that separation of land versus the operations, we can then understand what our business is making, versus what our real estate investment is making or costing us.” But before buying more land, farmers look at ways of increasing their returns from existing land through improvements such as tile drainage, strategies such as variable-rate seeding, or through better marketing, said Good. And get ready for new challenges, particularly dealing with children of farmers who have inherited land but never farmed themselves. “When they get that land,

what are they going to do with it?” asked Good. “I think our role as educators of agriculture is trying to convince a girl in Calgary or in Brandon that if she inherits farmland from her parents, maybe she should hang on to it, and not flip it the next day. “Over the 30-year cycle, land from 1983 has increased approximately twice as much as the TSX,” Good said. “In addition the bull run has continued from 1992 which is the last year in Canada that farmland year over year had a negative change in value.” shannon.vanraes@fbcpublishing.com

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Get a free bomber hat and a chance to win a cool getaway. “Because right now a lot of young guys are saying, ‘Oh, wow, I’m going to stay on the variable rate ’cause it’s four per cent and I can’t afford to pay more than that,’” Good said. “Which is fine, but you should, in my view, perhaps look at the flexibility with some lenders where you do have it, to actually say, ‘I want to lock in 30 per cent of that mortgage, and let 70 per cent float.’” Those who rent land are also facing tough decisions and changing prospects, said another AgDays presenter. “Have prices peaked? Are they on the decline? Are they going to go down? I don’t know, but I think they almost have to,” said Lance Stockbrugger, a farmer and chartered accountant from Saskatchewan. “We’re in a situation where land rental rates are quite significantly high, and when you look at the commodities that we can

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FEBRUARY 2, 2015 • ALBERTAFARMEXPRESS.CA

Don’t expect diesel, fertilizer, and chemicals to match oil’s steep decline Experts say it’s a mixed bag when it comes to input costs By Jennifer Blair af staff

alling oil prices are bad news for energy producers, but that should be good news for farmers and other big users of fuel and energy-intensive products. “We’re paying 30 or 40 cents a litre less for gas today than we were three or four months ago,” said Michael Burt, director of industrial economic trends with the Conference Board of Canada. “Fuel costs will definitely be lower this year, and that should be a benefit financially for farmers.” There is some serious money on the table — Alberta producers spent an estimated $676 million on fuel, mostly diesel, in 2013. But compared to gasoline, which has dropped dramatically, so far diesel prices are just “softening,” said Jennifer Stoby, ag inputs market analyst with Alberta Agriculture and Rural Development. “Unfortunately diesel is not dropping as quickly as gasoline is,” said Stoby. “I don’t think we’re going to see a huge drop like we did with gasoline in the last few months.”

it to work itself through the system because all of this other stuff has been produced at a higher number.” Stoby agrees. “Fertilizer probably won’t be directly impacted by the drop in crude oil prices,” she said. As a result, producers shouldn’t expect fertilizer prices to come down between now and spring, said Schmaltz. “We have now started to see in the short term a lot more growers realizing, as we get closer to spring, the logistics really start to tighten up on fertilizer, and they’re starting to make purchasing decisions if they haven’t already,” he said. “Historically, now ’til spring, prices don’t get better.”

Big Drop

And why is that?

The problem is twofold, said Michael Ervin, president of MJ Ervin and Associates, a Calgary-based expert in the refining and marketing end of the oil business. On the supply side, big gasoline inventories pushed down gas prices very quickly while on the demand side, diesel is closely linked with furnace oil, a popular heating fuel in parts of Canada and the eastern and midwestern U.S. “In the wintertime, there are higher furnace oil sales in parts of North America where furnace oil is a fairly significant heating product,” said Ervin. “That creates a bit of seasonality, which tends to create a heightened markup of diesel relative to the crude oil price in the winter.” There is also a large amount of North American diesel being exported to South America and other global markets. “Come springtime when furnace oil demand is reduced, I expect to see a further drop in diesel prices, assuming that the crude price stays low,” said Ervin.

Fertilizer prices

The drop in fuel prices also makes it cheaper to produce fertilizer, seed, and chemicals — but, again, it will take time for those lower costs to trickle down to the farm level, said Remi Schmaltz, CEO of Decisive Farming. “In the short term, from now till spring, the drop in oil is not really going to offset or help those three commodities,” said Schmaltz. “Until we get into next year, that’s when we’ll probably start to see some real correction around oil affecting these other inputs. “Right now, supply and demand for fertilizer, seed, and chemicals is really going to dictate it, versus the cost of production.” And like the furnace oil market, the oil price plunge came at the wrong time of year in terms of having a big and immediate impact, he said. “A lot of this fertilizer has already moved,” said Schmaltz. “Even if there was some adjustment in the cost of production in the short term, it’s really a delayed effect for

Falling loonie

The drop in the Canadian dollar is also a big factor, and that’s definitely a negative for input prices. “When you look at fertilizer in particular, it’s not a positive because our prices are based on U.S. numbers typically,” said Schmaltz. Alberta producers spent a total of $1.246 billion on fertilizer and lime in 2013 — and that number will continue to climb. “Even if you weren’t dealing with the supply-and-demand logistics that we are (facing) today, that bigger spread between the stronger U.S. dollar and the weaker Canadian dollar means that we need to pay more for fertilizer,” he said. “That’s going against us for sure.” But it’s also a two-way street and the drop in the Canadian dollar is making crop commodities more “cost competitive,” said Burt. “If you’re selling your products

“Unfortunately diesel is not dropping as quickly as gasoline is.” Jennifer Stoby

outside of Canada and you’re getting U.S. dollar of X per bushel, you’re getting more Canadian dollars for every bushel that you sell, so there’s a benefit there,” he said. That’s good for grain exports, said Schmaltz. “From the Canadian dollar perspective, that makes our grain exports cheaper,” he said. “We’re a more attractive market to buy from.” But whether the bump in grain prices will offset the higher costs of fertilizer and equipment remains to be seen. That’s why producers need to know their margins, said Schmaltz. “When we’re dealing with the volatility in commodity markets like we’re experiencing these days, you really have to have your finger on the pulse of where your margins are down to a field crop level,” he said. Producers need to have a plan in place to protect themselves from rising costs and dropping prices. “You can’t be shooting from the hip here,” said Schmaltz. “The last four years have been a gift. Pretty much no matter what you did, you were profitable when you sold. This is a very different game.” — with files from Alexis Kienlen jennifer.blair@fbcpublishing.com

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Albertafarmexpress.ca • february 2, 2015

Wild pollinators earn their keep on the farm Wild pollinators may boost yields and help crops mature more uniformly, and also are a natural source of pest protection By Alexis Kienlen af staff

Mark Wonneck, ecologist with Agriculture and Agri-Food Canada, uses an aerial net to catch some pollinators. Photos: Supplied

t’s crop-planning season and that means it’s a good time for making plans to create a wild pollinator habitat near your crops. Having a strong pollinator population can offer a benefit to crops, said Mark Wonneck, an ecologist at Agriculture and AgriFood Canada in Calgary. Bees are an important part of both alfalfa production and hybrid seed production in canola. And some studies have found commodity canola is also pollinated by bees. Pollination service has been used in canola production, haskap and saskatoon production. Even though alfalfa production is usually supported through the use of leafcutter bees, other bees pollinate alfalfa seed. Some research has shown that healthy pollinator populations can boost yields of some crops. “In the case of commodity canola, when you have more complete pollination, you will get more seeds produced,” said Wonneck.

“Whether you get increased yield is sort of a debate that is going on around out there. You may get more seeds, but the seed size may not be as big. But one of the other possibilities is more complete maturation.” About 75 per cent of flowering plants depend on insect pollinators, and other crops that benefit from them include borage, canary seed, sunflowers, soybeans and small fruit crops In order to keep pollinators around your place, it’s important to maintain diversity in the natural areas. Having native plants like asters and goldenrods along the edges of fields can help them survive. “When you have rich field margins, you’ll be conserving or benefiting pollinators — but in addition to that, there’s more research coming out on beneficial insects in general, such as the natural enemies of pests,” said Wonneck. “They get more natural enemy pest control with diverse habitat around fields. So there are indirect benefits to the farmer as well, instead of just to the environment.” Agriculture Canada has information on how to create and protect habitat for pollinators in a booklet entitled Native pollinators and agriculture in Canada. (Go to www.publications.gc.ca and type ‘native pollinators’ in the search box to find a pdf version.) Pollinators need access to nearby flowers, as well as overwintering and nesting sites, which can include untilled areas, deadfall, trees, hollow-stemmed plants, mud and water. Native plants are of special importance to wild pollinators. Honeybees play an important role, but so do wild bees. There are more that 323 wild bee species, with 299 found in the Prairie ecosystem. All of Alberta’s 28 species of bumblebee are native and can be identified by their large, hairy appearance. Other types of native bees range in size. Western leafcutter bees and andrenid are the same size as honeybees, but there are also tiny little bees about four millimetres long. While some live in small colonies, others are solitary. All of the bees require some sort of flower for pollen and nectar, but the amount of time they require flowers can vary. Bumblebees need flowers from April to September, while others

Mark Wonneck, ecologist with Agriculture and Agri-Food Canada, stands with a bee poster.

“There are indirect benefits to the farmer as well, instead of just to the environment.” Mark Wonneck

only need flowers for a few weeks in the summer. Some types, like bumblebees, are generalists and can feed on any flower, while others need a specific type of flower in order to be able to survive. Bees aren’t the only insects that can act as pollinators. Adult wasps are vegetarian and collect pollen and nectar for food. But their pollination capacity is limited. “They do a lot of pollination, but they’re not as efficient as bees,” said Wonneck. Hoverflies, which dart about like small helicopters, are important pollinators for shallowbowled flowers. Beetles, butterflies and moths are not highly efficient pollinators, but all of them have some pollination ability. akienlen@fbcpublishing.com

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A bumblebee alights on a flower. Bumblebees play an important role in pollination.

FEBRUARY 2, 2015 • ALBERTAFARMEXPRESS.CA

Researcher urges farmers to grow micro-organisms Take all the bacteria, fungi, and nematodes in a hectare of soil and they’d weigh as much as 20 head of cattle By Shannon VanRaes staff

Mario Tenuta speaks at the Manitoba Forage Seed Association’s annual conference in Winnipeg. Photo: Shannon VanRaes

t just might be that the most important living beings on any farm aren’t found in the barn — but in the soil. Bacteria, mycorrhiza, fungi, nematodes and even earthworms are key to understanding and promoting plant growth, University of Manitoba soil scientist Mario Tenuta said at the Manitoba Forage Seed Association’s recent annual conference. “We have to think, not just about growing the plants, but about growing soil and micro-organisms and feeding soil,” he said. And those organisms and microorganisms aren’t just important, they’re also numerous. “The numbers are incredible, in just a millilitre of soil, just a little pinch of soil in your palm, there are more organisms in terms of numbers than all of the humans on earth together, that is how

incredibly small they must be, and then we have the fungi and other organisms, and those higher critters too,” Tenuta said. “If we were to take a hectare of soil and grab all the bacteria, fungi, nematodes and weigh them, it would come down to the equivalent weight of 20 head of cattle.”

Symbiotic relationships

Perhaps the best-known example of the symbiotic relationship between micro-organisms and plants is the relationship between soybeans — a legume — and the rhizobia bacteria that allow it to fix nitrogen. “When the bacteria are associated with the (soybean) plant they can fix a lot of nitrogen; soybeans fix 150 kilograms of nitrogen per hectare easily,” he said. “But the same bacteria free, living in the soil, and not in a nodule, contribute less than a kilogram. They need to be tacked into a root.” That’s because the plant provides the bacteria with what it

needs to survive, so that it can provide nitrogen, he added. Other plants turn to mycorrhiza for assistance, which changes the root structure of a plant. Crops with heavy mycorrhizal activity will have roots that are both thicker and stubbier. “They kind of, in essence, give up exploring and let the fungus explore for them, the fungus becomes an extension of their root system,” Tenuta said. That fungus then obtains phosphorus for the plant, while also contributing to soil aggregation, which is important for drainage and aeration, he said.

Mycorrhiza effect

The best example of this might be flax, which depends heavily on mycorrhiza. “With flax a lot of its phosphorus acquisition is actually through mycorrhiza, regardless of the soil’s phosphorus,” said Tenuta. “Whereas other plants, such as rye and buckwheat, they’re dependent on it, but if the soil test phosphorus is high enough, they’ll give up on the fungus.” Then there are plants that don’t rely on mycorrhiza, in fact they diminish their numbers. “Some plants like canola, or anything in the mustard family, don’t use mycorrhiza, they acidify the soil with their roots, which produce organic acids to solubilize phosphorus,” Tenuta said. And that means crop rotation needs to factor in how plants and micro-organisms interact.

“So what can you do to grow soil organisms? Rotate wisely.” Mario Tenuta

“So what can you do to grow soil organisms? Rotate wisely,” said Tenuta, adding you never want to follow canola with flax. “Why? The flax won’t get enough phosphorus, because the mycorrhiza will have not been fed and promoted in terms of their growth by the canola,” he said. High biomass crops, reduced tillage and perennials can also help to improve soil health, but don’t expect to see results overnight. It takes about a decade for improvements to show up on soil tests, although visual signs may appear sooner. Improved soil with higher levels of organic matter will drain better, be darker in colour and crumble well, Tenuta said. shannon.vanraes@fbcpublishing.com

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ALBERTAFARMEXPRESS.CA • FEBRUARY 2, 2015

Donkey Train

Peso, a small standard donkey, leads the way to a grazing field. He is followed by the bigger large standard donkeys, often referred to as Spanish burros. These long-ears reside on Burro Alley Ranch, near Millarville, Alta. Photo: Wendy Dudley

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Check to ensure your farm implement dealer is licensed Dealers and distributors must pay an annual levy to the Farm Implement Compensation Fund Alberta’s Farmers’ Advocate Office release

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The Alberta’s Farmers’ Advocate Office advises farmers to protect themselves by ensuring that their farm implement dealer of choice is licensed. The Alberta Farm Implement Act/Farm Implement Dealerships Act and Regulations are administered by the Farm Implement Act Administration of the Farmers’ Advocate Office of Alberta. Under this act, anyone carrying on a business as a farm implement dealer or distributor within Alberta must hold a dealer’s and/ or distributor’s licence. Licences are issued annually, and along with a licence fee, dealers and distributors must pay an annual levy to the Farm Implement Compensation Fund. The levy, which is set annually, is based on the number of claims paid out of the compensation fund during the previous year. This legislation provides protection to farmers when purchasing new equipment. Farmers may verify if a company is licensed to carry on a business as a farm implement dealer and/or distributor by contacting the Farmers’ Advocate Office at 310-FARM (3276), or by asking to see the dealer’s current licence. All dealers and distributors are asked to have their current licence visible in their place of business. January 1 was the deadline to have their new licence for the 2015 year. For more information, visit www.farmersadvocate.gov.ab.ca.

FEBRUARY 2, 2015 • ALBERTAFARMEXPRESS.CA

Data from shippers show rail car supply is far short of demand Almost half the shortfall in car demand is for orders at least a month old By Dave Bedard agcanada.com

umbers pooled from more than 15 Canadian grain shippers paint a picture of a wide — and growing — gap between the numbers of rail cars they say they need and what they’re getting. The Ag Transport Coalition, which so far includes eight Canadian grain-handling and crop commodity groups with backing from the federal/provincial Growing Forward 2 funding framework, released data Jan. 26 shows an 11 per cent shortfall in shipper demand for cars. Overall, the railways “have at no point this year been able to meet

shipper demand for rail cars,” said Greg Cherewyk, chief operating officer for coalition member Pulse Canada. The coalition’s report, covering the first 21 weeks of this crop year, said railways through that period have “failed to supply” 11,461 hopper cars ordered, with roughly half of those cars overdue four weeks or more. Boxcar shippers — mainly handling bagged commodities such as pulses to be transferred to intermodal containers — have seen an average weekly fulfilment rate of about 60 per cent during the crop year to date, and just 50 per cent for Week 21, the report said. The shortfall for both Canadian National and Canadian Pacific

railways “has continued to grow weekly since the beginning of the crop year,” the coalition said in the report, prepared by Edmonton-based QGI Consulting. Timeliness of supply in response to orders has “consistently declined throughout the course of the crop year for both railways,” the report said. “To date, the railways have supplied only 50 per cent of customer orders in the week for which cars were ordered.” In Week 21 (Dec. 22-28), CN and CP spotted 1,928 and 1,679 hopper cars respectively in the country. The total of 3,607 cars included 2,500 cars that had been ordered for prior weeks, the QGI report said. Week 21 car spotting perfor-

mance is “significantly lower than weekly average car spots of 2,481 and 2,363 for CN and CP respectively for the crop year to date,” the coalition added. The QGI report also shows traffic destined to Western Canada’s bulk port terminals getting 30 per cent more cars than other corridors, while “non-bulk” traffic corridors such as to the U.S. and Mexico, Vancouver transloading sites and domestic Canadian buyers are seeing “significantly lower” fulfilment rates. In Week 21, non-bulk corridors got just 15 per cent of cars ordered for delivery. CN that week fulfilled about 30 per cent of its orders in non-bulk corridors and CP supplied no cars. Wade Sobkowich of the West-

ern Grain Elevator Association, another coalition member, said members of his association have found the railways put on only enough resources for “100 per cent asset utilization,” a level below what shippers demand. “We believe the railways have the ability to bring on more capacity; they just choose not to,” he said. Given the number and scope of the coalition shippers providing data so far, QGI’s Milt Poirier said the report’s figures represent about 65 to 70 per cent of grain industry participation. Future reports will fold in data from more shippers as the crop year goes on, bringing the representation figure to about 90 per cent, he added.

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Albertafarmexpress.ca • february 2, 2015

Fertilizer prices stay high, no longer tracking corn as they once did But with more sources and more fertilizer types, availability doesn’t look like it will be an issue by dave sims, commodity news service canada

oreign exports and transportation look like they could be main issues facing the fertilizer industry in 2015. Countries such as Ukraine, Russia and Belarus are busy players on the market with Morocco also ramping up production. As a result, more supplies of phosphates and other fertilizer types are out there, according to David Asbridge, president and senior economist with NPK Fertilizer Advisory Service in Missouri. “Availability doesn’t look like

it will be an issue this year,” he said. Shipments of fertilizer have been streaming into the Gulf Coast which is causing some price pressure to bleed up to the Midwest, he said. “Potash prices have started coming down and are likely to stabilize or even go lower before the heart of the spring season gets here,” he added. That will be welcome news to many western Canadian farmers who have seen higher-thanexpected fertilizer costs, said the president of the Keystone Agricultural Producers in Manitoba. “We’re always told fertilizer

prices track corn prices closely and we’ve seen a significant decline in corn prices recently but fertilizer is more expensive right now than a year ago, which doesn’t make a lot of sense to producers,” said Doug Chorney. While fertilizer and corn have generally matched each other’s movements over the past five to six years, that is slowly changing, said Asbridge. “The nitrogen producers saw this coming, once the corn prices started falling and wheat prices started falling they began to cut back on production. They kind of limited the supply there to kind of keep prices up.”

Nitrogen prices are expected to stabilize with a modest bump come springtime, said Asbridge. Over the holiday season Chorney said anhydrous ammonia was priced at $910 a tonne, which was higher than expected. Logistics issues, transportation problems and the challenge of keeping supply through the distribution network are often cited as the reasons for the high price, he said. As a result some producers may be choosing to wait to purchase their fertilizer needs. However, Asbridge said the situation may play out differently at the retail end.

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“If retailers have booked stuff in without pre-selling it, they’re not going to be too willing to move that price down any,” he said. Weather will also likely play a factor. A wet, dreary spring could keep prices down while a nice, early warm spring could cause values to increase over what was expected. “We expect nitrogen prices to kind of stabilize here for a little bit, there’s not much upside to it, but once we get into spring we anticipate a little seasonal bump in prices,” Asbridge added. Farmers with good soil levels may also skip a year too, he said.

FEBRUARY 2, 2015 • ALBERTAFARMEXPRESS.CA

Will it or won’t it? Producers discuss Roundup Ready alfalfa Variety registration should be changed so that market factors and potential impacts are taken into account By Shannon VanRaes staff

Photo: Thinkstock

t’s become a perennial issue for forage seed growers. Will or won’t Roundup Ready alfalfa be released in Canada? The question loomed large at the Manitoba Forage Seed Association’s recent annual conference, where the issue was raised no less than four times. “We basically feel that there isn’t a need for it, our market for alfalfa is strong because we don’t have Roundup Ready alfalfa,” said association president, Kyle Willis. “We feel that it’s going to ruin the seed market for alfalfa.” But he added that the association isn’t taking issue with the science behind the genetically engineered crop, rather its concern is with market acceptance.

That sentiment was echoed by Kurt Shmon, president of Winnipeg-based Imperial Seed. “As a seed company, our take is that we want market acceptance prior to its release, and by market acceptance, I mean the European Union accepting it, Russia accepting it, China and so on and so forth. A lot of the seed we produce in Canada moves into those markets,” he said.

Sales affected

Both pointed to issues in the United States, where Roundup Ready alfalfa contamination issues have affected international seed and hay sales. Monsanto has been targeted by several lawsuits south of the border related to the release of the genetically engineered seed. Forage Genetics International has registered Roundup Ready alfalfa in Canada and is able to legally sell it.

See the lAteSt in the FielD

But so far the company has stuck to test plots in Quebec and Ontario. Willis said he believes lobbying by groups such as the Manitoba Forage Seed Association has helped companies realize that releasing the seed will be extremely detrimental to producers, sellers and exporters. But other than work to convince companies to hold off on releasing the modified seed, the seed grower isn’t sure there is much more that can be done. “The government hasn’t really said it’s taken a position on it, other than that it’s allowed registration of varieties,” Willis said. “But just like any other GMO, if they meet guidelines they can be registered, it’s just whether a company distributes it, and most companies realize the consequences if they do, so we’re kind of hoping the companies will see the bigger picture.” However, others would like to see the Canadian government do more to protect the interests of producers when it comes to the registration of new genetically engineered crops. “The biggest disconnect that exists, is that our science-based decision process does not take economic harm to existing markets into consideration; there is no requirement to look at market impacts,” said Shmon, adding the government could change that, if there was a political will to do so.

Where’s the demand?

He also questions where the demand for the introduction of this product is coming from. “Currently there are claims, and I use the word claims, that there are some producers asking for this product in Eastern Canada. I myself have been in the industry since 1986, in the public eye since 1991 and have been very vocal on the round-up since 2008 and I have yet to have a producer come up and tell me that this is a fit for their farm,” he said. What it comes down to for Shmon and others, is providing what the consumer wants, regardless of why they want it.

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“In China they are saying, well it’s all political, well it doesn’t matter what it is. The truth is that you can’t ship it there,” he said. “So if it’s a political reason, or if it’s a health reason, or whatever they choose, you still can’t ship it there, it’s just that plain and simple, so what matters to us is what the customer wants, and if the customers wants it, you have to supply it.” And judging from the current situation in the U.S., that won’t be possible if Roundup Ready alfalfa is released in Canada. “The longer we keep it out, the better,” Willis said. shannon.vanraes@fbcpublishing.com

ALBERTAFARMEXPRESS.CA • FEBRUARY 2, 2015

Canadian horticultural sector placed at competitive disadvantage Without a level playing field with the U.S. and access to foreign workers, the sector’s growth will slow By Alex Binkley af contributor

ontinued growth in Canada’s $11.4-billion horticulture sector could hinge on whether the federal government acts to close a widening gap in competitiveness with the U.S., according to the president of the Canadian Horticultural Council. The sector adds $11.4 billion to the country’s GDP, but producers are feeling the strain of changes in U.S. and Canadian policy that place it at a competitive disadvantage, Keith Kuhl recently told the Senate agriculture committee. With more than 100 fruits and vegetables in production, “the horticultural sector has been an engine for economic growth and can be a foundation for continuing job growth,” said Kuhl, a potato producer from Manitoba. “It is a growing industry.” However, it has made little progress in resolving its major headache, he said.

“It is important to note that the proposed discontinuation of most of these pesticides in Canada is contrary to the recent reregistration decisions by the U.S. Environmental Protection Agency that fully support continued use by growers in the U.S., further widening the competitive gap.” As well, Canada continues to import horticultural crops that are treated with the same chemicals Canadian growers will no longer be able to use, which puts producers at an additional disadvantage. Finding enough workers is another serious challenge. “Labour accounts for an average of more than 33 per cent of the cost of production for fruit farmers, 31 per cent of vegetable farming costs and nearly 20 per cent for potato farmers,” said Kuhl.

Continued access to foreign workers is critical to the industry’s success, Kuhl said. “The current Seasonal Agriculture Worker Program is a longstanding achievement in this regard and a program well worth maintaining.” The seasonal program is supplemented by the agriculture stream of the Temporary Foreign Worker Program, he added. Changes to that program “have affected the flow of agricultural workers through the agricultural stream,” he said. “In fact, one example of this situation was seen this past production season in Quebec, where a lack of available workers resulted in millions of dollars of fruits and vegetables left to rot on the trees and in the fields.”

Photo: Thinkstock

“The horticultural sector has been an engine for economic growth and can be a foundation for continuing job growth.” Keith Kuhl

Due to changes in American policy and the lack of a response from the federal government, Canadian horticulture producers don’t have comparable financial protection to their American competitors. “The recent withdrawal by the U.S. of a preferential status for Canada is a significant blow to horticulture and is an indication for horticulture that Canada is not living up to the commitments that were contemplated within the framework” of the Canada-U.S. Regulatory Co-operation Council, he said. The key issue remains finding a mechanism to allow the growers “to get paid when buyers become insolvent,” he said, noting instruments such as insurance or bonding schemes are not a solution. “Anything short of Canadian fruit and vegetable growers and shippers having the same avenues of recourse available to them in Canada as in the U.S. is simply unacceptable,” Kuhl said. He noted that progress is being made on unified licensing regimes in the fresh produce sector, and that a requirement by the Canadian Food Inspection Agency that all produce sellers be licensed will greatly benefit the sector. But the industry also faces some long-standing difficulties created by differences between Canadian and American rules. Pesticides that are approved for use in the U.S. but not Canada “create an unlevel playing field for Canadian producers.” So does large price disparities for pesticides and a recent move by Canadian regulators to discontinue several older pesticides the industry considers vital to management of pest resistance in horticultural crops.

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FEBRUARY 2, 2015 • ALBERTAFARMEXPRESS.CA

More cash needed for private-sector innovation Canadian seed companies need to put more resources towards developing new genetics if they want to stay competitive in the global marketplace By Shannon VanRaes staff

David Hansen speaks to the Western Wheat Growers. Photo: Shannon VanRaes

eed companies are eyeing end-use royalties to bring in more cash. Speaking at the recent Western Wheat Growers conference in Winnipeg, David Hansen, president and CEO of Canterra Seeds, said that more money is needed to further the development of new seed varieties. “If you just start putting numbers in, just for fun and examples, if we looked at $1.50 on every tonne of wheat that was delivered into the exporters, the millers, into the feedlots, etc.… we’re looking at $34 million, $37 million, $38 million in added dollars that would contribute back into that investment scene that is going to be required in order

Canola sector gets funding boost

even some of the federal government groups,” he said. While the Canadian Seed Trade Association helped facilitate the

“We wanted to create a system that would be flexible and adaptable to the needs of the marketplace, and encourage and promote competition along the value chain.” David Hansen

stakeholder working group, it is not part of the association, he added. “This is not a CSTA initiative, it’s a stakeholder initiative. We wanted to create a system that would be flexible and adaptable to the needs of the marketplace, and encourage and promote competition along the value chain, make sure that the value is generated for the entire value chain and that the system rewarded success,” said Hansen. “We certainly do know that Canada is at a crossroads. We’re hearing lots of positive signals about the potential demands for our crops and products that we’re producing here in Canada, but that doesn’t come without risk and issues we need to be challenging.” shannon.vanraes@fbcpublishing.com

Ag Outlook 2015

By Commodity News Service Canada

The Canadian government will invest up to $9.5 million in the country’s canola industry in order to support market access and other development activities, Agriculture Minister Gerry Ritz announced at the recent CropSphere conference in Saskatoon. The government funding will be combined with industry contributions for a total investment of $19 million over five years, according to a news release. The investment will support market entry and development activities aimed at increasing the consumption and value of canola oil and meal in both domestic and global markets. This investment is being made through the AgriMarketing Program, a five-year, up to $341-million initiative under the Growing Forward 2 program. “Our farmers grow the world’s finest canola, and we will continue to make smart investments that help our farmers stay competitive now and in the future,” Ritz said in a news release. “The canola industry is an important economic engine in Canada and we need ongoing investment to keep this momentum up and reach our target of 26 million tonnes of sustained market demand and production by 2025,” said Patti Miller, president of the Canola Council of Canada. “Because 90 per cent of our canola production is exported around the world, it’s critical to grow current markets and create new market opportunities too.”

to advance our cereals business,” he said. Hansen said that currently the private sector only contributes to a small percentage of innovation, about five per cent. He’d like to see that change, but said it would take more funding. “In the area of innovation and the introduction of new genetics — where we can stay competitive — Canada is not doing very well… we’re lagging behind the rest of the world,” he said. Ongoing meetings with stakeholders have been examining how end-point royalties might operate. “So from this working group, and it included a number of stakeholders, we really tried to cover the full spectrum, we had everything from the grain handlers and shippers, to the seed companies, to the biotech industry, growers,

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Albertafarmexpress.ca • february 2, 2015

Now you just need to figure out how to plant that way Researchers say grid planting does a better job of shading out weeds staff

lanting corn and other crops in a grid rather than in rows may control weeds better, say scientists writing in the journal Weed Research. C. Marin of Jorge Tadeo Lozano University in Colombia and J. Weiner of the University of Copenhagen report on two years of tests in which maize (corn) was sown in three densities in both grids and rows. “On average, weed biomass was reduced (by 72 per cent in the first year and 58 per cent in the second year), and grain yield was increased (by 48 per cent and 44 per cent) at the highest density in the grid pattern com-

pared with standard sowing practices (medium density, row pattern),” they write. The researchers say that several studies over the past decade have shown better weed suppression in wheat through a combination of increased crop density and spacial uniformity. Plants seeded in rows are crowded in one dimension, but farther apart in the other. “In a uniform pattern, individual crop plants are equally crowded in both dimensions. Intraspecific competition within the crop is delayed, while interspecific competition with weeds begins sooner. This allows the crop population to shade and suppress the weeds,” the article says.

The tests were done over two years in Colombia on six-metresquare plots with three densities — five, seven and 10.5 plants per square metre. Three varieties were used in the tests, and with some variation of weed suppression among them. The researchers hypothesize that varieties with more uniform leaf characteristics also promote more shading and weed suppression. “Our results suggest the possibility of developing ‘high-density, weed-suppressing’ varieties of maize and other crops, because attributes that will prove advantageous under such conditions are not those natural selection or plant breeding to date have promoted.”

J.P. Gervais FCC Chief Agricultural Economist

J.P. Gervais has over 15 years of experience in domestic and international analysis of agricultural policies and markets. He’ll provide insight into major economic trends that shape the Canadian agriculture industry today. Learn how they could impact your farm in the coming year. Appearing at: Medicine Hat, Lloydminster

Drew Lerner President, World Weather Inc.

A favourite among the agriculture industry, Drew’s daily assessments of crop and weather expectations support commodity market trade and help many companies make better agricultural business decisions. Hear how weather trends and global climate change could affect your operation in 2015. Appearing at: Medicine Hat

Mark Robinson Meteorologist, The Weather Network

Mark has been storm chasing since 2000, sending on-the-ground reports to The Weather Network. He has intercepted 15 hurricanes and over 30 tornadoes across North America, including the most destructive hurricane in U.S. history, Katrina. He will discuss the weather trends we could expect to see in 2015. Appearing at: Lloydminster

Mike Jubinville President, Pro Farmer Canada

Mike is lead analyst and president of Pro Farmer Canada, an independent market analysis and advisory service he started in 1997. Benefit from his experience as he explains current and future trends in agriculture, the current state of commodity markets and what we can expect next. Appearing at: Medicine Hat, Lloydminster

Lyndon Carlson FCC Senior Vice-President, Marketing

Lyndon has 30 years of experience in several areas of agribusiness and marketing. He’s been named the Canadian Agri-Marketing Association’s Agri-Marketer of the Year and presented with the Queen Elizabeth II Diamond Jubilee Medal for his contributions to 4-H Canada. He’ll help you see where Canadian agriculture is headed and provide insights to improve your farm management skills. Appearing at: Medicine Hat, Lloydminster

Photo: Thinkstock

Employers wanted for job fair If you’re looking to hire, employers are wanted for the job fair in Lethbridge on Feb. 26. “We had 18 companies at last year’s fair in Lethbridge and we’re hoping for even more this time,” said Al Dooley, labour recruitment specialist with Alberta Agriculture and Rural Development. Employers that participated at past job fairs include: AGI Nobleford, Cargill Meat Solutions, ConAgra/Lamb Weston, and DuPont Pioneer. Employers will be recruiting various positions from entry level to skilled, temporary, permanent, part time and full time. The format is being changed slightly this year. “Last year’s fair ran from 1-4 p.m.,” said Dooley. “This year’s we’re extending the fair until 7 p.m. so that those who may be busy during the day can still come down to the fair.” For more information, contact Al Dooley at 780-422-0907 or Scott Dundas in Olds at 403-5564245. — AARD release

New-crop prices similar to old crop CWB released its first Pool Return Outlooks (PROs) for the upcoming 2015-16 crop year on Jan. 12. Global wheat and coarse grain ending stocks are projected to increase in 2015-16, contributing to an underlying bearish tone to the 2015-16 markets, CWB said in a press release. However, the weaker Canadian dollar provides an offsetting effect. As a result, the Canadian dollar projected pool returns are overall not dramatically different from values for the 2014-15 winter pools, said CWB. — Commodity News Service Canada

FEBRUARY 2, 2015 • ALBERTAFARMEXPRESS.CA

HERDING LESSONS

Zuni, an Australian shepherd, puts the heel on a mule pastured near Priddis, Alta., as Desi, a Belgian shepherd, watches from the sidelines. Photo: Wendy Dudley

It PAYS to Study Ag CABEF offers six $2,500 scholarships to Canadian students enrolling in agricultural or agri-business related programs.

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CABEF is a registered charity (#828593731RR0001). For more information on all registered charities in Canada under the Income Tax Act, please visit: Canada Revenue Agency, www.cra-arc.gc.ca/charities.

New ag education storybook for students in Grades 3-5 Book looks at the importance of farming and the impact it has in everyday life Staff

Viterra Inc. is partnering with Agriculture in the Classroom Saskatchewan (AITC-SK) to develop an agriculture education storybook for students in Grades 3-5 in Western Canada. The goal is to help educate students in urban and rural areas about the importance of farming and the impact it has in everyday life, the company said in a release. The theme of the book will focus on farm stewardship and sustainability, and will highlight modern farm practices and technologies utilized today. The book will be the feature book for Canadian Agriculture Literature Week, March 1 to 7, 2015. AITC Saskatchewan will work with its counterparts in Alberta and Manitoba to distribute the books to approximately 1,500 classrooms across the Prairies. “Our ongoing partnership with Agriculture in the Classroom is part of our overall commitment to support educational opportunities and initiatives that promote agriculture and its importance to Western Canada,” said Kyle Jeworski, Viterra’s president and CEO for North America. “We’re proud to support organizations like these that strive to raise awareness of our industry to a broader audience.”

ALBERTAFARMEXPRESS.CA • FEBRUARY 2, 2015

Forage producers seeking better lodging control Work is underway to expand the availability of Syngenta’s Parlay By Shannon VanRaes staff

t’s been years in the making, but the Manitoba Forage Seed Association is one step closer to expanding the label of a much requested plant growth regulator. “We’ve done small-plot work up until now, and this coming season we’re still going to be doing small-plot work, but also we are looking to do some field-scale trials,” Kevin Gulay, research manager for the organization, said at its recent annual meeting. The product in question is Syngenta’s Parlay. Gulay said these trials are the most important project the producer organization has worked on over the last few years. This year’s trials will add additional nitrogen to the product to see if yield will increase. “This is a really unique product right now. There are other growth regulators, but none of them are registered (in Canada),” he said. Syngenta Canada was able to register the plant growth regulator for growers of turf-type perennial ryegrass seed last winter, with BrettYoung as the distributor. Research done by the Manitoba Forage Seed Association was key to the successful registration. “Now we’re trying to get a label expansion for Parlay so that it’s registered on all grasses grown for seed, so we’re going to be doing more work in 2015-16 on different grass species,” Gulay said. Grass seed producers have been looking for something to assist with lodging, which makes harvesting difficult. “By adding the Parlay, the plant doesn’t grow as tall, and it’s not going to lodge,” he said. “You also get better pollination, less disease pressure, and it ends up resulting in easier swathing and you get a better yield.” He said it’s possible that the product has already been registered in the United States because that country’s registration process requires less research data in some cases, than Canada.

“One of the problems with grass seed crops is that they lodge really bad when you’ve got high nitrogen rates.” Kevin Gulay

said. “Projects involved different nitrogen timing in grass seed production, looking at fall timing versus spring timing, versus a split application. In most cases we found the split application yielded higher than either the fall or the spring application by itself.” There were also trials done on broadcast phosphorus on perennial ryegrass, which showed no yield increase. “We’re doing herbicide trials as well, which we’ve been doing for many years, looking at things like Canada thistle control in alfalfa, foxtail barley in grasses,” he said, adding that this coming season will also see trials commence on pre-emergent herbicides. shannon.vanraes@fbcpublishing.com

Kevin Gulay (c) talks to seed growers at the Manitoba Forage Seed Association’s annual general meeting in Winnipeg. Photo: Shannon VanRaes

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“Also, and this is just my opinion, but obviously the U.S. is a bigger market, so there is probably more to gain there,” Gulay said. The association is also working on research in a number of other areas. “This past season we also did some crop fertility work,” he

FEBRUARY 2, 2015 • ALBERTAFARMEXPRESS.CA

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ALBERTAFARMEXPRESS.CA • FEBRUARY 2, 2015

Hope for Africa

Deere cuts deepen

Africa could eliminate hunger by 2025 by embracing effective policies on job creation, political stability and social protection, says a senior official with the Food and Agriculture Organization. “Countries in Africa are making significant progress (towards ending hunger), there is a high level of political commitment,” James Tefft said at the recent World Economic Forum in Davos. Others at the event backed that view. Economic breakthroughs over the next 15 years will “improve the lives of people in poor countries faster than at any other time in history,” said the Bill and Melinda Gates Foundation. — Reuters

Deere & Co. will lay off more than 900 employees at plants in Iowa and Illinois in the latest round of job cuts spurred by a decline in grain prices. This round of layoffs represents about three per cent of Deere’s workforce in the U.S. and Canada. The cutbacks come after Deere in August said it would indefinitely lay off more than 600 employees at plants in Illinois, Iowa and Kansas. In November, the company said it expected equipment sales to fall further as lower grain prices discourage farmers from buying tractors, harvesters and other machinery. — Reuters

HEARTLAND Ritz wants farmers to be

covered if feed mills default

But agriculture minister says he’s not planning to put a president/chief executive officer in charge of the Canadian Grain Commission By Allan Dawson staff

f Agriculture Minister Gerry Ritz gets his way, farmers who sell to feed mills will be protected under the proposed Canadian Grain Commission’s producer payment security program. “My direction to them is find a way to incorporate feed mills,” said Ritz. “The direction is, yes, they will be covered. The grain commission’s homework is to find what is the best way to do it.” Federal officials are consulting industry about proposed amendments to the Canada Grain Act, but the plan is to include feed mills along with grain companies under the legislation, Ritz said. “We need to look at how we incorporate them (feed mills)... to make sure farmers receive the majority of their money when they deliver,” he said. “In my mind, it is more the commercialsize ones (feed mills) — the ones that actually buy from producers. I’m not talking about farm-only or Hutterite-only feed mills. I’m talking about the big guys that buy from farmers.” Currently, feed mills are exempt, and only western Canadian grain buyers licensed by the grain commission are obliged to post security to cover what they owe farmers for delivered grain. The Canadian Grain Commission has seen several changes in the last two years, including making inward inspection at export terminals voluntary, and if requested, having them carried out by private providers, not commission inspectors. The commission, which must also now cover its operating costs, has also raised its fees. But there had also been talk of replacing the three government-appointed commissioners who oversee the organization with

Wheat class review

a president/chief executive officer, but Ritz said he wasn’t in favour of such a move. “I’m a firm believer in if it ain’t broke don’t fix it,” he said. “We’ve got a good working relationship across the spectrum with the three commissioners. Each one brings different expertise to the fore. To limit that to a president and some other people under him doesn’t have the same effect.”

Tradition

Governments have traditionally tried to appoint commissioners who represent the grain industry, farmers and the three Prairie provinces. There’s usually at least one farmer, or former farmer, serving as a commissioner. Currently chief commissioner Elwin Hermanson and assistant chief commissioner Jim Smolik have farmed in Saskatchewan and Alberta. Murdoch MacKay, the third commissioner, headed terminal operations for United Grain Growers. Ritz has often said he opposes regulations, but Bill C-48, which contains the amendments to the Canada Grain Act, includes some new ones — including a proposal to license companies that load and ship grain in containers. Farmers will be required to declare the variety of grain they deliver to an elevator — something elevator companies already require — plus the bill, if passed, will make it easier for the grain commission to issue fines. “Well there’s good regulation and then there is other regulations that wrap layer after layer on the onion,” Ritz said when asked about the proposed new rules. “We’re dealing with a set of regulations here... that are actually welcomed by the industry and by our buyers.” And he’s right. The Western Grain Elevator Association wants the grain act to include variety declarations. The legislation will also allow the grain commission to change its security program. Instead of requiring grain buyers to post

Agriculture Minister Gerry Ritz says he wants commercial feed mills that buy grain from farmers to be covered under the Canadian Grain Commission’s producer payment security program. File photo security, it wants grain companies to contribute to a fund that would cover defaults. Keystone Agricultural Producers, Manitoba’s largest farm group, is considering whether farmers should pay into the fund directly since they’ll pay indirectly through grain companies. By paying directly, farmers would have more control over the fund. That’s not far off what Ritz proposed several years ago, triggering mostly a negative response from farmers. “I think there’s been a lot of growth when it comes to the industry and the changes that have been put in place over those eight years since 2006,” Ritz said. “I was never a proponent of scrapping everything completely. What I said was there has got to be a way that is more user friendly... All of these costs tend to migrate right back to the farm gate and farmers bear them so if there is a more efficient, effective way of providing a backstop, which is required, then we have to look at it.”

Although it’s not part of C-48, the grain commission says it wants to consult with the grain industry about its wheat classification system. It is seen by many as an important tool in ensuring Canadian wheat customers are well served, while helping the grain system run efficiently. Ritz said he supports a review. “Wheat buyers are looking for many different types of wheat for many different end uses, he said. “It’s no longer just No. 1 hard red that buyers are looking for. They are looking for some utility-type wheat, some that have to be reclassified in order to pick up the ability to use them in some of the blends these customers are asking for.” Canada’s variety registration system — also seen by many as key to wheat quality control — is still under review. A year ago the Prairie Recommending Committee for Wheat, Rye and Triticale streamlined its operating procedures. Asked if he is satisfied with the change Ritz replied: “I think the only complaints I’ve heard is how long it takes (to bring a new variety to market)... I’m not sure there’s a way we can speed that up. There are some people who want to have their day and their discussion. It is what it is. If at the end of the day there’s a quicker way to do it we will certainly welcome that.” The proposed changes to the grain act and the recently made ones are partly a response to ending the Canadian Wheat Board’s marketing monopoly, Ritz said. “It’s a matter of doing them pragmatically... and doing them efficiently,” he said. “No one farms the way they did five years ago and to force them to maintain the same old way of grading has to be looked at as well. The whole evolution of the process is well underway.” allan@fbcpublishing.com

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FEBRUARY 2, 2015 • ALBERTAFARMEXPRESS.CA

Weigh scale and handling system win F.X. Aherne hog innovation awards The two innovations awarded prizes boost profitability and reduce stress Banff Pork Seminar release

wo hog innovations were recognized with the F.X. Aherne Prize at the 2015 Banff Pork Seminar. Ontario producers Lyle and Maaike Campbell of Birnam Pork won for an innovative piglet weigh scale which boosted profitability in that operation. And Greg Feenstra and Dave Uttecht of Heartland Pork LLC in Alpena, South Dakota, won for their “E Z Tub” hog-handling innovation, which significantly reduces stress on animals and people. The award is named after industry icon, the late Dr. Frank Aherne, a professor of swine nutrition and production at the University of Alberta. The Campbells’ innovative and lowcost scale was built onto a lightweight base that is easily transportable and washable. A lightweight container on top is tall enough that 18-day-old piglets won’t jump out, but low enough to be reachable. The scale design allows for numbers on the scale to be viewable from all sides. The E Z Hog Tub hog handler helps reduce stress on pigs and people during loading, produced faster loading and lower plant losses. The primary cause of stress when moving animals through an alleyway is that handlers have a tendency to move too aggressively, crowding pigs to encourage movement. That causes animals to bunch up and balk at transitions such as doorways. The E Z Tub circular tub-style design works with pigs’ natural response patterns to aid in the loading of market hogs. The pen and gate configuration lets the handler work where hogs can see them and uses the pigs’ circling behaviour to set up a flow onto the trailer. That reduces stress and produces fewer discounts for injured animals at the packing plant. Additional information on the 2015 Banff Pork Seminar is available at www.banffpork.ca.

The ‘EZ Tub’ is a low-cost scale built onto a lightweight base that is easily transportable and washable. Photo: Courtesy Birnam Pork

Support price for skim powder drops March 1 The decrease reflects lower operating costs for dairy producers Staff

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The support price for skim milk powder in Canada will drop from $6.4754 per kilogram to $6.3109 effective March 1, the Canadian Dairy Commission has announced. The support price of butter will remain unchanged. Support prices are the prices at which the CDC buys and sells butter and skim milk powder to balance seasonal changes in demand on the domestic market. They are also used as references by provincial marketing boards to price industrial milk. For dairy producers, this decrease in the support price should translate into a revenue decrease of 1.8 per cent or $1.49 per hectolitre for industrial milk used to make products such as yogurt, cheese, and skim milk powder. “This reduction follows a decrease in the cost of producing milk in Canada

Photo: Thinkstock in the last year. This cost decrease can be seen mostly in feed, milk transportation, fuel, and interest paid,” says Randy Williamson, chairman of the CDC. “We are optimistic that this price reduction will help grow the demand for dairy products.” The margin received by processors for butter and skim milk powder purchased by the CDC, as well as the carrying charges collected by the CDC to pay for the storage of normal butter stocks, will remain unchanged.

ALBERTAFARMEXPRESS.CA • FEBRUARY 2, 2015

Help for managing risk in cattle operations Modules will range from financial literacy and market cycles to currency and market dynamics Alberta Cattle Feeders’ Association release

Alberta Cattle Feeders’ Association has partnered with Lethbridge College to develop a business-risk management curriculum. The programming, available in class, online or in a blended format, will start in fall 2015 as part of the Cor Van Raay Agribusiness Program. “Developing this important curriculum with ACFA and other producer groups will ensure that we are developing what is needed, not only for current students, but for producers and other industry members who, as they grow and succeed, will need to also manage risk within their businesses,” said Stuart Cullum, a vice-president academic of Lethbridge College The need for business risk management programming was identified during a review of agricultural programming. The cattle feeders’ association had also identified increased management skills as critical as family farms become larger business entities. “As cattle prices have increased, industry needs to manage its increased exposure to market volatility,” said John Lawton, a member of the association’s board. “The business risk management programming will provide skills for industry participants currently trying to manage their equity as well as prepare students with a skill set that is in demand in the cattle industry as well as other livestock and grain industries.” The programming will focus on areas such as financial literacy, communications, currency, market tools, cycles, risk and opportunity policies, self-management and awareness, government policy and marketing, and equity in the market. It will include an individual case study. In addition to the flexible delivery modes, students will be able to customize the way they access the learning experiences. Some will access all of them, some will bundle them into courses and some will access one or two to acquire a specific skill set. Instruction will be provided by both college and university faculty as well as from industry. More information can be found at www.lethbridgecollege.ca.

Farms can be held liable for pollution from manure A U.S. court ruling has opened the door to more legal challenges By Ayesha Rascoe washington / reuters

U.S. Federal Court has ruled for the first time that manure from livestock facilities can be regulated as solid waste, a decision hailed by environmentalists as opening the door to potential legal challenges against facilities across the country. A large dairy in Washington state, Cow Palace Dairy, polluted groundwater by overapplying manure to soil, ruled Judge Thomas Rice of the U.S. District Court for the Eastern District of Washington. “The practices of this megadairy are no different than thousands of others across the coun-

try,” said Jessica Culpepper, an attorney at Public Justice, one of the firms that represented the plaintiffs, a collection of public advocacy groups. The case is scheduled to go to trial in March to decide the extent of the contamination and the cleanup. This is the first time the federal Resource Conservation and Recovery Act, which governs the disposal of solid and hazardous waste, has been applied to animal waste from a farm. Large U.S. livestock operations produce hundreds of millions of tons of manure annually. The district court ruling, if upheld, could affect any large livestock facility that produces more manure than it can

responsibly manage, including poultry, beef and hog farms, Culpepper said. An attorney for Cow Palace said it plans to appeal. “There’s a reason no court has ever done this. It’s because the statute was not intended to apply to these situations,” said Debora Kristensen, an attorney for Givens Pursley, a law firm that represented Cow Palace. Kristensen said Cow Palace has already entered into a voluntary agreement with the U.S. Environmental Protection Agency, which enforces the act, to address water contamination concerns. Fertilizer is not considered waste under the act, but the district court found that Cow Pal-

ace was applying more manure to crops than needed. In one instance, the plaintiffs in the case said Cow Palace applied more than seven million gallons (26 million litres) of manure to an already “sufficiently fertilized field.” The district court said Cow Palace’s excessive application transformed the waste, which is “an otherwise beneficial and useful product,” into a discarded material. The court found that Cow Palace’s management of its manure violated the “open dumping” provisions of law. Unlike other federal contamination laws, the act requires violators not only to stop polluting, but to clean up any damage it has caused.

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2015-01-21 2:32 PM

Publication: Alberta Farmer Express Page Position: Junior Page

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FEBRUARY 2, 2015 • ALBERTAFARMEXPRESS.CA

Cash flow really is king Tighter margins have upped the danger level for farms that have expanded or just getting started AARD release

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Cash is the lifeblood of a business, but with so much emphasis on profitability, this can be easily overlooked, says Rick Dehod, farm financial specialist with Alberta Agriculture and Rural Development. “Of course, the bottom line is important, but poor cash flow management can drive a growing and/ or profitable company out of business,” said Dehod. “In the previous five years, we have seen a lot of farm families choose to expand and grow their farms. This has been through the investment of their equity and retained earnings but also with debt.” With margins tightening, the risk to the farm’s viability and ability to meet all of its commitments as they come due has increased, he said. “The risk is especially great for those expanding farms and those individuals in the beginning of their careers who levered their equity to grow.” It is important to review your cash flow projections and your marketing plans, said Dehod. “Cash flow projections are critical, especially in times of need, but you don’t have to wait for a crisis to benefit from good cash flow planning. A properly developed cash flow projection can help a business foresee and prepare for potential shortages.” Cash flow management can also help:

4-H’s Beef Project website offers e-learning modules Alberta Livestock and Meat Agency release

AlbertA FArm Fresh school Supporting and growing a profitable and sustainable local farm direct marketing industry. A two-day conference for producers to learn, network and build capacity in direct market fruit, vegetable and livestock production and marketing. Dates: February 26th & 27th, 2015 location: Pomeroy Inn & Suites, Olds College Campus, 4601 46th Avenue, Olds, AB Participants will: • Access industry specific information and data • Obtain resource materials • Receive support and move forward • Connect with peers • Meet industry suppliers Contact us for more info:

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• Maintain adequate cash reserves to pay bills and payments on time or invest in expanding the business should an opportunity arise; • Reduce interest costs through managed borrowing; • Increase interest income by transferring surplus funds into interestbearing accounts temporarily, if appropriate; • Control costs by having the cash available to take advantage of buying inputs at favourable prices; • Improve relations with the bank manager and trade creditors; • With planning for the next crop year. “Businesses that prepare cash flow projections often learn something about their systems, and the dynamics of their business,” said Dehod. “The process often has other positive outcomes. For example, you might discover that you need to pay more attention to markets to obtain the right price. Or you might get a better understanding of your cost of production so you can determine what a profitable price may be, now that you know your yields.” Winter is a good time for planning, including cash flow management. The Cash Flow Analyzer is available at www.agric.gov.ab.ca (click on the Decision-Making Tools tab along the top and then the Farm Management tab on the left-hand side of the page). More info is also available at the Ag-Info Centre at 310-FARM (3276).

In partnership with the Alberta Livestock and Meat Agency, 4-H Alberta developed an e-learning curriculum for their Beef Project clubs that reflect the changing needs in nextgeneration learning. The Beef Project, which has 3,200 members, is designed to identify needs for improved knowledge in the beef industry. It has multiple learning modules on topics ranging from animal husbandry to organic production and traceability. There is also a “choose a project” module that allows members to understand the various programs they can participate in, in a 4-H beef club. These programs cater to a wide variety of 4-H experience, and include a novice beef project (raising a calf for show), carcass market beef project (raising a steer or heifer

for slaughter), and a leadership project that gives senior members the opportunity to showcase what they’ve learned. “We’ve already seen plenty of positive signs from the Beef Project,” said Bruce Banks, CEO of the 4-H Foundation of Alberta. “Members are giving us positive feedback, inspiring our leaders to adopt these tools in their clubs and also spread the word of the resources. That leads to a knowledgeable future generation of Alberta beef industry leaders.” However, 4-H Beef Club members aren’t the only ones who are using these resources. “The majority of our members is children of Alberta beef producers. They are showing the modules to their parents, who are also learning something,” said Banks. To learn more about the Beef Project, including the e-learning modules, visit www.4h.ab.ca/beef.

New formulation of Grazon staff

Dow AgroSciences has released a new formulation of Grazon that offers improved handling and lower use rates for the 2015 season. Grazon XC contains a new formulation of 2,4-D, which significantly lowers the required use rates, the company said in a news release. Grazon XC is an effective tool

for controlling a wide spectrum of pasture-invading trees including aspen, birch, willow and poplar. It also controls broadleaf weeds that inhibit grass production, including Canada thistle, dandelion and spotted knapweed. The liquid formulation can be applied as a broadcast application or as a spot spray using a backpack sprayer. Grazon XC will be available for purchase through agricultural retailers beginning in February.

ALBERTAFARMEXPRESS.CA • FEBRUARY 2, 2015

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Bill and Jean Carruthers, in their green and red sleighs, head out on a Christmas season sleigh ride across the pastures near Turner Valley, Alta. Photo: Wendy Dudley

Nearly 60 Alberta 4-H clubs receive FCC funding Clubs can get up to $500 for activities and events, and the next application deadline is in the fall Fifty-seven 4-H clubs in Alberta have been given a combined total of $27,750 by Farm Credit Canada to support various local events and activities. In all, FCC gave out $130,000 to 263 4-H clubs across Canada, part of its $1-million, four-year commitment to 4-H Canada. In addition to supporting local 4-H activities, it supports national as well as provincial 4-H initiatives. “The future of agriculture is bright, and we’re proud to partner with 4-H and strengthen the bond between this industry and young people,” said Cory Chalk, director of marketing programs at FCC. “We have a 25-year history with 4-H in Canada and are committed to working together to ensure young people in rural Canada continue to benefit from 4-H programs and values.” The FCC 4-H Club Fund awards up to $500 for projects such as horse clinics, field trips, public speaking workshops, beef-clipping clinics and purchase of equipment, just to name a few. The next application period opens in fall 2015. “FCC’s support enables us to provide unique and valuable programming for our members,” said 4-H Canada CEO Shannon Benner. “Club grants help young leaders reach their full potential and these opportunities would not be possible without FCC’s generosity.” — FCC release

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FEBRUARY 2, 2015 • ALBERTAFARMEXPRESS.CA

Farm jobs need better profile and promotion, says management consultant Increased competition for labour and decreasing rural populations mean farmers need to be smarter about their hiring practices By Lorraine Stevenson staff

How far afield have you looked for employees? Management consultant urges farmers to rethink their recruitment strategies. photo: thinkstock

inding good help for the farm isn’t easy, but part of the problem may be how farmers are trying to recruit, says an MNP farm management consultant. A common complaint is, ‘We can’t find people because the oilpatch has taken them all,’” Peter Manness said at the recent Ag Days conference in Brandon, Man. “But have we done all we can to find people and literally can’t find them? I don’t think that we’ve really done as much as we can to try to solve our labour problems.” Manness said he mostly sees farmers who can’t find employees buying bigger equipment to get the job done faster with fewer people — a very expensive way to deal with the problem, he said. Farm businesses are trying to meet their labour needs hiring local retired farmers who possess the required skills. But when trying to hire mainly from their own local agricultural community, they’re fishing in a dwindling pool as the rural farm population shrinks. They could improve their prospects by looking farther afield, Manness said. Just because someone hasn’t grown up on a farm doesn’t mean they don’t have transferable skills, or couldn’t be trained. Farm-based employment is an attractive prospect to the right person.

“Think about the trucking industry right now,” he said. “I find it hard to believe that there aren’t people driving a truck right now that wouldn’t be qualified equipment operators and whose families would be very interested in having them working in a job closer to home.”

Online presence

But looking farther afield requires boosting the farm business’s presence online, he continued. You are going to need to create an online presence to drive people to you, Manness said, and that’s where he isn’t seeing enough effort. His own Google searches don’t turn up many farm job advertisements, he said.

“I think there’s a huge opportunity to go out and resell agriculture as an opportunity that exists for meaningful employment for people.” peter manness

“If I Googled your farm, what would I find out about you and about your farm business?” he asked. In an interview, he added that the days of putting a two-line ad out on Kijiji or in the farm press and expecting a response are over. A better approach is a combination of Internet advertising and a farm website, detailing who you are and giving prospective employees a way to find out about you and learn about the work opportunity you offer. “I think we’ve got to be able to sell ourselves more,” he said.

“Because if I’m looking for fulltime employment, I’m more likely to call people that have an online presence, so I can learn about them a little bit before I go to see them.” Manness says some farms do fine hiring and retaining staff. They’re the ones who have not only adopted a professional approach in recruitment and hiring practices, but have devoted time to better understanding what employees want and need.

More than money

Those needs and expectations aren’t just about money. Surveys show one in every five workers say they expect to change jobs in the next five years. You need to be clear about benefits, work expectations and what sort of an opportunity you are offering a prospective employee, said Manness. And what they want is job stability, respect in the workplace and work-life balance in addition to fair compensation. Work-life balance has become a bigger issue even among the incoming generation on the farm, he added. Manness said he’s convinced farm workplaces have attractive and unique employment opportunities. What they need to do is talk up the benefits. Meals, use of vehicles and certainly accommodations are all of value to prospective employees. Farmers are also able to offer an outdoor worksite, and opportunities to engage with their work that enables an employee to see the progress and purpose of it. Many farm employees become an integral part of the farm family too, he said. “I think there’s a huge opportunity to go out and resell agriculture as an opportunity that exists for meaningful employment for people.” lorraine@fbcpublishing.com

Farm business adviser Peter Manness says farmers could be doing more to solve their labour shortages. PHOTO: LORRAINE STEVENSON

ALBERTAFARMEXPRESS.CA • FEBRUARY 2, 2015

China’s new ‘artificial weather’ target bigger than largest reservoir It wants to induce an estimated 60 billion cubic metres of additional rain beijing / reuters

hina aims to induce more than 60 billion cubic metres of additional rain each year by 2020, using an “artificial weather” program to fight chronic water shortages. China’s water resources are among the world’s lowest, standing at 2,100 cubic metres per person, or just 28 per cent of the world average. Shortages are particularly severe in the country’s northeast and northwest. China has already allocated funds of 6.51 billion yuan ($1.05 billion) for artificial weather creation since 2008, the State Council, or cabinet, said in a document setting out the program from 2014 to 2020. “Weather modification has an important role to play in easing water shortages, reducing natural disasters, protecting ecology and even safeguarding important events,” it added.

The figure of 60 billion cubic metres is equivalent to more than 1-1/2 times the volume of the Three Gorges reservoir, part of the world’s largest hydropower plant. Artificial rain is created by rocket-launching chemicals, such as silver iodide, into clouds to boost rain. China used the technology, known as cloud seeding, to scatter clouds ahead of the Beijing Olympic Games in 2008. The target, an increase of a fifth from 2013 levels, aims to battle China’s crippling water scarcity, which threatens a long-standing policy of self-sufficiency in food production, as demand from manufacturing and power generation grows. The program is also increasingly used to disperse smog in heavily polluted regions. Around 70 per cent of China’s rivers and lakes have become too polluted to use. Last month China kicked off the

second phase of its South-North Water Diversion Project to send billions of cubic metres of water from central and southern China northwards to Beijing and its environs. But frequent droughts in central and northern China keep the government under pressure to ensure sufficient water supply. China launched its “human affected weather” program in 1958, and has done extensive research in cloud seeding. Last year the government said it had met a target of increasing artificial rain to more than 50 billion cubic metres per year. China’s “cloud water potential” is huge, with average water vapour levels standing at 1.82 trillion cubic metres, the government said. Existing technologies would allow China to potentially induce A farmer walks past a dried-up pond near his farm in Changfeng county, as much as 280 billion cubic Anhui province back in May 9, 2011. China has announced plans to induce metres of additional rain each additional rain through an artificial weather program to fight chronic water shortages. photo:1 Reuters year, it added. SEC-RYLEY14-T_AFE.qxd 10/15/14 12:55 AM Page

Ruble plunges prompts Monsanto to open first seed plant in Russia The falling rouble has made local production more attractive

Monsanto, the world’s largest seed company, plans to open its first plant in Russia in coming years, stepping up its activities in the world’s fourth-largest grain producer as it seeks to counter the effects of a plunging ruble. The ruble has almost halved in value against the dollar in the past year, hit by falling oil prices, a crumbling economy and political tensions, making local production more attractive. “We have plans to increase local-produced seeds in Russia and to have a facility there,” said Leticia Goncalves, who heads Monsanto’s operations in Europe and the Middle East. Monsanto currently operates in Russia through a network of local partners and distributors. Goncalves declined to name them or give financial details of the firm’s ongoing or future business in the country. Last year the company said it would launch a corn seed plant in neighbouring Ukraine, whose currency has also dived, with initial investments of about $140 million possibly rising to $300 million over several years. Ukraine is the world’s sixthlargest grain grower this season, and Goncalves said the region remained a priority for Monsanto. “We still believe that Ukraine and Russia both are long-term opportunities for our business and we want to make sure we are in a position to accelerate our business growth despite the short-term geopolitical and macroeconomic challenges,” she said.

No GMO plans

Ad Number: SSEC-RYLEY14-T Publication: Alberta Farmer Express 3Col x 133 (6” x 9.5”) Non Bleed

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Genetically modified organisms (GMOs) are not used in seed production in Ukraine and Russia, as is generally the case in the European Union, which has been historically hostile to biotech crops.

Despite a recent EU policy shift that some anti-GMO activists said might usher in GMO crops, Goncalves said Monsanto did not plan to try to reintroduce biotech products in the bloc. Monsanto, whose MON 810 maize (corn) is the sole GMO crop allowed for cultivation in the EU, withdrew all pending approval requests to grow other GMO crops in the EU in 2013 due to a lack of commercial prospects there. The EU recently reached a compromise giving member states the possibility to ban cultivation of a GMO, while opening the way for EU authorities to review pending approvals. But Goncalves said it would be very difficult to operate in a nonunified market. “You can imagine movement of illegal seeds between a country that has GM and a country that is not favourable,” she said. Past experiences showed GMO seeds stolen in Argentina were being illegally planted in Brazil, she said. Growth in the EU could instead come from the firm’s core business of fruit and vegetables seeds, conventional row crops and crop protection products, as well as future technologies. The company plans to invest at least 500 million euros (US$574 million) over 10 years to expand seed production in Europe. It had already injected $150 million into two French plants, Goncalves said.

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FEBRUARY 2, 2015 • ALBERTAFARMEXPRESS.CA

Rural India slowdown threatens Modi’s promise of ‘better days’ Tractor, motorcycle sales are sliding due to bad weather and falling crop prices By Rajendra Jadhav padali, india / reuters

ugar cane grower Nilesh Kadam has abandoned plans to buy a tractor. He doesn’t have enough money, like many Indian farmers hit by erratic weather and sliding prices for the cotton, soybean and rubber they produce. Tougher times in rural communities spell bad news for Prime Minister Narendra Modi, who swept to power last May with a promise of “better days” — new jobs and development to lift hundreds of millions of Indians out of poverty. “I was expecting a hike in cane prices this year, but mills are paying 20 per cent less than last year. I don’t have enough money to buy even a motorcycle, let alone a tractor,” says the 29-year-old Maharashtrian farmer. It’s not just the weather gods and capricious markets that are to blame for the hardship besetting Kadam’s village of Padali, 280 kilometres south of Mumbai. A shift in government spending ordered by Modi is also hitting rural consumers and the industries that serve them. “Rural consumption was one of the pillars holding up growth,” said Aditi Nayar, senior economist at ICRA, the Indian arm of ratings agency Moody’s. She expects weak demand in India’s rural areas to have contributed to a slowdown in economic growth in OctoberDecember from 5.3 per cent in the previous quarter. Tractor maker Mahindra & Mahindra is idling its factories for a few days a month after sales slid by nearly a third towards the end of last year. Consumer goods firms and automakers have also reported weak sales. More than 800 million of India’s 1.25 billion people live in the countryside, accounting for 35 per cent of the economy. Modi’s nationalist party faces the verdict of voters towards the end of this year in Bihar, a large state in the northern Hindi belt where many of India’s rural poor live. West Bengal and Tamil Nadu are among major states that go to the polls in 2016.

Welfare cutbacks

Seeking to woo rural voters, India’s last government raised grain purchase prices, bailed out indebted farmers and promised 100 days paid labour a year to anyone who wanted it. The measures boosted the spending power of rural consumers and cushioned business

from a fall in urban demand after the 2008 financial crisis. Eventually, though, they stoked inflation and forced the Reserve Bank of India to hike interest rates. To cap inflation and state borrowing, Modi has limited rises in farm support prices to below the inflation rate and scaled back the jobs scheme. He wants to invest savings in infrastructure and skills to boost India’s long-term growth. While inflation has eased with these policies, firms that profited from booming rural demand are struggling due to the sudden slowdown. Rajesh Jejurikar, chief executive of the farm equipment and two-wheeler division at Mahindra & Mahindra, said delayed rains, poor crops and reduced disposable incomes had hit tractor sales at the market leader. Trends show a striking divergence between town and country sales of two-wheelers: motorcycles — more popular in the countryside — fell 3.5 per cent in December while scooters, ridden mainly by city dwellers, leapt 24 per cent from a year earlier, industry figures show.

Global commodities fall

Modi’s shift from policies that support demand to ones boosting investment and productivity have also coincided with a steep fall in global prices of farm commodities, making imports cheaper and hitting Indian exports. “Exports of many commodities have become less lucrative and in some cases unfeasible,” said Faiyaz Hudani at Kotak Commodity Services. The government’s ability to ramp up spending on roads, railways and irrigation projects that would benefit rural India is, meanwhile, hobbled by budget constraints. Aides to Finance Minister Arun Jaitley have advised him to loosen fiscal deficit targets in next month’s budget to create room to invest. It’s not clear, though, whether he will do so as that could delay a growthboosting interest rate cut by the central bank. Since his general election triumph, Modi’s party has racked up a series of gains in state polls — including in Maharashtra. But Kadam, who voted for a rival party, isn’t convinced and says the patience of rural voters is being tested. “During the campaign, Modi was saying better days are coming. Where are the better days?” the young Maharashtrian farmer asks. “He has made things worse for us.”

“I was expecting a hike in cane prices this year, but mills are paying 20 per cent less than last year. I don’t have enough money to buy even a motorcycle, let alone a tractor.” Nilesh Kadam 29-year-old Maharashtrian farmer

A farmer plucks radishes from a field on the outskirts of Jammu January 14, 2015. Tougher times in rural communities spell bad news for Indian Prime Minister Narendra Modi. photo: REUTERS/Mukesh Gupta

Albertafarmexpress.ca • february 2, 2015

St. Lawrence Seaway completes big comeback Despite a late start, the seaway nearly hit its target for shipments By Alex Binkley af contributor

fter a month-long delay in the start of full navigation on the Great Lakes last spring, the St. Lawrence Seaway has rebounded with its best year since the 2008 recession, handling seven per cent more tonnage than in 2013. More than 12 million tonnes of Canadian and American grain, almost 50 per cent greater than in the year before, led the way followed by healthy increases in bulk and general cargo, says statistics released by the Seaway Management Corp. In total, the tonnage came in at 39.6 million tonnes, just a few shiploads short of the 40 million tonnes the seaway was hoping for at this time last year before the extent of the freeze-up during the winter of 2013-14 became apparent. “There can be little question that the seaway proved its value as a vital transportation artery in 2014,” said seaway president and CEO Terence Bowles. While the seaway usually begins operation in late March, it took a major ice-

breaking campaign by the Canadian and American Coast Guards to open the Great Lakes to full navigation by late April.

Blowout year

Bowles called the rise in grain shipments a blowout. It was “the standout feature of the season, as farmers and grain merchants furiously sought avenues to move the bumper crop from 2013 that had clogged rail lines,” he said. More than nine million tonnes of grain were shipped through the Port of Thunder Bay. Other strong cargoes included iron and steel products and shipments of road salt to replenish inventories that had been severely depleted during the harsh winter of 2013. “The influx of ocean vessels into the St. Lawrence Seaway was unprecedented in recent history,” Bowles added. “On multiple occasions in 2014, there were more than 50 ocean vessels within the Great Lakes Seaway System.” With so much grain available to move after shipments to the West Coast were disrupted by bad weather last winter, the presence of the ocean vessels became

crucial to keeping the terminals in Thunder Bay flowing. During 2013, 3,900 ships transited the seaway. Last year, there was just nine more, yet 2.6 million tonnes more freight were moved, which suggests few ocean vessels sailed from the Great Lakes in ballast because there was no outbound cargo. If shipments of iron ore and coal had even matched the 2013 results, the system would have handled another 3.5 million tonnes. However, ore was off 32.5 per cent at 6.7 million tonnes while coal dipped by five per cent to 4.2 million tonnes. Fuel shipments were down six per cent to 3.5 million tonnes. The 2014 season saw the widespread deployment of new freighters ordered by Algoma Central, CSL, Desgagnes and FedNav. “Boasting sharp increases in fuel efficiency and reductions in emission levels, these new vessels are part of a billion-dollar fleet renewal effort being undertaken by both domestic and ocean carriers,” Bowles said. “These investments underline the seaway’s enduring value and the faith of key stakeholders in its future.”

PHOTo: thinkstock

Sharpen your pencil before deciding whether to spray Determining the economic threshold on when it pays to spray is not cut and dried, says research economist

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he decision on whether to spray or not can be a difficult one for producers, says an Alberta Agriculture and Rural Development specialist, and the wrong decision can have serious financial consequences. “Today’s farm business managers wear many different hats, and mycology and entomology may not be their area of expertise,” said research economist Nevin Rosaasen. “The decision to spray a fungicide or insecticide can be complex, and lastminute choices at spraying time stand a good chance of missing the mark.” Determining the economic threshold on when it pays to spray is not as cut and dried as a simple insect count, a specified severity of infection rate, or basing the decision solely on the weather forecast, said Rosaasen. While all of these variables are important in making the most informed decision, the decision should ultimately be made based on profitability, and the best way to determine that is by using a partial budget, he said. “First, determine your farmspecific economic cost of spraying the pest that you are trying to control,” said Rosaasen. “Determining your costs is the left-hand side of the ledger of a partial budget and should include not only the cost of the pesticide, but all variable costs including fuel, time, labour of both the sprayer operator and water hauler. Fixed costs include depreciation on the sprayer, chemical handler, water truck, tanks, etc. Divide these by all the acres that you spray over the estimated lifetime of these assets to give you a rough fixed cost per acre.

“Knowing what it costs you to spray is essential before evaluating the potential benefit, loading up the sprayer and hitting the field.” On the direct-benefit side of the partial budget, evaluate how the decision to spray may affect yield. “Factors to consider include the expected yield savings and price of the crop you are protecting (use realistic yield estimates and conservative estimates for price),” he said. “You may also want to net off the crop lost from compaction and tramping — roughly two per cent crop loss on 100-foot booms. “The net of these gives insight into the ‘direct’ profitability of spraying pests. If it is negative, here is where you stop. If you have defined a threshold, you would know where you would start.” Even when the numbers are right, there are other considerations, Rosaasen added. “Understanding that your field is a complex ecosystem, that, when shocked with a fungicide or insecticide, may have unintended consequences on beneficial insects or fungi and subsequent infestation levels, is key,” he said. “When infestation rates and benefits of spraying outweigh the costs, producers need to act to protect their profitability. However, when you find that deciding to spray or not to spray is based on costs and benefits being nearly even, letting nature run its course may have longerterm net benefits for your integrated pest management and ultimately, your longer-term profitability.”

FEBRUARY 2, 2015 • ALBERTAFARMEXPRESS.CA

Expect volatility in 2015 beef business, says market analyst Will 2015 be a repeat of 2014’s amazing ride? Unlikely, says beef industry analyst By Lorraine Stevenson staff

anadian cattle and beef prices reached all-time highs in 2014, but 2015 will be a different story, says market analyst Anne Wasko of Gateway Livestock. Retail prices will remain high and are expected to go even higher, while export and domestic demand should stay strong. But there are changes coming to the supply situation and more volatility is coming to the market, Wasko said at the recent Ag Days event in Brandon, Man. Last year, the market headed straight up week after week during what she dubbed “the perfect storm” of customers willing to pay high retail prices and a North American inventory of tight supply. “This year will be very different than last year. It’s not straight up from here,” she said. “I do think we’ve moved into a price plateau as far as where prices can trade.” The Canadian cow numbers are down, which comes as no surprise to anyone, said Wasko. “I think when we do see the StatsCan release with the numbers for this year (in the third week of February) they’re going to show it down again, and we did not move into any kind of expansion phase,” Wasko said. She noted producers did sell fewer cows last year, but the cull rate, as a percentage of the size of Canada’s cow herd, remains high. “It’s likely up around 13 per cent. We’re going to need to see that number drop down into that 10 per cent or below bracket before we can say we’re in expansion,” she said. And watch what producers are doing with 2014 heifers, she added, because that, plus what does or doesn’t happen at the slaughter plant, will tell that tale. “The only way we’re going to grow a herd is seeing more heifers and slowing the cow kill down.”

Bruce Anderson grooms a black Angus bull at the Ag Days bull congress. This bull and others will be up for sale on Anderson’s farm March 28. Photos: Shannon VanRaes

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Big liquidation over

However, we are past the big liquidation years post-2005, Wasko added. “In the last four or five years, we’ve been in a kind of consolidation phase, where we’ve been just kind of dropping numbers a per cent a year.” But it’s a different story south of the border. There have been significant improvements in moisture conditions in the U.S. this past year, leading analysts to anticipate

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the soon-to-be released U.S. cattle inventory to show Americans are now in an expansion phase. The rains have returned, and the cows are coming back with them, said Wasko, noting that 20-year data kept on U.S. pasture conditions showed at Nov. 1, pastures were the best they’ve been in two decades. That’s the exact opposite of 2012, when they were at their worst.

“This year will be very different than last year. It’s not straight up from here.” Anne Wasko Gateway Livestock market analyst

“Three-quarters of the U.S. cow herd saw great moisture conditions in 2014,” she said “That’s why they have already moved into what we believe is expansion phase.” There continues to be tight supplies on the beef side of the equation, and demand for beef is also expected to stay strong, she said. But the question arising through 2015 will be how it will hold up as more pork and poultry eventually come on the market. Right now, the USDA is forecasting U.S. pork production up four and five per cent in 2015 as the declines from the PED virus are made up. There is a similar percentage increase in annual broiler production too. “Retail pork prices are under lots of pressure. Even though pork supplies aren’t really larger today, the industry is pretty confident they’ll be larger by summertime and possibly larger after that,” she said. “Those things are making the big differences as we go forward into 2015.” Overall, the year ahead for cattle producers looks to be one of trading ups and downs, and more volatility, she said. Last year was all about moving from one price range to another. “2015 is going to be about finding our range,” said Wasko, adding producers should be prepared for some big swings. “2014 was moving us up out of one price range to another. Now we’ve got there. Now I think we find a bit of trading range within this area.” lorraine@fbcpublishing.com

ALBERTAFARMEXPRESS.CA • FEBRUARY 2, 2015

Chipotle’s pork plight could hurt first-quarter results Audits found the supplier was non-compliant with company welfare standards reuters

hipotle Mexican Grill Inc.’s decision to suspend purchases from a pork producer that ran afoul of its animal welfare rules could bolster its reputation with diners, but threatens sales and profits this quarter. The burrito chain’s move caused a supply shortfall that is hitting about one-third of its roughly 1,800 U.S. restaurants. Diners choose braised pork “carnitas” as the protein in about seven per cent of all burritos, tacos, bowls and salads sold at the chain, Miller Tabak + Co analyst Stephen Anderson said. Anderson said the move should strengthen Chipotle’s relationship with diners, many of whom like its “food with integrity” policy that focuses on using organic produce and antibiotic-free meats when those ingredients are available. “It shines their halo, but it has the potential to affect firstquarter” results, said Anderson, who expects most Chipotle customers to switch to alternate proteins. Citing the risk of lost sales, Anderson lowered his growth

forecast for sales at established restaurants to 10 to 10.3 per cent from 11 per cent. The supply crisis underscores the clash between the U.S. agriculture industry, commodity traders, food companies and American consumers, who have become increasingly concerned about what happens to their food before it reaches their plates.

Inconsistencies found

Chipotle made the decision Jan. 9 to cease buying pork from the unidentified supplier after one of its own auditors found “inconsistencies” with company standards requiring that pigs be raised with access to the outdoors or in deeply bedded barns. Chipotle also bans the use of antibiotics, but that was not the issue in this case, spokesman Chris Arnold said. Arnold declined to name the producer. Chipotle would not say how much pork it buys each year. It is not sure how long the shortages, which are largely confined to the eastern United States, will last. Niman Ranch, Chipotle’s biggest pork supplier, will increase its shipments by 15 to 20 per

The sign for Chipotle Mexican Grill’s restaurant is seen in Westminster, Colorado. cent by tapping into its reserves, but that won’t make up the entire shortfall. Finding additional supplies may be challenging for Chipotle, given that hog and beef herds in the United States have remained small, resulting in

high prices for both organically and conventionally raised beef and pork. While animal rights activists heralded Chipotle’s decision to suspend the supplier that violated its rules, others were dismissive of supply chain squeeze

photo: reuters

having much impact on the broader food or farming sector. “It sounds like the problem can be fixed as soon as they take the little pigs for a walk,” said James Burns, president of Chicago-based JBS Trading Co., a commodities brokerage firm.

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FEBRUARY 2, 2015 • ALBERTAFARMEXPRESS.CA

Community news and events from across the province

Looking for a lesson in farm safety? Head to the city — Safety City, that is By Jennifer Blair af staff / red deer

arm kids learn by doing — and that’s how farm safety is taught at Safety City. “Every program starts with a lesson in the classroom,” said executive director Judy Douglas, who manages the non-profit organization in Red Deer. “And in every program they move on to do some activity. They always practise what they learned.” A Red Deer fixture — in no small part due to the miniature cityscape and barn that can be seen from a major city thoroughfare — Safety City was formed in 2001 with the goal of preventing injuries in children through lessons in fire, bike, pedestrian, and farm safety. Since then, the program has expanded to reach between 2,500 and 3,000 children every year, who come for school programs, summer camps, and birthday parties. And roughly half those kids are from rural centres across central Alberta.

A hands-on lesson in dugout safety challenges kids to climb a white plastic ramp that’s the same angle as a real dugout. Photos: Jennifer Blair

Roughly half the kids who visit Red Deer’s Safety City are from rural areas, says executive director Judy Douglas.

“Most of the kids who come through the program are not necessarily farm kids, but they visit the farm sometimes,” said Douglas, adding hazards on the farm are different from ones in town.

equipment, dugouts, and construction zones. There, they learn to “aim for safety,” said Douglas. “Each letter — A, I, M — stands for something,” she said.

In Safety City’s barn, the children are guided through 12 interactive stations where they can practise lessons in farm safety, including safety around livestock, chemicals, farm

jennifer.blair@fbcpublishing.com

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A — stands for assessing the situation; I — is for identifying the hazards; and M — stands for managing behaviour. In one corner of the barn, the kids are given a hands-on lesson in dugout safety. Against the wall stands a white plastic ramp that’s “the same angle that the sides of a dugout would be,” said Douglas. After kicking off their shoes, the kids try — and fail — to scramble up the ramp. “They just think they could climb back out,” said Douglas. “If they go and take a run at it, they can climb up, but you can’t do that if you fall in a dugout. “That makes it real to them.” Each lesson reinforces that many farm accidents are preventable, she said. “Everybody who’s on the farm or on the acreage has to be aware of the dangers and know how to manage their behaviour,” said Douglas. “Kids are quite capable of learning those things. They just need to be exposed to it and taught it, and then it needs to be reinforced.”

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Albertafarmexpress.ca • February 2, 2015

what’s Wayne Burwash given horse industry

Send agriculture-related meeting and event announcements to: glenn.cheater@fbcpublishing.com Feb. 5: Beef Winter Management Field Day, Green Court Community Hall (northwest of Mayerthorpe on Hwy. 43), Mayerthorpe. Contact: Melisa Zapisocky 855-521-2400 Feb. 5: Current & Connected conference, Black Knight Inn, Red Deer. Contact: Liz Robertson 306-466-2294 Feb. 9: Getting into Restaurants workshop, Agri-Food Business Centre, Leduc. Contact: Eileen Kotowich 780-853-8223 Feb. 10: HedgingEdge Commodity Marketing Course, Executive Royal Inn, Nisku (also Feb. 11 in Lethbridge). Contact: Rick Taillieu 780-780-6167 Feb. 10: Managing Information for Profit in Your Cow Herd 2015, Days Inn and Suites, High Prairie (also Feb. 11 in Vermilion; Feb. 12 in Olds; Feb. 13 in Lethbridge). Contact: Ag-Info Centre 1-800-387-6030 Feb. 11: 2015 Farm Succession Planning Workshop, Cremona Community Hall, Cremona (also Feb. 13 in Acme). Contact: Sarah Schumacher 403-361-2027 Feb. 11: Beavers in Our Landscape, Wilton Park Hall 27474 Twp & Rge Rd 502 (11 km NE of Calmar), Calmar (also Feb. 12 in Winfield). Contact: Kim 780-387-6182

distinguished service award

Veterinarian has been active in research, equine welfare, breed improvement, and service to the horse industry

r. Wayne Burwash’s contributions to the Alberta equine industry have been recognized by the Horse Industry Association of Alberta with its 2015 Distinguished Service Award. The Balzac native has been a practising vet for more than four decades, and since 1977 has operated Burwash Equine Services. He has been a mentor for other veterinarians, a winner of Alberta’s Veterinarian of the Year award, and his practices have been a part of the Distributed Veterinary Learning Community with the University of Calgary’s faculty of veterinary medicine since its inception. He is also a founder of the Alberta Quarter Horse Breed-

ers Group, helping to establish quality horse sales locally as well as internationally by marketing Alberta-bred horses to Europe. He has been a leading breeder for the Alberta Horse Improvement Program, breeding champions such as Kilomax, Lopin Foran Invite, and Soo Good. He also has served on the executive and committees with numerous organizations. “Dr. Wayne Burwash truly fits the definition of what it means to offer distinguished service,” said Jean Kruse, president of the Horse Industry Association of Alberta. “His contributions to the equine industry past and present have not just been based in Alberta but globally.”

Dr. Wayne Burwash Photo: Dr. Darrell Dalton

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