GNN111107 by Farm Business Communications

Volume 37, Number 17 | November 7, 2011

$4.25

PRACTICAL PRODUCTION TIPS FOR THE PRAIRIE FARMER

www.grainews.ca

Six steps to better tank cleanout Is that sprayer really clean? Certain products can cling to tanks, filters and screens, only to be released later and harm susceptible crops BY ANGELA LOVELL (WITH THANKS TO TOM WOLF)

mproper or inadequate cleaning of sprayers following the application of Group 2 herbicides can cause significant damage to canola and other susceptible crops. If not cleaned out thoroughly, residue can hang around in the sprayer tank, nozzles or screens. Tom Wolf, a research scientist at Agriculture and Agri-Food Canada at Saskatoon, Sask., has done extensive research into sprayer cleanout procedures, and says that it’s not only important to be thorough when cleaning out the sprayer, but it’s also important to know when it’s necessary to be especially careful. “You need to know what’s in the tank,” says Wolf. “And you need to know what kinds of products may cause you problems and which ones won’t.” There are hundreds of herbicides on the market, says Wolf, and because of the proliferation of different brand names containing the same active ingredients, it’s not always easy for farmers to know what the active ingredient is. With tank mixing now deregulated by the Pest Management Regulatory Agency applicators could also encounter some incompatible mixes. “Producers have to educate themselves and know when to be careful,” says Wolf. “Once you have identified a possible problem then you have to take the appropriate action.” Not all products are going to cause problems in subsequent spray operations, even if some residue remains. “I think most farmers know that there are some products are not an issue, where a tank clean out problem has never been reported,” says Wolf. “Like glyphosate — it’s watersoluble, it washes out very readily with plain water and it tends to lose its effectiveness when diluted a reasonable amount. So even if you have some residue,

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PHOTO : DARWIN KELLS

Group 2 damage to canola in a field near Elfros, Sask. The crop on the left shows significant delayed growth. and it gets diluted, it will be at a concentration where its effect is not noticeable.” Other products, like Group 2s can be more problematic because they are highly effective at very low doses. “You can apply them at one thousandth of the recom-

fall you get essentially a double whammy in terms of the exposure of the crop,” says Wolf, “so that contributes to the potency.” Older formulations of Group 2 products had clay-based carriers that tended to adhere to tank walls, plastic parts and build up

Not all products cause problems, but some can even in tiny amounts mended rate and they can cause damage to a very susceptible crop,” says Wolf. Group 2s are also absorbed by plants through the leaves and the soil, so they may have some degree of persistence in soil. “The persistence may be just days or weeks but if you get an inopportune rain-

on nozzles and screens, then slowly release themselves over successive applications. Recently DuPont, the primary manufacturer of Group 2 herbicides, has changed the formulations to make them easier to clean out. Wolf feels that many of the problems associated with Group

2 products may be alleviated by this change in formulation, he recommends following the steps below to effectively clean out the sprayer, regardless of the products being used.

RINSE IN THE FIELD FIRST Accurately measuring the amount of product necessary for the spray operation and accurately dispensing it in the field is important to minimize leftover spray solution. Once spraying is done, spray any remaining product out in the field. Over-spraying what has just been sprayed is fine because the registration process requires that the active ingredient in the herbicide be safe at twice the label rate, so it’s designed to accommodate overlap. Wolf suggests speeding up a little bit so as to under-apply the remaining product if there is any concern.

In This Issue

Have clean water available in the field and add 10 times the sump’s remnant of clean water to the sprayer, circulate it and then spray that out (also in the field). Then repeat the process again. Having a clean water tank on the sprayer and a wash-down nozzle makes this job easier. You have now completed the first rinse operation before you fold up the booms and head back to wherever you plan to do a more thorough cleaning.

CHECK THE SCREENS Now, take all the screens out of the sprayer and inspect them. If there is residue on them clean them thoroughly. There are screens in the nozzle bodies and this is often where residues accumulate and can reintroduce themselves into the

» CONTINUED ON PAGE 4

Wheat & Chaff ..................

Features ............................

Farmer Panel ....................

Crop Advisor’s Casebook .. 10 Columns ........................... 15 Machinery & Shop ............ 29

Fine tune your fertilizer rates by field JASON CASSELMAN

PAGE 5

When are land prices too high? MARIANNE STAMM PAGE 23

Cattleman’s Corner .......... 37 FarmLife ............................ 43

/ grainews.ca

NOVEMBER 7, 2011

Wheat & Chaff LYNDSEY SMITH

ADDING MOISTURE TO GRAIN It’s quite common for me to get requests for articles that are two or three years old. With the help of our digital archives (available to all subscribers at www.grainews.ca; click on “Digital edition” in the top right-hand corner), it’s relatively easy to find your favourite articles on your own. Even still, I often find myself on the phone with a reader digging into the last five years of issues to find a certain story.

What is rare, however, is receiving several phone calls for the same story in a matter of weeks. That’s exactly what happened this October. I’ve actually lost count of the number of farmers looking for a 2009 story about how one farmer in Alberta added moisture to grain. What’s also interesting is that the calls came from each Prairie province — a rarity, that’s for sure. But hot, dry harvest weather seemed to be nearly universal this year (sorry, farmers in the Peace Region of Alberta, I know you are one of the few exceptions). The problem with too-dry grain, of course, is that you have fewer tonnes to sell. When the “How I added water to grain” article by Mark Horvath ran in the November, 2009, issue of

Grainews, canola was about $7 a bushel. At that paltry sum (by today’s standards), Horvath estimated that selling canola at six per cent moisture versus 10 would cost him $1,071 per 3,600-bushel bin. With today’s prices, that figure is nearly double. The time, effort and learning curve required to add moisture to grain certainly seems worth it with those kind of numbers. Horvath, through trial and error, figured it took about 40 gallons of water to bring 500 bushels of canola up one per cent of moisture. He also figured that all it took was some duct tape to attach the hose and a quick-running auger to get good coverage. The ride from home to the elevator was typically enough for the wet-looking grain to even out the moisture content and test just fine. Horvath does say in his article that not only did he make some money on the moisture top-up, but he also had lower dockage on the rewetted grain. Are there risks with doing this? Of course. You could add too much water, or if coverage is uneven you could end up creating wet pockets of grain that could pose a problem if the grain ends up sitting in the truck for any length of time. But don’t take my word for it — look up the article online, or dig out your old issues of Grainews for the full details. Let me know how it works out, if you do try it!

GRAIN MARKETING AND FARM FINANCE

“Yes, you can talk to him. Or you can talk to someone who knows what she’s talking about.”

Write, Email or Fax SUBSCRIPTION INQUIRIES: Monday to Friday, 8 a.m. to 4 p.m. (CST) 1-800-665-0502

U.S. subscribers call 1-204-944-5568 or email: subscription@fbcpublishing.com If you have story ideas, call us. You can write the article and we’d pay you, or we can write it. Phone Lyndsey Smith at 306-731-3637 Fax to 204-944-5416 Email lyndsey@fbcpublishing.com Write to Grainews, 1666 Dublin Ave., Winnipeg, Man. R3H 0H1

HEARTS

The November issue of Grainews is the grain marketing and farm finance issue. This month, Neil Blue spells out how to weigh the true cost of storage versus the eventual price you receive for your grain (page 28). It seems a simple concept on the surface, but it’s always a good idea to take the little extra time to compare not just the capital cost of the storage, but also the opportunity or interest cost of holding inventory. The extra 50 cents a bushel gleaned a few months down the line may not look so sweet once you calculate interest paid on loans in the same time period. Along the lines of farm finance, Earl Smith does a great job of laying out measuring

your farm’s return on assets and return on investment (page 26). These numbers are helpful internally to gauge how your farm is doing year over year, but also to gauge whether new investment is better made off the farm. As always, a current net worth statement is the starting point. Fall and early winter is the perfect time to tackle this project (if you don’t have software doing it for you already). Marianne Stamm relates her own personal experiences with the incredible rise in land prices in her home area of Alberta (page 23), and asks the question “When is land too expensive?” The answer, it seems, is at least somewhat dependent on how close that land is to your home quarter. Is that always the smartest move when land prices are sky high? In hindsight, yes, sometimes it is, but there’s also such thing as spreading resources far too thin. Stamm reminds us that buying land should be a financial decision, not an emotional one, but that’s sometimes easier said than done.

RIGHT RATE BY FIELD, NOT BY CROP Now to switch gears to agronomy. This summer, as I toured around at field days and demo plots, an interesting discussion came up — do you develop a crop-specific fertilizer blend in the spring, or do you change rates based on the field? Interestingly, many farmers were closer to running a basic canola or wheat blend than they were fine tuning rates by field. Yes, it’s likely you wouldn’t put sulphur down with cereals but you would with canola, but realistically you could be leaving yield on the table or be mining your soils if you’re applying fertilizer at general rates across the farm. At the outset, it would take a bit of work (depending on your record-keeping, soil-testing history, etc.) to get a good baseline of existing soil nutrients and determine the nutrient-providing capacity of the soil, but once the hard work is done, it does get easier. With a good baseline to work from, keeping track of fertilizer added and crop yields (and don’t forget to add or subtract the value in the residue depending on what you do with it!) should start to paint a pic-

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THE BATTLE FOR THE BOARD I’d be a terrible agricultural journalist indeed if I didn’t at least mention the political drama and mayhem unfolding in Ottawa and the Prairies over the government’s recent bill to end the Canadian Wheat Board’s single-desk powers. Just this week the Globe and Mail is reporting that several Conservative MPs should abstain from voting on Bill C-18 (the bill to end the single desk) because they have a vested interest in grain-farming operations. Before that there was mudslinging going on between the National Farmers Union and Manitoba’s Keystone Agricultural Producers due to KAP not throwing money into the pro-board movement. Of course, that’s not even starting to talk about the various pro- and anti-board press releases filtering in to my inbox each day. I hesitate to even wade into the debate, as, in all honesty, I don’t necessarily feel my opinion really matters any. After all, I don’t market any grain. I certainly do have questions about what the open or dual market will look like. How will short line railways be affected? Will producer car loading sites be protected? And on the other side, I do wonder how the board figures it’s fair to use ALL permit book holders’ money to fight the government when a good number of them support the government’s decision. That doesn’t seem fair, and I wager that if funds were collected based on deliveries from pro-monopoly farmers, the funding pool would be very shallow indeed. From this outsider’s point of view, it’s most certainly an interesting time to be a part of agriculture. I haven’t been in this business that long, but even three or four years ago I never would have thought the end of the board’s monopoly would have happened in my lifetime. In my mind, it will. Others disagree, of course, but time will tell. I do see letters to the editor now and again on the topic, but many of them are form letters sent to every publication out there. If you’d like to see your opinions printed in a Grainviews section of this magazine, please be sure to send me an exclusive letter. Keep it to 300 to 400 words and be sure to sign your name and hometown. Anonymous letters will not be printed. Lyndsey

Correction:

Ask for hearts

When you renew your subscription to GRAINEWS, be sure to ask for Six Please Be Careful, We Love You hearts. Then stick them onto equipment that you, your loved ones and your employees operate. That important message could save an arm, a leg or a life.

ture as to what field-specific rates should look like. For more on the topic, read Jason Casselman’s story on page 5.

Find us on Twitter: Lyndsey Smith is @grainewsgal Lee Hart is @hartattacks Scott Garvey is @machineryeditor

On page 4 of the October 3 issue of Grainews, the distributor for two-row malt barley CDC Meredith and two-row feed barley CDC Austenson should have been listed as SeCan. †

NOVEMBER 7, 2011

grainews.ca /

Wheat & Chaff Farm safety

Farm safety

Farm safety is your responsibility

arm owners, operators and managers are responsible for knowing and applying best management practices and laws to ensure the health and safety of everyone who lives on, visits or works on their farms. Read that sentence again. It means you are responsible for the safety of everyone who lives, works or visits your farm or ranch. Everyone. Whoa! That’s a mighty big chunk to chew. That’s why the Canadian Agricultural Safety Association came up with the Canada FarmSafe Plan. You can download a free copy of the basic core plan at www. planfarmsafety.ca. The Canada FarmSafe Plan is straightforward and logical. It provides recommendations on best management practices that will help you protect the health and safety of everyone on your farm. Think of the plan as another business risk management tool. The plan’s best practices recommendations provide you with guidance on developing an effective health and safety program for your farming operation. Follow the plan, and you’ll be able to develop a program to meet or exceed the legislated health and safety requirements in your province. If you are in doubt, consult your provincial regulator to verify local requirements. Remember, there is nothing wrong with voluntarily exceeding health and safety standards. The Canada FarmSafe Plan highlights four areas of health and safety business risks for you as farm owner/operator: prosecution; economic loss; commodity loss; and, human resource loss.

Prosecution Should a work-related injury or illness occur on your farm, you

potentially could face legal action at three levels: • Regulatory In most provinces, occupational health and safety laws are based on a reverse onus principle that assumes you are responsible for the occurrence of an incident, unless you can prove you took preventive measures and actions, yet circumstances beyond your control resulted in the incident occurring. • Civil An injured party can take legal civil action against you if they believe you were negligent in providing a safe work environment or failed to fulfil your responsibilities in exercising due diligence in taking reasonable care to protect the people on your farm (if you are not covered by workers’ compensation). • Criminal In 2004, an amendment was made to the Criminal Code of Canada setting new legal duties for workplace health and safety and imposing penalties for violations that result in injuries or death. These new rules can attribute criminal liability to organizations, including corporations, their representatives and those who direct the work of others.

Economic Loss The Canadian Agricultural Injury Reporting program (CAIR) conducted an analysis of the average costs of incidents to a farm’s economy. They determined the following average costs in the mid-2000s: • Workplace fatality $275,000 • Permanent disability $143,000

photo contest

GIVE US YOUR BEST SHOT

“C’mon and give me a kiss!” Proud grandmother Debbie Ainsworth of Grandview, Man., sent in this great photo of granddaughter Dalayna cosying up to one of the neighour’s very friendly goats. Thank you for sending this in, Debbie. There’s a cheque for $25 on its way to you. If you’d like to submit a photo, please email it to lyndsey@fbcpublishing.com. Please send only one or two photos at a time and include your name and address, the names of anyone in the photo, where the photo was taken and a bit about what was going on that day. A little write-up about your farm is welcome, too. Please ensure that images are of high resolution (1 MB is preferred), and if the image includes a person, we need to be able to see their face clearly. — Lyndsey

• Hospitalization $ 10,000 • Non-hospitalized injury $700

Commodity Loss The production of agricultural commodities requires continual monitoring and management. For instance, should you or one of your workers suddenly be unavailable to work, determine the impact on your farm’s production cycle.

Human Resource Loss There is a limited pool of available farm workers in most regions. The sudden loss of a worker, as a result of a workplace injury or illness, has a significant impact on the worker, the operation of the farm and also on the social well-being of the people living and working on the farm. In Canada, occupational health and safety legislation places the primary responsibility for health and safety on employers and employees in the workplace. If they are unable or unwilling to manage their own health and safety, then a regulatory agency will compel them to do so. Remember that even if there is no provincial legislation requiring you to follow specific health and safety standards on your farm, you may, in addition to the moral obligation you hold, face civil or criminal charges if it is believed that you will fully ignored the safety and/or health of your workers or persons on your farm. † Check out the Canada FarmSafe Plan at www.planfarmsafety.ca. PLAN.FARM. SAFETY

Watch overhead lines when moving equipment

n recent years, the height of new farm equipment has grown while many power lines have remained the same. Because of this, farmers and ranchers need to be especially aware of clearances under power lines that run through, under and alongside their yards and fields. FortisAlberta recently launched a power line safety video targeted to Alberta farmers and ranchers. The video shows a variety of common agricultural scenarios involving the potential for power line contacts, and what considerations and actions must be taken to ensure farmers’ and ranchers’ safety. This includes contacting Alberta Infrastructure and Transportation to get a permit for transporting loads more than 4.15 metres in

height down any public road or highway. “Many of our farm customers have been working the same piece of land for generations safely passing under power lines,” says Doug Skippen, FortisAlberta’s manager of health and safety. “As farmers upgrade their equipment they sometimes forget to take into account the size of the new equipment and suddenly power lines that they have passed under with no problems for years now becomes a problem and contacts occur.” In 2010, there were 250 public contacts with FortisAlberta’s power lines, 39 of which involved agricultural equipment such as air seeders, air sprayers and grain augers. The video is available for viewing at www.fortisalberta. com. †

CWB Monopoly

Conservatives introduce Bill C-18 to end wheat board monopoly

estern Canadian wheat and barley farmers will have the freedom to market their grain as they choose once The Marketing Freedom for Grain Farmers Act (Bill C-18) passes. “The Marketing Freedom for Grain Farmers Act will give western Canadian grain farmers the right to choose how they sell their wheat and barley,” says Agriculture Minister Gerry Ritz. “Our government is delivering on our long-standing promise to give western Canadian grain farmers marketing freedom, just as they have when selling their canola or pulses.” The legislation tabled on October 18, 2011, will remove the monopoly of the Canadian

Wheat Board and give marketing choice to all farmers. Farmers will have the choice of whether to sell on an open market or through a voluntary CWB. The legislation will allow an interim Canadian Wheat Board to act as a voluntary marketing entity, supported by the federal government while it transitions to full private ownership. The legislation will also immediately allow farmers and companies to forward contract for the delivery of grain after August 1, 2012. As part of the ongoing commitment to farmers and the importance of the Port of Churchill as a shipping option, the Harper government will provide an economic incentive of up to $5 million. † AGCanada.com

Processing

Regina to host pulse and durum plant

n expansion-minded international pulsepacking and export firm has pledged up to $50 million for a new Saskatchewan plant to process pulse crops for flours and food ingredients and durum into semolina for pasta. Alliance Grain Traders (AGT) recently announced construction work on the plant is to begin in 2012 in the Global Transportation Hub (GTH), a new Regina industrial development devoted to transportation and logistics facilities needing central road, rail and intermodal access. The AGT complex is planned as a milling facility to process durum for the production of its Arbella pasta brand in Canada, and to process

pulse crops into pulse flours, starches, proteins and fibres. AGT expects its distribution centre, to be built at the same site, will capitalize on the availability of ocean containers, trucks and intermodal container units at the Global Transportation Hub for domestic and export shipments. Canadian Pacific Railway has previously announced it will build a new intermodal facility at the GTH. Upon the completion of the new plant, expected in mid-2012, the AGT facility is expected to generate 60 full-time jobs. The open-marketing system will encourage further processing of board crops on the Prairies. † AGCanada.com

/ grainews.ca

NOVEMBER 7, 2011

Cover Stories Tank cleanout

For more information on sprayer cleanout visit:

1 6 6 6 Dubl in Ave n ue , W in n ipe g, MB R3 H 0 H1 www. g ra in e ws . c a PUBLISHER

Bob Willcox Associate Publisher/ Editorial director

University of Missouri Extension Services. This link also has clean up recommendations for specific herbicide types. http://extension.missouri. edu/p/G4852

John Morriss

Editor

Lyndsey Smith Cattleman’s Corner Editor

Lee Hart Farmlife Editor

MAFRI Guide to Crop Protection – Page 14 http://www.gov.mb.ca/ agriculture/crops/ cropproduction/pdf/ gcp2011/intro.pdf

Sue Armstrong Machinery EDITOR

Scott Garvey Pr oduction Director

Shawna Gibson Designer

Steven Cote

» CONTINUED FROM PAGE 1

MARKETING/CI RCULATION Director

six steps to proper tank cleanout

Lynda Tityk

Circulation ma nager

Heather Anderson

Proper tank cleanout is essential to avoid accidental Group 2 injury. spray liquid. There is also a main boom screen and various screens throughout the plumbing system of the sprayer all of these screens should be opened and observed and cleaned if there is any residue on them. Many of these screens are frequently overlooked. A wash bucket and scrubbing brush with clean water is handy for cleaning and rinsing screens. Check the spray boom end caps as well.

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Use the appropriate cleaning solution Particularly after a Group 2 herbicide has been used, an ammonia cleaner is usually recommended. Add water to the tank and household ammonia at the label recommendation rate — usually three litres ammonia to 100 litres of water. “There is some confusion because most people believe that the ammonia neutralizes the residue, but it does not do that,” says Wolf. “The ammonia simply changes the pH of the water — it raises the pH and increases the solubility of the sulfonylurea (SU) herbicide in water. Material that has not been previously able to dissolve can now dissolve better.” When decontaminating after use of an oily (EC) formulation, the use of a wetting agent such as AgSurf will assist in removing oily residue that may trap SU

Printed in Canada by Transcontinental LGM-Coronet Winnipeg, Man.

Group 2 injury as shown by multiple branches at base of plant versus a normal plant (left). Growth A good example of Group 2 injury of canola — multiple is also stunted. branching at the base of the plant. herbicide on tank and hose material. Commercial tank cleaning products that contain ingredients for removing persistent deposits are available.

Wash down the tank walls Wash down the walls of the sprayer tank with a pressurized spray containing the ammonia solution and watch for any caking on the sprayer tank, and remove it using a direct, pressurized spray. Make sure that all

parts of the wall have been in contact with clean water. Use a wash-down nozzle to provide complete and vigorous coverage of the interior tank surface. Afterwards spray the ammonia solution out also and dispose of it in a safe place. The most effective use of any given volume of rinse water is to divide it equally across several repeat washes. Assuming a 10gallon sump remainder, a single 600-gallon wash is as effective as two washes with 70 gallons each, and three with 30 gallons

DuPont reformulates its Group 2 herbicides

n 2006 DuPont re-formulated its line of Group 2 sulfonylurea (SU) herbicides with a proprietary soluble granule (SG) technology branded as Solumax soluble granules, which has, according to the company, improved plant uptake of the product as well as made life a little easier for farmers. Original Dupont SU herbicides were dry flowable (DF) formulations using a clay-based carrier that, when mixed with water, didn’t entirely dissolve, instead forming a suspension in the sprayer tank. As a result, constant agitation was required to keep the

product in suspension. Residue in the sprayer tank, nozzles, screens or other plumbing parts required more aggressive tank clean out procedures before moving into subsequent crops. “Solumax as a carrier dissolves completely into a full solution, which makes clean out of the sprayer much easier. Solumax works similar to stirring a spoonful of sugar in a glass of water,” says Jon Gough, product manager for cereals at DuPont Canada. “When you stir it up and pick up that glass and look at it, you’ll see it’s completely transparent because it has gone into a complete solution.”

The new Solumax formulation is found in DuPont Barricade as well as Refine, Triton, Express®, Harmony and PrecisionPac brand herbicides. DuPont is the only company currently offering this technology in SU herbicides, and Gough says it provides additional benefits to farmers. “Weed control is more consistent because it gets into the plant quicker, which improves rain-fastness,” says Gough. “And equally important to growers is easier, more efficient sprayer tank clean out, so it really saves them time in the field.”

each. More wash cycles allow for less water in total.

Don’t forget the pumps and plumbing Empty the sump as completely as possible by spraying it out. Any spray liquid or herbicide concentrate remaining in the sump area will be recirculated in the sprayer. The only way to remove any remaining herbicide is through dilution by repeatedly adding water, and each time draining the sump as much as possible. Plumbing can also be a significant reservoir of herbicide residue. Pump clean water through the boom while ensuring that all return and agitation lines also receive clean water and all residue is flushed out. This may require opening and closing various valves several times and repeating the process with new batches of clean water.

Be thorough “It’s not as complicated as people may think,” says Wolf, “but you have to have your eyes open, you have to clean the right things and you have to make sure you observe if there is any residue left. If you are thorough you won’t have a problem.” † Angela Lovell writes from Manitou, Man.

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Your next issue! You can expect your next issue in your mailbox about December 5, 2011

The editors and journalists who write, contribute and provide opinions to Grainews and Farm Business Communications attempt to provide accurate and useful opinions, information and analysis. However, the editors, journalists and Grainews and Farm Business Communications, cannot and do not guarantee the accuracy of the information contained in this publication and the editors as well as Grainews and Farm Business Communications assume no responsibility for any actions or decisions taken by any reader for this publication based on any and all information provided.

NOVEMBER 7, 2011

grainews.ca /

Features CROP NUTRITION

Fine tune fertilizer rates by field, not by crop Yes, it’s more work, however developing field-by-field fertility rates versus a blanket canola or wheat blend can add up to more profit BY JASON CASSELMAN

he goal of a crop fertility plan is to determine the fertilizer rate needed to hit the yield target while accounting for nutrients already present in the soil. But farmers may wonder why it is important to spend time calculating different fertilizer product rates. Why not just use the same fertilizer blend across the whole farm or have a wheat blend and a canola blend? Putting a little extra time and effort into a fertility plan can improve crop growth, reduce environmental impacts and, perhaps most importantly, produce a greater financial return. The basic steps to building a fertility plan are: decide on crop rotation; set achievable yield targets; list nutrient uptake and removal rates; measure available nutrients in the soil; and, finally, calculate the amount of fertilizer necessary to make up the difference. Farmers should also understand the purpose of the fertilizer components when determining application rates and proportions. Once you’ve settled on a rotation plan, determine the yield potential of the field by looking at historical data and averaging yields over the last three or four times that crop was grown. A good rule of thumb for targeting higher yields is adding 20 per cent to the average.

the changes in those areas. Record sample points and benchmark for baseline information. You can use GPS co-ordinates to get back to the same place or measure sample points from a reference point near the field, such as a fence post or survey marker. Take samples at the same depth each time. Most soil scientists recommend two samples, one from between zero and six inches and the other between six and 24 inches. Keep the samples pure and be very careful to not contaminate them with other soil or dust. Use a clean plastic pail and rubber gloves when mixing soil to break up lumps. Label sample bags and fill out field information sheets accurately with all of

the required information. And be consistent when labelling samples. For example, don’t change the names of fields each time you sample them. It is imperative to do the best job possible when taking soil samples in the field to get the best information from the lab on the analysis. Pick a soil sample lab that reports information in an easyto-understand format and stick with that lab in order to get more consistent reports.

SOIL AS A BANK ACCOUNT One way to think about soil is to view each field like a bank account

» CONTINUED ON PAGE 6

Loading fertilizer near Rycroft, Alta.

Now, yields come in

XL!

SHORT VERSUS LONG-TERM FERTILIZER PLANS Different farmers have different approaches on fertilizer recommendations, usually depending on their specific circumstances. Whether the land is owned or rented makes a difference, as does the term of the lease. Short-term lease land may just get enough nutrients for the crop — the sufficiency approach. Land that is owned is treated more with a building program and is a long-term investment. I use the information from The Canadian Fertilizer Institute (www.cfi.ca) uptake and removal chart, which shows the amount of nutrients that a crop requires to grow and how much of the nutrients are removed when it’s harvested. There are a range of values on the uptake and removal chart — the growing season and geography of your farm determines where you fit on the scale.

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WORK OFF ACCURATE SOIL TESTS A good fertilizer program requires reliable and representative soil-sample results, so take time to evaluate every part of your soil sampling technique. Samples sent to the lab must be collected in a way that maintains the integrity and validity of the sample. If you’re hiring out the job, hire trained operators who collect samples consistently with the proper equipment. A big part of a soil sample analysis report is an analysis of the changes in nutrient levels compared to previous soil sample information, so always take samples from the same areas to compare

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/ grainews.ca

NOVEMBER 7, 2011

Features

For owned land, fertilizing for the long term may mean going with slightly higher rates to rebuild soil and soil reserves.

» CONTINUED FROM PAGE 5

fine tune fertilizer rates by field, not by crop — only one containing nutrients instead of money. This bank account of nutrients has deposits (the main one being application of fertilizer prior to crop establishment) and withdrawals (the main one being the harvesting of the crop). There are other important withdrawals and deposits taking place throughout the year in the field fertility bank account — these are akin to service charges that draw down your balance or interest that adds to the level of available

nutrients. Withdrawals for nitrogen include leaching, denitrification, volatilization, and erosion. The interest on the fertility bank account can be additional nitrogen from legume residue, other plant and animal residues and mineralization of soil organic matter. It’s important to confirm the fertility bank account balance in the field and understand what the regular deposits and withdrawals are. Confirm your soil fertility bank account balance compared to where you think it should be. Another way to look at nitrogen is as the fuel in the tank to get you where you want to go. If you only got partway to where you wanted to go, chances are there’s some

Increased rates of nitrogen need to balanced off with increased rates of other nutrients in balance. This could include micronutrient rates, too.

unused fuel left. If you got a little bit farther than what the plan was, you probably drove on the reserve part of the tank for a little while or got better mileage than expected. Look at the other nutrients as the oil in the engine and the air in the tires. Maintain proper levels from start to finish and everything will run pretty smooth. If those levels start to drop too low, you can have a major problem and when they run right out, it is usually a bigger issue to fix them.

Increase nutrients by ideal ratios When planning to increase rates of nitrogen, also look at

increasing rates of other nutrients proportionately. Expect to see greater yield response from an increase across the board than just bumping up nitrogen. When increasing primary nutrient rates, you also have to look at the micronutrients required for high-end yields. Crops have different response rates to certain micronutrients and it is important to make sure that they are not lacking. The chances of success are much greater when you have the end goal in mind. Farmers will see agronomic benefits of crop fertility planning by following the straightforward process of determining yield targets,

reviewing uptake and removal rates, soil sampling and calculating application requirements. Practically speaking, the intensity of a crop fertility plan is limited by application equipment and in-season logistics. Look for ways in the current system to improve the fertility plan. Check application records for how much fertilizer was applied on each field, account for the crop removal with accurate yield information, and check that the soil sample report shows a reasonable balance. † Jason Casselman is a partner and agronomist with Dunvegan Ag Solutions Inc. (www.howtogotoagsi.com) at Rycroft, Alta.

YOUR CROP, YOUR CHOICE The Government of Canada is delivering on its promise to give marketing freedom to Western Canadian wheat and barley farmers.* An open grain market means more investment, more innovation, more value-added jobs as well as a stronger economy.

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www.agr.gc.ca/freedom or call 1 800 O-Canada (1-800-622-6232) TTY: 1-800-926-9105

*Subject to parliamentary approval.

NOVEMBER 7, 2011

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/ grainews.ca

NOVEMBER 7, 2011

Features FARMER PANEL

Fall plans deal with moisture overload Next year’s growing season may be perfect but just in case it isn’t Prairie farmers are managing fertility, rotations and land for all situations BY LEE HART

hether you farm in the Alberta Peace River region, southeast Saskatchewan or Manitoba’s Red River Valley the challenge heading into 2012 is to manage the soil and crop rotations in the wake of extreme wet and/or dry conditions in 2011. Most farmers contacted for the November Farmer Panel are making some changes in their agronomic and crop production practices for 2012. Those changes may mean more soil testing, more tillage to repair rutted fields or, in some cases, to dry the soil, changes in crop rotation or beef-

ing up equipment used to improve field drainage.

NICK SEKULIC RYCROFT, ALTA. Nick Sekulic says after four years of extreme weather conditions, he plans to soil test most of his Peace River region farm to get a better idea of where soil fertility is at for this coming year. Sekulic, who along with his family, crops about 7,000 acres of grains, oilseeds and pulses, says after three extremely dry years (’08, ’09 and ’10), fortunes reversed themselves in 2011 giving them heavy snow fall and good spring moisture, followed with about 20

inches of rain over a short period early in the growing season. “The rain was welcome but it was, in many respects, too much,” he says. “We had cool, wet conditions which slowed crop growth. The saving grace was that we didn’t have a killing frost until October, so we actually saw an excellent crop due in part to fertility carryover in the soil from the past three seasons.” Sekulic follows a consistent rotation that includes winter wheat, spring wheat, oats, peas and canola. With the expected changes in wheat and barley marketing next year, he may look at including malt barley in rotation again. He has been direct seeding for about 20 years. He plans to soil test all annual

cropped fields this fall, except the winter wheat which was seeded in early fall, and will skip those fields ear marked for peas in 2012. “On our farm we had historical record yields on cereals this year but we have to remember for the past three years it has been dry which created high nutrient carryover,” he says. “Now this year with so much rain, and some very good yields, we need to determine where fertility levels are.” He says the wheat handled the excessive moisture very well, although it was too much of a good thing for the peas, causing below average yields. Some farmers in the area are applying anhydrous ammonia this

fall which will also help to work down higher crop residue and level out field ruts created during field spraying operations, however, Sekulic says he will stay with a one-pass, direct seeding system next spring. And, as a long time mixed farming operation, he also plans to rebuild a commercial cow-calf operation. Most of the herd was liquidated last fall due to a shortage of grass and winter feed. He did keep 60 heifers from that herd and will begin rebuilding numbers, “and of course now after all that rain there is all kinds of feed in the country,” he says.

RYAN KUBINEC WESTLOCK, ALTA. Ryan Kubinec, who farms about 4,000 acres with his family near Westlock, northwest of Edmonton, says after a couple years of not soil testing, they plan to soil test the whole farm this year. “We have applied some variable rate technology to part of the farm so those fields have been intensively tested, but we haven’t tested the rest of the farm for a couple years,” he says. “We’ve just gone with what we considered a good fertilizer program — a good healthy dose — based on historical rates.” After this year’s growing season that was both very dry and then very wet, however, he wants to get a handle on soil fertility levels. The crop was seeded in a timely manner in May, but then it turned dry for a few weeks, with lots of wind. “But then with the first rainfall after that later in June we got about five inches of rain at once,” he says. “And that was followed by another three inches. So we went from none to too much at once.” Kubinec follows a rotation that includes hard red spring and CPS wheat, as well as canola and peas. The earliest crops seeded grew well and were ready for combining in late August, but later seeded crops had uneven emergence, with uneven maturity that delayed harvest. Yields on wheat and canola were generally quite good, and although the pea crop looked excellent, it was hit by disease. He applied one fungicide treatment, but in hindsight a second should have been applied. What should have been an excellent pea crop turned out to have average yields. Kubinec, who crops about 4,000 acres with his father Tim and younger brother Timothy, says he plans to soil test the whole farm this fall. Usually they have pre-bought all fertilizer by the end of harvest, but with fertilizer prices being up, and the fact they had no bin space for storage, they hope to buy fertilizer later this fall and early winter once soil testing is completed. While he generally follows a direct seeding system, he will apply “maintenance tillage” to low spots that flooded out earlier in the summer, and also work over ruts created during field spraying operations.

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After he got only about 500 acres of his 13,000 acre farm seeded last

NOVEMBER 7, 2011

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Features spring, due to excessive moisture in southeast Saskatchewan, Marcel van Staveren says he has or will make several changes to his cropping program for 2012. Water was trickling through culverts all last winter and conditions only got wetter as spring arrived, so with no crop seeded, van Staveren said in an earlier interview this year, his focus was all about taking steps to produce a crop in 2012. “Field conditions have improved quite a bit since last spring, although we have had some rain this fall,” he says. “We’ve had about four inches of rain since September so we are still good, but we are probably one good rainfall away from having too much. I am hoping the rain holds off and we get just enough snow to provide good cover for the winter wheat. That’s what we need.” To deal with excessive soil moisture, van Staveren let about 6,500 acres of volunteer canola grow. It was an Invigor variety and he did aerial apply herbicide to control weeds such as wild buckwheat. After doubling swaths, he combined the crop which only yielded about four bushels per acre, but that was enough to recover input costs with a few dollars to spare, “and it did help drawn down the water table,” he says. He also re-introduced some tillage to the long-time direct seeding, zero till operation. He treated about 20 per cent of all fields with a tandem disc in mid summer, mostly to repair field ruts and treat some of the heavily weeded low spots. He also covered about 40 per cent of the farm with a 41-foot Salford vertical tillage tool. The wavy coulter action of the tool helps facture the soil profile down which helps the soil dry out. While usually all fertilizer goes on at seeding, he also banded anhydrous ammonia this fall to about 80 per cent of his cropped acres. He did that to make use of a fertilizer credit from last spring, and again the application helps dry out the soil. For the first time in about 14 years he seeded winter wheat in late summer. “We haven’t had winter wheat on this farm since 1997, but we seeded about 1,400 acres in late August and it looks fantastic,” he says. “Now we need just about six inches of snow to protect it over winter.” Next spring he plans to seed about 600 acres of soybeans. “A few people in the area have been growing them the last few years, and they seem to do quite well, and they appear to handle the moisture very well,” he says. He worked those acres to blacken the ground, because it appears soybeans do better with tillage, and again it helps dry out the fields. “We have had mostly a durum and canola rotation so we’ll try the winter wheat and soybeans,” he says. “If there is a good side to having a year with no crop it’s that we got a lot of clean up done this summer,” he says. “I kept the guys working and we took out some old fences, rolled up barbed wire and picked rocks. It is a shame to miss out on a year with high commodity prices, but the clean up is good and helps make fields more efficient.”

KELLY KABERNICK SANFORD, MAN. Kelly Kabernick is planning a status quo program for 2012 on his 3,000 acre Sanford, Manitoba farm, near Winnipeg. He says it was a year of extremes

ranging from extremely wet conditions at seeding to “record breaking dry” by harvest time. “It started out very wet, but we got everything seeded, although some areas drowned out,” says Kabernick. “And then it turned dry, everything matured and we had a very easy harvest.” Kabernick, as usual, made one tillage pass after harvest to work down crop residue. He doesn’t always soil test, but he pays attention crop yield and fertilize accordingly to maintain yields. He is working to clean out drainage ditches on the farm this fall, but that is more routine maintenance as well. Although it appears to be dry conditions this fall, he isn’t concerned about adequate moisture for seeding. “I haven’t really seen a dry year yet,” he says. “Even now with this heavy ground if you break through that first foot of soil which in some places is like concrete, there is still plenty of subsurface moisture below.”

they used tillage in hopes of drying out the saturated soil. This fall, the John Deere 9520T is pulling a small scraper that digs the grade and then the Case Quadtrac is pulling a larger scraper which moves more dirt “and handles the grunt work.” The equipment is guided by John Deere Surface Water Pro software system. Cadieux grows about 800 acres of corn along with barley, wheat, canola and soybeans. After harvest they usually make two tillage passes to work in crop residue, control weeds and help dry out the soil. Another new approach, this fall, was to apply phosphate to most of the farm during the second deep tillage operation. “In the last few years we have been cutting back on fertilizer, but we were concerned we might be starting to mine the soil,” he says. “So now we are going the other way and applying more fertilizer. We wanted

KERRY CADIEUX LETELIER, MAN. Red River valley farmer Kerry Cadieux is doing what he can this fall to improve drainage on the family’s 3,800 acre farm which will hopefully gain them a few days of earlier seeding in 2012. With extremely wet conditions in 2011, Cadieux who farms with his father, Bob, bought a second track tractor which pulled a harrow ahead of the air seeding system in the spring. And, now this fall, that Case IH Quadtrac machine is pulling a larger scraper to contour fields to improve drainage. “It was so wet last spring we bought it almost at the last moment to work ahead of the seeding equipment,” says Cadieux. “It was so wet we couldn’t go anywhere with the JD 9520T, but the Case Quadtrac was able to travel.” They normally don’t harrow ahead of the air seeding unless fields are a bit rough, but in 2011

to get more phosphate on so we outfitted the tillage equipment with a fertilizer manifold kit and applied the phosphate about four to five inches deep during that second pass.” Also to get more nitrogen to the corn, other than applying a liquid application in-crop, Cadieux applied anhydrous ammonia to corn acres this fall. With the rest of the crops, all fertility, including higher rates of anhydrous ammonia will be applied in a one pass seeding system in spring. “Other than the Quadtrac we haven’t added any other equipment, and we are working to increase our fertility program this fall, as well,” he says. “We are going to keep the same rotation next year, but with changes in marketing we plan to grow more malt barley than we have before.” † Lee Hart is a field editor for Grainews at Calgary. Contact him at 403-592-1964 or by email at lee@fbcpublishing.com

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/ grainews.ca

NOVEMBER 7, 2011

Features Crop production

Crop Advisor’s Casebook

ohn, who farms 7,000 acres of wheat and lentils near Consul, Sask., didn’t like the look of his spring wheat crop. He called me at the beginning of July after he noticed orange stripes and tancoloured spots had formed on some of the plants’ leaves. “I’ve heard of major disease pressure south of the border, in Montana,” he told me. “There was a huge rust outbreak in winter wheat. I’m wondering if this is what’s in my spring wheat,” he said. Farmers located in the southwest corner of Saskatchewan haven’t really had to worry about disease pressure of this kind on their cereal crops. Recently, this has changed. If my suspicion was correct, John’s crop could be under threat. John was right to be concerned. As soon as I walked into the field I found orange-yellow pustules on the plants, extending the entire length of the leaves, forming stripes. The oldest leaves on the plants were most affected, but the infection was moving up toward the penultimate leaves

— the crop had not yet reached the flag leaf stage. I also noticed some tan spots forming on the leaves. From what I could tell, John had two problems. First, the small, tan-coloured spots were caused by the fungus Pyrenophora tritici-repentis. The spots begin as tiny brown flecks, which grow into lensshaped areas up to 12 millimetres in length. A spot is sometimes surrounded by a yellow halo, and often develops a dark brown centre. Plants heavily infected with this leaf spotting disease, called tan spot, can wither and die. The other disease affecting John’s spring wheat was not difficult to diagnose either. The orange-yellow stripes were a telltale sign that his crop had been infected by stripe rust, caused by the fungus Puccinia striiformis. Also known as yellow rust, this disease is typically problematic for producers in the southern United States, but not a cause for concern in Saskatchewan. Recently, however, stripe rust has been showing

OLD DISEASE, NEW PROBLEMS

Kayla Notley.

Orange-yellow signs of stripe rust showed up very early in this crop.

up in farmers’ fields more often and earlier in the growing season in Alberta, British Columbia, and now Saskatchewan. Usually, air currents carry spores from infected regions in the United States to fields in Canada, and symptoms appear one week after infection, usually in late summer. But something different was happening here. “What’s rust doing in my field so early in the summer? In fact, what’s it doing here at all?” John asked me. He also wanted to

know what he could do about it and what was going to happen to this crop. These were good questions, and questions other producers in western Saskatchewan would want the answers to this season. What was stripe rust doing in John’s spring wheat crop in an area not typically affected by the disease and so early in the growing season? What can he do about it, and is it too late for his crop to be saved? Send your diagnosis to Grainews, Box

9800, Winnipeg, MB, R3C 3K7; email lyndsey@fbcpublishing. com or fax 204-944-5416 c/o Crop Advisor’s Casebook. Best suggestions will be pooled and one winner will be drawn for a chance to win a Grainews cap and a one-year subscription to the magazine. The best answer, along with the reasoning which solved the mystery, will appear in the next Crop Advisor’s Solution File. † Kayla Notley is a sales agronomist at Richardson Pioneer Ltd. at Dunmore, Alta.

Crop Advisor’s Solution ROOT ROT OFTEN MISDIAGNOSED AS AN INSECT PROBLEM

ast July, Bob, a farmer from south of Yorkton, Sask., called me about the patches of browning and dead spring wheat plants he noticed appearing in one of his fields. Bob is strictly a grain producer who farms 5,500 acres of spring wheat and canola. As one of my agronomy clients, Bob and I scout his fields together every seven to 10 days. Up until the beginning of July, Bob’s wheat crop had been

progressing well. But by the second week of that month he noticed randomly situated, irregular-shaped patches of dying wheat developing on the hilltops in one of his fields of rolling, hummocky-ridged land. “I think it’s damage from a chemical,” he told me, because he’d noticed the symptoms seven days after spraying. Bob and I thoroughly scouted the field when I arrived at his farm. In the affected areas, I

noticed the wheat had grown to the three- to four-leaf stage before withering and dying. No other plants were growing in the patches. When we discussed the details of this crop, I noted that Bob had done many things right. He had used high-quality, certified seed, his seeding rate and depth were correct, and his fertilizer and herbicide application rates and procedures were also accurate. After consulting

Bob’s records, I determined that herbicide carryover was also not an issue. Germination was not an issue because the number of dead plants in the patches indicated the germination rate had been excellent, with a plant stand population of 40 or more plants per square foot. When we checked for insects, such as cutworms and wireworms, none could be found at the soil’s surface or slightly below ground.

Farmers love this. Prairie wheat growers are turning to midge tolerant wheat for midge control and high yields. And everyone wants this to continue. That’s the point of the Stewardship Agreement. The Agreement limits the use of farm-saved seed to one generation past Certified seed. It’s a simple step that keeps the interspersed refuge system at the desired level, preventing a build-up of resistant midge. Protect your yields and grade, and preserve this important tool for years to come. What’s not to love about that? Contact your retailer or visit www.midgetolerantwheat.ca to learn more about these new varieties and how the interspersed refuge system works.

I asked Bob to tell me about any differences, no matter how insignificant they may seem to him, in the treatment of this field to that of his other fields. “No differences,” he said. “But I guess this is the only field where we didn’t apply a seed treatment.” There it was — the answer. I pulled up some plants from the affected areas, and as soon as I saw the dried up, dead coleoptile and root material I knew we were dealing with root rot, a general term for a group of plant diseases caused by fungal or oomycete infection. Laboratory results from plant samples confirmed that root rot was the cause of the patches of dying wheat in Bob’s field, although lab analysis could not specify, with certainty, the type of root rot involved. Because the wheat seed planted in Bob’s other fields had been treated with a fungicide, only the field with untreated seed had developed the disease. Generally, the use of high-quality, certified seed, seed treatments and shallow seeding depths, as well as ensuring adequate phosphate fertility will increase your success rate in the prevention of root rot. Sadly, nothing could be done to solve or reverse the areas affected by root rot in Bob’s field this year. The silver lining in this case is Bob now knows that a seed treatment is an important part of establishing and growing a healthy, productive crop, and next year, we can prevent this problem from reoccurring. † Chad Zavislak is a sales agronomist at Richardson Pioneer Ltd. at Yorkton, Sask.

-36 -46 -43 -36 -42 -46 42 44-39 46 -5-4242 66 48 55 65 44 43 3831 43 7 -39 44 66 55 -5 47 -43 6 -36

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41 41

41 47

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5917 51 41 50 -38 46 -750 48 -1646 45 -35 51 845 -3 -5830 -17 -37-326 -22 26 20 48 -17 -26 1 -30 42 -5944 -2146 -3 42 -5348 65 48 43 36 -38454 -27 44 A 46 42 7 Q42AND PRECISION 367 11 4 -67 34 -2643 40 -67 46 -45 14 -50-8 26 -14 33 26 35 46 20 10 -2234-8 -2610 40 14 33 11 -13 -13

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Features

NOVEMBER 7, 2011

grainews.ca /

Turn yield maps into profit maps

Mapping profitability based on a yield map can ultimately lead to more concise agronomic decisions by field or parts of a field

-24-27 -12-58 -15-37 -20-22 -14-38 -49 -7 -69-16 3 -3521 8 17 -63 -27 -58 -38 6 -7 -63 -72 -35 8 17 -16 -37 -22 75 -26 1 -26 1 3 -28 -9 -38 -10-27 -7 -30 -4 -59 -28-21 -39 -3 14 -53 Avg-53 Profit / acre -52 -59 -3 -21 -59 -52 -38 -28 -30 5 -27

-67 -67 -119 - -84 5 -53-14 -28 -26 -6a -22 : 6I-26 -59 29-12 -32 2-59 -26 -3-32 -50 have GPS-equipped -26 -22 25 -50 -14-67 -45 -13 -45 -13 -67 -83 yield monitor on -13 the - -52 -13 combine. How can I -26 -13 39 -6 -22 -49 -10 -17 -1 -84 -16 -33 -71 -45 -32 -12 -34 -37 -16 -1 -84 -16 -33 ABERHART -71 -20 -45 -32 -12 19 -34 -37 -16 FARMS

- BENNETT HALF make the most of the -51 - -34 data collected? -32 -36 -24 -46 -15 -22 -49 -44 -20 -27-14 -11 -28 47-25 -12 -14 -69 -493 21 21 -32 -24 -20 -14 3 - -21 -28 -12 -69 -33 40 A: Yield mapping is an -15 easy way to gauge how variable your fields 75 -8 3 -30 -9 -19-10 -16 -7 2 -4 0 -28 -29-39 75 14 -39 Avg -13 actually -41 48-36 ProfitAvg / acre -20 are. This ground14 - -9 -28 41 -7 -4 3 is a-9great-10 -13 -41 Profit / acre truthing opportunity for all of the 8 -119 - -84 -119 - -84 14 29 mappers -15-53 -21 6 -8The -17 2 -22out -8 - 4 5 14 yield -28 -53 -40 30 5 14 29-3 there. 2 -3-6 only -6 -28 6 -44 -40 43 problem is remembering how much 3 7 -12 -30 21 14 17 14 11 -30 16 -110 -92 5 - 17 -83 - -52 -83 - -52 were the-22good -40 -49 11 39 -12 -25 8 46 better -39 -6acres -34-17versus -26 -13 -10 -21 -6 -22 73 -56 the -21poor46acres39and -13 the amount of -17 -49 -26 -10 - -34 -51 - -34 - 34 -5150 good acres in a particular field. 11 34 57 19 27 -3 1830 34 -11 -116 -98 10 17 -64 -27 -1243 36 47 19 -36 -25-46 -19-14 -34-22 -11 -44 -39 47 -36it’s -46 81 -79 -39 After 43 the harvest, time -14 to -22 -27 -11 -44 -33 - -21 -33 - -21 35 51 download the yield cards to your 22 48 24 -8and -2 -30 -73and -29 -48 -24 23 computer -19 -36 -16 start5uploading -29 -48 -104 -63 -30 23 -98 48 -8 2 -100 52 -192 62 -1608 - -9 23 23 36 75 41 43 43 -32 -20 - -9 51 - 75 -2048 cleaning your yield data. Anyone 8 -3 to -1 -38 -64 11 18 tried -34 8 -22 -17 14 30 -8 -21 -15 -8 -21 their -17 download 4 -11 -6-4 who 30 has-4 -22 14 -15 (Grids are-81 -acre) -8 - 4 -11 45 yield data knows that there are -42 -61 46 54 56 41 44 -9 0 64 14 -119 -38 -119 inaccuracies with un-cleaned raw -40 5 - 17 5 - 17 21 12 11 -12 11 -25 -12 -12 218 -39 -25 -34 -39 -12 35 -34 -40 data. The good8 news is that some -43can-36 18 - 34 farm management software fix -46 -42 18 - 34 19 -19 hire -34 -64 -25 36 -12 -16 8 -19 -34 -64 -25 these inaccuracies or you can 16 -5 36 -4 -12 38 -16 -47 44 66 55 43 53 -39 8 36 -43 19 35 - 51 a Inc. consultant to clean your data REND Geo-Solutions May not be reproduced or transmitted without-36 consent for 35 - 51 -24It is 24 22 -7 you. -2 up -36 -73 that -24 295 245 to 30 -722estimated -2 5 5 -36 -73 -18 - 75 per cent 52 - 75 45 44 41 41 41 -4 raw data -2 collected -54 52-10 49 -8of the -41-38 -64 -3 -1 off the combine card is inaccurate 11 18 -9 -10 -34 -3 -1 -38 -64-89 11 18 -9 32 -19 -10 -34 or false. Once these inaccuracies are fixed, you can start printing off 40 38 26 47 10 49 41 30 28 statistics 33 of 6the -14 detailed -14 maps and -28 field that will be very realistic compared to what actually happened 41 29 59 that year -3 26 50 20 field. 30 45 51 46 48 -42in the -17 ht 2010, AGRI-TREND Geo-Solutions Inc. May not be reproduced or transmitted without consent Copyright 2010, AGRI-TREND Geo-Solutions Inc. May not be reproduced or transmitted without consent Having a cleaned up yield map of a particular field is only half the battle these 65 42 44 46 43 31 7 42 48 4 11 We need 36 45 to know -74 days. more and look past the pretty pictures. It is fascinating to break down the amount of acres in a particular 11corresponding 43 34 10 40 -8 46 20 2 14 33 35 26 -92their field with yield. This yield audit can produce information vital to populating a profitability map. it this way, 1 21 2 9 22 18 20 -22 17 of -4 -6 -36if -24 3 Think you know your unit cost per acre ($/acre) in your field and you know what you (bushels/acre) -6 -7 -38 -27 -58 8 17 -72 -63 -35 -37 -22 -16 75 yielded on every individual acre because of your yield map. By estimating -26 1 what you will sell your crop for ($/ -3 -59 -21 -53 -5 that -59to the-52 -38 -27 -28 -30 59matching bu.) and map you’ve just turned a yield map into -67 a profitability map. Once63 you look 25 at your -26 -12yield maps -59 -32 -26 -22 -50 -14 -67 -45 -13 in this way you’ll start to under-13 stand how many acres are losing money -4 on a-19 given field. that -84 -16 -1 -33 -71 -20With-37 -34 -45 -32 -12 -16 information you can then place the fields in a priority sequence to start fixing them. Variable rate 3 21 -28or -32 -12 -20 -14 -69 -24 -15 -49 -40 be -25 -52 might technology the answer there could be simpler agronomic factors that can be investigated and 75 -39 -28 14 addressed. not 3 -9 -7 -4 -41 land -10 -13 -36that is-41 -63 Farming profitable doesn’t do anyone any • Alleviate soil compaction with the jackhammer action of the Coil-Tech Coulter good. †

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/ grainews.ca

NOVEMBER 7, 2011

Features Farmer Profile

Farming smarter, not bigger Paul deChamplain doesn’t want to be the biggest farmer around. His goal is to farm his existing land base as efficiently and profitably as possible

hat gives a 28-yearold the courage to play a high-stakes farming game that many say is more of a gamble than going to Las Vegas? What does he do to up the chances of his winning? What can the rest of us learn from him? “Most people say they farm to live, well I live to farm,” says Paul deChamplain. The grain farmer from the Westlock, Alta., area says he’s been farming ever since he could drive a tractor. DeChamplain crops 1,700 acres with the help of his semiretired parents, Emile and Dianne. He employs a private agriculture coach, and says he never stops learning and is always trying something new. “If it wouldn’t have been for my parents, I don’t think I would be farming,” says deChamplain. Not only do they help when needed, but they are also a great source of encouragement. “What can you lose,” they are apt to say to him.

Hire the best Like many successful farmers, deChamplain concentrates on what he does best and hires someone for those things he needs help with. He’s worked with Geoff Doell of Growth Agri-Coaching Inc. of Westlock, Alta., as his agronomist for three years. “I can honestly say that he is probably the most important part of my farm,” he says. An independent consultant, Doell gives suggestions on general farming operations and bases fertilizing and spraying recommendations on soil and plant-tissue sampling. Those working with Doell usually have a higher fertilizer bill, but deChamplain says the extra money he spends on Doell’s services and extra inputs generates higher net returns. Doell does all of the field scouting for deChamplain. “Even in the fall he’s around to look at crops,” deChamplain says. Knowing that someone is on top of what’s going on in the field also gives him peace of mind. “We’ve had to upgrade the equipment to work with him,” deChamplain says of Doell, who recommends variable rate fertilizer and uses exact yields in order to plan and compare. “Probably for my size of farm I have some pretty big equipment,” deChamplain says. “But it makes me quite a bit more efficient. I can get things done really quickly and on time when they should be, which all contributes to the bottom line.” Last year he purchased a new 40-foot air drill with a 400 bushel grain cart. “I can start to variable rate some of my fertilizer,” he says. No-till is the cultivation method of choice, unless weather dictates otherwise.

He says the MacDon D60 draper header he purchased recently gave him that option. (He also replaced his two old John Deere combines with a New Holland CR9070.) Straight cutting saves him a swather and a man. He’s not crazy to do so — many farmers don’t own swathers anymore, usually a result of farming more land. He finds that Invigor canolas stand up well and rarely thresh out in wind. DeChamplain never stops learning, even if he never took any post secondary training. He likes to be on top of the newest trends in agriculture. “I always try going around to different farmers, seeing how they do things,” he says. If he sees something interesting, he tries it out. “Most of my experience comes from actually doing it,” he says. “I have made my share of mistakes, but it’s not a mistake if you learn something.”

Staying nimble Being a smaller farmer has its advantages. Less land gives him more time to try out something different. This year he is experimenting with winter wheat, seeding directly into desiccated hay

photo: daniel stamm

Paul deChamplain likes to get his peas in early and off early. stubble. DeChamplain has tried flax, a crop rarely grown in his area, but it mostly worked well for him. He’s also grown some grass seed and even tried sunflowers, which he describes as “very interesting and a huge learning curve.” This crop year deChamplain grew peas, canola, wheat, barley, oats and a little hay. “I am trying to split the farm into thirds to

IT’S A

By Marianne Stamm

spread out the rotations,” he says. He wants to increase his grass seed acres, putting some land into timothy seed, but needs to build up the soil first. As most of his land is close by, deChamplain uses a grain cart instead of a tandem truck, with a set of scales to keep accurate track of what is coming off the field. Knowing his exact yield gives him a better handle on what each bushel costs. He purchased a new tandem grain trailer to haul off the field with, but bought an old Kenworth cabover truck which he spent the winter fixing up. “I do a big majority of the repairs,” he says. “I like the fixing part.” A continuous flow Vertec dryer is part of the operation, and deChamplain is in the process of switching all the bins over to an aeration system. “It just makes things go a little faster,” he says. While Doell checks the fields, deChamplain does the marketing. While many farmers find marketing a headache, he says it’s something he enjoys. “If you’re growing the grain, then you have to promote your product and sell it,” he says. “The Internet is a wonderful tool.”

He used to subscribe to some marketing sites, but has found enough free information to help him make his marketing decisions. “I am always watching what’s happening around the world,” he says. He uses grain brokers from time to time, but generally sells to the end-user if possible.

Right-sized vs. biggest At this point, deChamplain isn’t concerned about getting really big. “I don‘t want to get much bigger than 2,000 acres,” he says. “I find I can do a better job of fewer acres than I can on more.” He says it is definitely getting harder to pick up land. Bigger farmers have been in business much longer than he and have much deeper pockets. “I am more concerned with sustainability and, actually, diversity as well.” “Farmers are optimistic people,” deChamplain says. “We always keep saying next year will be better.” With his attitude and management planning his chances of winning next year again look pretty good. † Marianne Stamm often writes from Westlock, Alta., but wrote this from Switzerland

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Try new things Two years ago, deChamplain started straight cutting his canola. 16906-2 HybridAd-Grainews.indd 1

NOVEMBER 7, 2011

grainews.ca /

Features New varieties

Eight new soybean varieties for 2012 Farmers will have access to new, low heat unit soybean varieties next year

here are eight new soybean varieties available to western Canadian farmers for 2012. All are in the 2400 to 2500 heat unit range, except for one new variety from Brett Young — Pekko R2Y — and another from DeKalb — 23-10RY — which are 2375 and 2325 CHU, respectively. All new varieties include Roundup Ready herbicide tolerance and one new variety marketed by Secan — Chadburn R2 — also carries Genuity, a trademark term from Monsanto, which refers to package of crop protection traits.

BrettYoung Pekko R2Y Crop Kind: RR Maturity: 2375 CHU Variety Highlights: One of the earliest maturing varieties, with good yield. It is a semi-bushy, short variety with good standability. Sampsa R2Y Crop Kind: RR Maturity: 2475 CHU Variety Highlights: A medium

Seed company contacts: For more information on new seed varieties and availability, contact the following companies:

Monsanto/Dekalb 1-800-667-4944 www.dekalb.ca

Mycogen Seeds 1.877.MYCOGEN (692-6436) www.mycogen.com

Pickseed 1-800-263-7425 www.pickseed.com

Pioneer Hi-Bred 1-800-265-9435 www.pioneer.com

Pride Seeds 1-800-265-5280 www.prideseed.com

BrettYoung 1-800-665-5015 www.brettyoung.ca

SeCan 1-800-665-7333 www.secan.com

maturity variety, with very high yield. It is a semi-bushy, medium short variety, with good standability. High pod placement for very good harvestability.

Monsanto DEKALB 23-10RY Crop Kind: RR

Maturity: 2325 CHU Variety Highlights: New for Fall 2011, this variety is early maturing with excellent standability. It branches well and has excellent tolerance to white mould. DEKALB 24-10RY Crop Kind: RR Maturity: 2425 CHU Variety Highlights: Another addition to the lineup, with good maturity similar to 25-04R. Also has excellent lodging resistance, yield potential and white mould tolerance.

D GUSHER.

SeCan Chadburn R2 Crop Kind: Genuity RR2Y Maturity: 2475 CHU Variety Highlights: High yield potential, with excellent lodging resistance, medium sized seed, good Iron Deficiency Chlorosis (IDC) score.

Pride Seeds PS 0083 R2 Crop Kind: RR Maturity: 2500 CHU Variety Highlights: High performance RR2Y variety with excellent agronomics and yield potential. Medium tall plant height with medium canopy structure and excellent standability. Registration pending.

Pioneer Hi-Bred 900Y61 Crop Kind: RR Maturity: 2425 CHU Variety Highlights: 900Y61 is a very early variety with strong field emergence. It contains the Rps1c gene for multi-race Phytophthora resistance.

Our hybrids are backed by healthier agronomic performance, higher profits from healthier oil premiums and contracts, and the Healthiest Profit Challenge. More acres are needed right now to meet the growing demand for heart-healthy Omega-9 Oils. Talk to your Nexera canola crusher or retailer. Call 1.800.667.3852 or visit healthierprofits.ca.

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900Y81 Crop Kind: RR Maturity: 2475 CHU Variety Highlights: 900Y81is a new early variety with solid agronomics. Very good harvest standabilty. † ™Trademark of Dow AgroSciences LLC ®All other products are trademarks of their respective companies. ® Registered trademark of the Canadian Football League 0811-16906-2

Lee Hart is a field editor for Grainews at Calgary. Contact him at 403-592-1964 or by email at lee@fbcpublishing.com

11-08-22 2:26 PM

Ad Number: SEC_THRIVE11_T Publication: GrainNews 3Col x 133 (6 x 9.5”) Non Bleed

Produced by: SeCan Product/Campaign Name: SeCan AC KWaskada Date Produced: February2011

/ grainews.ca

NOVEMBER 7, 2011

Features New varieties

19 new corn varieties for the west

From an ultra-early maturing feed variety, to several grain corn varieties, farmers have several new options for 2012 BY LEE HART

All varieties on this year’s list are Roundup Ready herbicide tolerant varieties. Dekalb is using a new term — Genuity — with some of its Roundup Ready varieties, which refers to a package of traits included in those varieties.

or western Canadian farmers looking to diversify crop rotations — corn is coming. Canadian seed companies are introducing 19 new varieties suited for Western Canada in 2012. Of those 19 varieties, seven are Mycogen Seed considered most suited to feed or silage, another eight varieties are F2F343 described as dual purpose — suitCrop Kind: RR2 able for both grain and silage, and End Use: Feed four varieties are described as most Maturity: 2700 CHU suitable for grain. Variety Highlights: A new Mycogen Seed has a feed variety generation, brown mid-rib (BMR) requiring the highest heat units hybrid featuring excellent ton— 2700 CHU, but most other new nage, NDF digestibility and corn varieties are in the 2200 to Roundup Ready herbicide toler2400 heat unit range, and Pioneer ance. A medium tall hybrid with Hi-Bred even has one feed variety, good stress tolerance plus exceldescribed as ultra-early which has lent ear development SEC_THRIVE11_T_GN.qxd 10/25/11 2:25 PM Page 1 and tip fill. a 2000 CHU rating. Best performance will be on high-

fertility fields that have good water-supplying capacity. F2F343 will work well in continuous corn or rotated crops.

root and stalk lodging resistance and drought tolerance.

Pioneer Hi-Bred

Edge R Crop Kind: RR2 End Use: Feed Maturity: 2150 CHU Variety Highlights: Edge R shows excellent promise as a high tonnage variety for growers looking for early maturing silage. In addition to excellent digestibility, Edge R has shown high ratings for net energy and plant health.

39F44 Crop Kind: RR2 End Use: Feed Maturity: 2000 CHU Variety Highlights: 39F44 is a new ultra-early hybrid that shows very good stress emergence. It has very good silage characteristics. P8622HR Crop Kind: RR2, HX1, LL End Use: Dual purpose Maturity: 2600 CHU Variety Highlights: P8622HR is an introductory hybrid with solid agronomics. It has above average

CDC Thrive

CWRS Wheat

Clean fields. High yields.

E50G27 R Crop Kind: RR2 End Use: Grain Maturity: 2350 CHU Variety Highlights: E50G27 R is a new grain hybrid that provides high yields and good dry down. E50G27 R will be commercialized with glyphosate resistance and can be used in areas without extensive corn borer pressure or as a refuge. E50B12 R Crop Kind: RR2 End Use: Grain Maturity: 2400 CHU Variety Highlights: E50B12 R is a new grain hybrid that provides high yields and test weights combined with fast dry down. E50B12 R is a step forward for growers who demand both yield and dry down in potentially challenging Manitoba harvests.

Monsanto DKC26-25 Crop Kind: RR2 End Use: Dual purpose Maturity: 2125 CHU Variety Highlights: DKC26-25 is a dual purpose hybrid with excellent grain yield potential. It is a tall hybrid with good late season plant health and stress tolerance. DKC26-28 Crop Kind: Genuity (RR2) End Use: Dual purpose Maturity: 2150 CHU Variety Highlights: DKC26-28 features the Genuity VT Double PRO trait with two modes of insect protection for above ground control. Genuity VT Double PRO also allows growers to reduce refuge to five per cent of acres to increase yield potential across a larger acre base.

✔ Early maturity ® ✔ Clearfield wheat

for broad spectrum weed control

Clearfield

Brett Young

Production System for Wheat

See your SeCan seed dealer or local Cargill retailer today! ®

Genes that fit your farm. 866-665-7333 www.secan.com

Developed by Crop Development Centre, University of Saskatchewan. * Plant Breeders’ Rights applied for. Clearfield and the unique Clearfield symbol are registered trade-marks of BASF Agrochemical Products B.V., used with permission by BASF Canada Inc. © 2011 BASF Canada Inc The Cargill Logo is a trade-mark of Cargill, Incorporated, used under licence. © 2011, Cargill Limited. All Rights Reserved. Genes that fit your farm® is a registered trademark of SeCan.

REVISED for Size Ad Number: SEC_THRIVE11_T

DKC27-54 Crop Kind: RR2 End Use: Feed Maturity: 2175 CHU Variety Highlights: DKC27-54 is an excellent silage hybrid that has very good test weight, drydown and plant health. DKC27-55 Crop Kind: Genuity (RR2) End Use: Feed Maturity: 2200 chu Variety Highlights: DKC27-55 is a silage corn hybrid that provides very good test weight with the added advantage of the Genuity VT Double PRO trait. DKC28-76 Crop Kind: RR2 End Use: Dual Purpose Maturity: 2200 chu

Variety Highlights: DKC28-76 is a hybrid that has excellent top end yield potential for grain and has a dual purpose fit. It is a tall hybrid with excellent harvest appearance.

Pickseed 2304RR Crop Kind: RR2 End Use: Feed Maturity: 2225CHU Variety Highlights: Good disease package, high bushel weight hybrid, with tall plant height. 2411GT/CB/LL Crop Kind: GT/CB/LL End Use: Feed Maturity: 2325CHU Variety Highlights: Excellent yielding and early maturing hybrid. It exhibits fast drydown and excellent stalks and roots.

Pride Seeds A4022RR Crop Kind: RR End Use: Grain Maturity: 2075 CHU Variety Highlights: Early maturity, excellent yielding grain hybrid for western Canada. Strong agronomics with very good spring vigour, stalk strength and dent grain for enhanced drydown. A4023BtRR Crop Kind: Bt, RR End Use: Grain Maturity: 2100 CHU Variety Highlights: Early maturity, excellent yielding grain hybrid for western Canada. Strong agronomics with very good spring vigour, stalk strength and dent grain for enhanced drydown. A4176BtRR Crop Kind: Bt, RR End Use: Dual Purpose Maturity: 2125 CHU Variety Highlights: Excellent yielding, high test weight corn hybrid with good spring vigour and grain quality. A4240RR Crop Kind: RR End Use: Dual Purpose Maturity: 2200 CHU Variety Highlights: Tall Roundup Ready hybrid, with dented kernels that can be used for grain or silage. It is said to have outstanding yield potential. A4630RR Crop Kind: RR End Use: Dual Purpose Maturity: 2275 CHU Variety Highlights: Excellent stalks and grain quality in this high yielding hybrid. Dent grain for enhanced drydown. A4632G3 Crop Kind: Yieldgard VT Triple End Use: Dual Purpose Maturity: 2300 CHU Variety Highlights: Pride’s earliest G3 hybrid. Excellent yielding with excellent stalks and grain quality. Dent grain for enhanced drydown. † Lee Hart is a field editor for Grainews at Calgary. Contact him at 403-592-1964 or by email at lee@ fbcpublishing.com

NOVEMBER 7, 2011

grainews.ca /

Columns AGRI-COACH CORNER

The elusive estimated nitrogen release number Knowing if and when residual nitrogen will be available to the next crop can help in developing the correct spring fertilizer rates

he first step in deciding on nitrogen (N) fertilizer rates is to estimate how much N will be available to a crop over the growing season or ENR (estimated nitrogen release). You can be leaving both yield and quality on the table if this is not part of your N calculations. Glyn Evans, working with Rolla Ag out of Rolla B.C., asked this question, “I have fields of HRS wheat with yields ranging from 50 to 90 bushels, so there has to be significant differences in amounts of N tied up. Fields range from minimum till to zero till, which also should have an effect on the amount of tie-up. I was wondering is there a formula or rule of thumb for estimating how much N will be tied up by cereal straw?” That question sparked an early morning soliloquy from my fellow senior agri-coach, Elston Solberg. “It’s all about the immobilization and mineralization portions of the N cycle. This dynamic process is cycling pretty much all of the time. My advice is to start by simplifying this calculation because there are so many variables to consider.” Oats tend to have a wider C:N ratio and the ratio narrows for wheat, followed by barley, then canola, then peas and pulses, generally. There are other factors that impact this of course, but in general, count on a range of 50 to 80:1 for cereals, which is why there is so much immobilization. Canola sits around 30-35:1. This the tipping point for immobilization/ mineralization. I usually say canola is a wash unless straw is not spread well, then canola straw will immobilize N. At 20-25:1 for peas, the net effect is mineralization plus credit some additional N for protein as well for the N released past the yield window. Knowing all this, we can take our soil test N levels and decide whether the straw will result in a nitrogen credit or debit and adjust our N rates accordingly. When I said simplify, I meant initially because over time if we knew the yield and protein of the grain, we could fine tune things considerably because the whole process is governed by C:N ratios. A high protein grain will by default produce a higher protein straw within the same

variety. If we knew the straw to grain ratios of the various varieties grown, we could fine tune things more because a variety that grows more straw will immobilize more N than a variety that grows less with all other factors similar. If we know the degree of straw incorporation, we could make a better estimate because the more the straw is incorporated (and evenly), the more and faster the N will be immobilized but also the quicker it will be re-mineralized. Each farm and even field could have a different ENR number and depending on the information available, the more accurate that ENR number. Agri-coach Jim McComb, out

of Marmora, Ont., adds “When the Ontario farmers who have removed the straw residue for years decide to switch (to incor-

get things rolling, but once you are up to speed, it takes less to keep it there. The momentum of the N cycle comes from building

Which crop stubble will tie-up or release N in the first year? How much? porating), we need to get the N cycle into momentum, like getting a full truck load of grain rolling down the road. It takes a lot of diesel and horsepower to

the healthy life in the soil and the N is returned to be available. Now we are using split N applications to better manage nitrogen. The soil testing, tissue

testing and visual observations all provide us with clues that enable us to fine tune our ENR numbers.” I was impressed by the insight shown in this discussion. Jim’s analogy of the “full truck load of grain” fit well with early research on immobilization in the Prairie region. High amounts of immobilization were observed after a big wheat crop on fallow (a big truck load of high C:N ratio residue following a year of none). If you use your local knowledge and the guidelines Elston has given, you won’t be far off. Remember the first word in ENR is “estimated.” † Doug Penney is a senior agri-coach for AgriTrend Agrology

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/ grainews.ca

NOVEMBER 7, 2011

Columns OFF-FARM INVESTING

Tips on when to sell stocks

Strategic selling of stocks can be just as important as careful buying. Following market indicators may help determine highs and lows in the market ANDY SIRSKI

ver the years I’ve been quite good at buying stocks at or near bottoms by using my favourite market indicators — the MACD (Moving Average Convergence/Divergence), the Relative Strength Indicator (RSI) and the full stochastic. They come from different sources of information so when they start to move in the same direction I usually pay attention. Using indicators can help identify when stocks “go on sale,” which happens about three times a year, but they’re also useful when deciding when to sell to generate cash. Selling right is just as important as buying right, especially if our stocks start to lose money. It’s one thing to give profits back to the market, it’s another to lose net worth and it’s even worse if we made that net worth somewhere else. Selling when the shares “are doing so well” is not as easy to do as it sounds because we have to be contrarian and not go with the crowd but it is possible.

MINIMIZING LOSSES It’s one thing for you as a farmer to lose money farming whether it is your money or the bank’s. That

wouldn’t surprise most Grainews readers, but if you take profits from your farm and buy stocks and lose money that is as close to a financial catastrophe as it can get. Many cow-calf producers didn’t make much money from 2003 to this year. A grain farmer told me that four years out of the last 32 years of farming made 80 per cent of his money. Many things besides stocks can lose a person money. Some decisions are irreversible and once the money is in the ground it is impossible to retrieve it. With stocks, our decisions are reversible so if we are making money we can sell out and keep the cash. If we are losing money we can sell the shares and stop the bleeding. Both might be hard to do but, again, possible. I’m sure some readers say that their stocks are so good that if they do drop in price they will come back up in price so why worry? If that is how you feel then maybe flip the page. Just keep in mind that shares of Bank of Nova Scotia were $54 in October, 2007, and are still below that price. They did drop to $24 and they did go up to $62 but as of early October, the price per share is still a couple bucks below that October, 2007, of $54.

MORE ON MARKET INDICATORS The signs were there to sell those shares in October and November, 2007. The signs were there to buy those shares at $28 or so on the way up. The signs

were there to sell them again at $60 or so earlier this year, but you have to be following the indicators to know that. A few indicators have been quite good at showing us that stocks could soon go down or up. One indicator is the $SPX:$USB, which is a ratio of the S&P 500 and 30-year U.S. bonds. If you put that indicator on a chart on www.stockcharts.com you will see what I mean. In late July that indicator rolled over and started to drop. In early October the chart is forming lower and lower highs and lower and lower lows. That sort of market can cost us big bucks. Our readers of StocksTalk are great at sharing information. One reader compared the $SPX:$USB ratio to the exchange traded fund (ETF) of 20-year U.S. bonds. The symbol is TLT. If you put TLT on a chart and compare it to $SPX:$USB you will see that in late July, the TLT started to rise while the $SPX:$USB ratio started to drop. Lately as the U.S. bonds went up many stocks went down. Our gold and silver stocks stayed up for another two weeks and then dropped like a rock out of your stone picker. I had protected our money with SLW, one of our favourite stocks, by selling calls at strike price $36. We collected $5 so we had downside protection. If we had wanted to buy extreme protection, we could have sold calls on SLW strike $32 when the shares were $40 and collected $8.75 per share. I’m not sure you can picture this,

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but if a stock drops from $40 to $31 all we lose is $1 or so. The folks who did not sell calls lost $9 per share. Indicators showed stocks were about to drop. All we had to do was believe them and work to preserve our capital. One way is to go to cash when we see trouble ahead. Another way is to sell calls below the price of the day. A third way is to borrow shares and sell short or buy puts.

CHOOSING STOCKS I’ve been looking for a stock that pays a decent dividend, could raise the dividend and would let me sell calls and puts on it. I thought I found it when I bought shares in Just Energy (JE). The company pays a dividend of $1.24 per share per year, and pays the dividend every month and I can sell calls and puts on it. Turns out the stock is susceptible to the ups and downs in the market. I will make money on the calls and the dividend but I sold the shares as they started to drop. It looks like JE will not be the stock I was looking for. By the way, since September has ended it might be a good time to say that according to research done by Brooke Thackray September has not been a positive month for stocks from 1950 to 2008. Interestingly enough September was decent in 2009 and 2010 but I think that was one of those aberrations we see from time to time. So if we want to protect our portfolios we might want to learn how to sell covered calls well below the price in July, or buy puts or go to cash. If we are looking for bargains, odds are they will come in September and maybe October; all we have to do is have money and wait. As of early October I see Microsoft (MSFT) pays a dividend of 80 cents a year, has a good premium on the calls and I could sell puts on the stock. The company has billions of cash, but a lot of that cash is overseas and would be taxed if MSFT brought it home. The company is borrowing longterm money at very low rates of interest and actually increased its dividend by four cents per quarter just lately from 16 cents per share to 20 cents per share. That’s up 25 per cent. Many believe that MSFT is part of the group of stocks called

dominators which means they are the big leader in their industry. Many dominators raise dividends year after year. Here is how MSFT stacked up as of early October: Buy 1,000 shares for US$25,000. The dividend is 80 cents a year or 3.2 per cent, which is more than most banks and bonds pay. That’s $800 a year or $200 per quarter. I could sell a call for strike price $25 for November and collect $1.27 per share or about $1,200. There would be little capital gain and the shares might get sold. The potential is we could sell calls like this six times a year which would or could bring in $1.27 x 6 = $7.62 + 80-cent dividend for a total of $8.42 which is 33 per cent per year. More likely I would sell a call at a price above my costs. Again, early in October I could sell a call at strike price $26 and collect 80 cents per share for November and again doing that six times a year would bring in $4.80 + 80-cent dividend is $5.60 per year or 22.4 per cent per year and a chance of $1 or more of capital gain. As always, if we sell calls the shares could get bought from time to time but then they seem to go on sale several times and odds are we could buy the shares again for less than the price the shares sold for. If they did get sold we might lose the dividend, but as you can see the premium from selling calls can make us more money than the dividend. Let’s look at MSFT for $200,000. At today’s price that would buy us 7,500 shares. At 80 cents per share the dividend is $6,000 a year. Add in 60 cents of premium six times a year from selling calls and we have another $3.60 x 7,500 shares for a total of $33,000 a year and all taxed at preferential rates. I really doubt a quarter section of farmland in most parts of Canada will bring in that money of mostly net income that would be taxed at a preferential rate. Do check my numbers, even if they will be different by the time you read this. Of course there is risk with stocks but don’t tell me there isn’t risk with cropping. † Andy is mostly retired. He also publishes a newsletter called StocksTalk. You can read StocksTalk free for a month in one of two ways. Send an email to sirski@mts.net or Google StocksTalk.net, click on free month, click on form, fill out a few lines and click send

ATTENTION FLAX GROWERS Remember to test your flax for Triffid before you sell The flax industry continues its efforts to remove Triffid from Canadian flax. The Flax Council of Canada’s Farm Stewardship program can share 50 per cent of testing costs, up to $100 per sample. See www.flaxcouncil.ca for a list of approved labs.

For more information, go to www.saskflax.com Funding provided by the Canadian Agricultural Adaptation Program and Agriculture and Agri-Food Canada.

NOVEMBER 7, 2011

grainews.ca /

Columns SOILS AND CROPS

The other side of average Many are enjoying good yields and high prices, a welcome change from the norm. Before thinking expansion or spending, think risk management LES HENRY

or many farmers in southeast Saskatchewan and some other areas, 2011 has been a year to forget, burn all the calendars and hopefully carry on. For those of you in that situation please skip this article and go on to the next. But for many of us in central Saskatchewan and parts of Alberta and Manitoba, 2011 was a “once in a lifetime” sort of year. The soil was full of water from the excess of 2010 but the Prairie sun shone brightly all summer with just enough rain and it was warm, but not too hot. There were few damp or high humidity days to flush up the diseases and, except for a few cutworms in the spring, no bugs or other gremlins to eat away at our crops. As harvest approached we all expected lousy September weather to bring us back to reality. But, no, Mother Nature came through again. The Jet Stream was somewhere in the NWT and an Omega block, just like 1988, was stuck in place leaving almost all of Saskatchewan with unbelievable endless sunny days. Some were even on the hot side and hot canola in the bin was a bit of a worry. Most years when we have perfect harvest weather there is not much crop to take off anyway, but not so this year. No frost until September 14 and then only one night. Many farmers saw fantastic yields and very good quality with no or little green count in canola. At harvest time spot prices almost always drop off a lot but this year canola prices actually went up as the combines started to roll. In our area farmers were getting very hard up to find anything to complain about. By October we could complain about it being too dry, but on October 7 we got 1-3/4 inches of nice steady rain — a nice start for next years crop. The profitable grain prices and good crops bring back fond memories of the 1970s. There was serious money in farming, land prices skyrocketed and machinery lots were empty, with lots of shiny new iron on every farm. Let us remember that at some time we will see the other side of the average in terms of both crops yields and quality and especially on prices. Many say “this time is different,” with all those mouths to feed so crop prices will stay up for a very long time. I wish, of course, but I do not believe it for a moment. Malthus had us eating ourselves out of house and home a few hundred years ago, but cycles have come and gone and his predictions have yet to come true.

On the land price issue, there are some things different this time. In the 1980s ownership of Saskatchewan farmland was limited to Saskatchewan residents only, this being a bit too restrictive because people raised on farms who ended up with a career elsewhere had to divest any land even if it was the home farm land they inherited. The pendulum has swung too far in the other direction. Now there are corporations buying up blocks of land. That is adding to the high prices, but in many cases farmers do it to one other in good times.

So let us not forget the other side of the average can appear without much notice. Just

and up. Seems far fetched but it has seemed that way in the past also.

Just think about 25 bushel wheat at $4 a bushel and 10 per cent interest rates think for a moment about a 25 bushel wheat crop at $4/bu. or 15 bushels of canola at $5/bu. and interest rates at 10 per cent

The European and U.S. debt situation will lead to more trouble ahead. It seems when they have dug a hole they cannot

leap out of the answer is “keep digging”. Doesn’t make much sense to me. As Alf Bryan always said “I may be wrong but...” As you plan expansion activities to take advantage of the rosy times think about the other side of the average. † J.L.(Les) Henry is a former professor and extension specialist at the University of Saskatchewan. He farms at Dundurn, Sask. He recently finished a second printing of “Henry’s Handbook of Soil and Water”, a book that mixes the basics and practical aspects of soil, fertilizer and farming. Les will cover the shipping and GST for Grainews readers. Simply send a cheque for $50 to Henry Perspectives, 143 Tucker Cres, Saskatoon, SK, S7H 3H7, and he will dispatch a signed book poste-haste

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NOVEMBER 7, 2011

Columns FARM FINANCIAL PLANNER

Life insurance decisions in the face of tax and estate planning This elderly farmer is trying to use a life insurance policy to pay taxes owing once assets are sold. Will it be enough? Is there a better way to manage farm succession? BY ANDREW ALLENTUCK

n Alberta, a farmer we’ll call Bill has been a grain producer for 57 years. His wife, who we’ll call Elizabeth, passed away not long ago, leaving Bill, now 84, to manage 5,000 acres of land. He has two children, a daughter, 44, and a son, 42, both of whom have built lives of their own off the farm. The farm is incorporated and is able to take advantage of low small business tax rates. In 2000, Bill bought a long term business succession and estate plan that includes a $600,000 term to 100 life insurance policy with the idea that it would pay various taxes due when he passes away. Ten years have passed and Bill now has concerns about the life insurance policy. The policy is a major investment that costs $18,000 a year in premiums. Yet the term policy is only rented coverage. Unlike a whole or ordinary life policy, it builds no cash value. In effect, Bill is renting life insurance. Worse, he has to declare the $18,000 per year as a taxable personal benefit of the company-owned life insurance policy. Bill figures the money

going into the policy is a waste. He is considering canceling the coverage. The question is, is that wise? Farm Financial Planner asked Don Forbes, head of Don Forbes & Associates/Armstrong & Quaile Associates Ltd. based at Carberry, Man., to work with Bill in order to figure out if the life insurance policy is good value for the money. In Forbes’s view, the policy is a fair deal, but not necessarily the best way to handle the problem of succession to children who don’t want to farm. There is a lot more that has to be done, he says. The insurance policy, viewed just as insurance, is not a bad deal, Forbes says. “The death benefit is guaranteed, the monthly premium of $1,500 is fixed and cannot be raised before age 100,” he says. “Moreover, if the policy were issued today with the same age for the insured it would cost 30 per cent to 40 per cent more. Bill has a better investment than the life insurance company anticipated in 2000.” The essence of the coverage is that the policy will pay tax on accrued but unrealized gains on the farm and deferred taxes. But in retrospect, the policy may

not cover all taxes due. Today, if the farm were sold for cash, the machinery sold at auction at market value and the assets of the family farm corporation were liquidated and paid out to shareholders in the same year, the combined tax bill would

be $1,300,000 consisting of an $800,000 income tax liability for the corporation and $500,00 for the shareholders. These are numbers worked out a decade ago. Values and taxes today would be much higher, Forbes says.

In a worst case scenario, the income tax payable on the disposition, would be $1.3 million consisting of $800,000 tax due by the corporation and $500,000 at the shareholder level. It was a massive and unexpected burden, Bill says.

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grainews.ca /

Columns This estimate, done in 2000, came on top of a massive, 70 per cent capital loss on technology investments. Quite understandably, Bill is not eager to put more money into the stock market.

WHAT TO DO? If Bill were to take a $5 million outstanding offer for the farm, he could replace the land he would sell with 2,000 acres of farmland near a major urban area in Alberta with a $4 million price tag. His $4 million capital gain on existing farmland would be transferred to the replacement land. The tax payable would be deferred and new land would be carried on the company books at zero value, Forbes says. The $1 million that could be paid out of the present farming corporation would be used to purchase $1 million of farmland adjacent to the new farm corporation land. The family farm corporation would have a long term lease on Bill’s daughter’s personally owned farmland and would pay rent to her. A new plan for control and transfer of the farming corporation would be complex, but would accomplish to goal of transfer of assets with minimum tax cost. The plan would freeze’s Bill’s estate so that the $4.5 million of net equity in common shares that Bill owns would be converted to $3.9 million of Class A preferred shares and $600,000 of Class I preferred shares. The taxable part of commons shares would be transferred to the preferred shares on a tax-free basis. The preferred shares would be carried on the farm corporation’s books at zero book value but with a $4 million capital gain attached to them. That gain would be taxable at redemption of the shares. One hundred common shares would be sold to the son at a nominal value. All the farm’s value is in the preferred shares, but the son would get full operational control of the farm. To equalize the cash value between the son and daughter, a $600,000 term to 100 life insurance policy would be issued on Bill. The policy would be owned and paid for by the family farm corporation. As part of their shareholder agreement, the farm corporation would pay $600,000 to the daughter tax-free through the company’s capital dividend account. The farming corporation would issue a promissory note to the daughter for $400,000 with a

In this plan, Bill would have Exemption, but it excludes the payout to take place over the responsible for a $400,000 note to the sister and a $600,000 com- achieved an estate freeze of $4.5 sale of assets. Only the sale of next ten years. In this elaborate shuffling mitment to the sister payable on million and a way for his son to qualified company shares are of paper, the daughter would Bill’s passing. The corporation run the farm or at least to have eligible. The son has an agreeget an interest in $1 million would still have to pay $18,000 someone else keep it running. ment to purchase the parents’ of farmland that she leases to per year of premiums on Bill’s His daughter would receive preferred shares at a fixed value so that they generate a tax-free the family farm corporation. capital gain of $750,000 for She would get rent every year Bill. from this investment. The famIf the life insurance policy ily farm corporation will pay were to be discarded, the son $40,000 on a $400,000 note for would have to borrow $600,000 ten years. for his sister’s interest in the There would be a commitment farm business and $240,000 for from shareholders that the daughincome tax payable on the purter would get $600,000 on Bill’s chase of Class I shares. The death with proceeds to come from T Bqq2!!!!!T bqq3!!!!!T GRACOL T Fqtpo!8:11 son has already paid $180,000 the life policy. The son would get through the farming corpora100 per cent of common shares in Client: Broadhead Co. tion on premiums on a life the family farm corporation with insurance policy that has no a net worth of $4.5 million. That’s Kpc!Op; 88755 cash value. $4 million in land and $500,000 ¦!2232!Kbdltpo!Tu!OF-!Tuf!224!¦!Njoofbqpmjt-!NO!66524!¦!723/878/4566 All things considered, this is no in machinery. term life policy. The son would about $2 million as her legacy. Colorkey Profile: Gracol T Swoptax T News Supplied 311 T 286!!! 244!!! T 231!!! T 211!!!T 96!!! T 76! EpsonThe Lpi: T timeTto ditch Bill’s term life policy. to T the income The corporation, which would beT 261!!! ableT to farm actively, perhaps “It is aT News key component of the on a partTtime or could hire strategy the use ofT Pub/Swop3 be the son’s, would take a $1.3 Approval Stock: T Fortune McCoybasis, T Producto T Pub T Newsreduction T Supplied Epson Stock:is T Comm/Gracol million liability for income tax, a farm manager or even rent out the $750,000 Qualifying Small estate plan,” Forbes says. † though that sum could be elimi- the operation to someone interest Business Corporation Capital nated by implementation of the in active farming. For now, the Gains Tax Exemption. It is Andrew Allentuck’s latest book, When Can I Retire? Planning Your Financial Life After son has no interest in running similar to the Qualifying Farm Work, was published by Penguin Canada estate plan. Property Capital Gains Tax earlier this year The corporation would be the farm.

A new plan for control of the farm corporation would be complex, but would accomplish a transfer of assets with a minimum tax cost

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NOVEMBER 7, 2011

Columns MANAGEMENT MINUTE

Four approaches to valuing sweat equity Being fair in succession planing doesn’t mean doling things out equally. What are years of work worth when passing on the farm? ANDREW DERUYCK

MARK SLOANE

common challenge that we encounter in succession planning is the concept of sweat equity and the opinions vary as widely as to the definition of it. Recently one old codger that we began working with put his opinion very bluntly. He summarized it as follows, “Boys, if you can’t prod it or poke it, ride it or smoke it, ain’t real and you can’t use it.” On the other hand

we have worked in situations where the parents want to give a multi-million dollar farm to one child because they have worked on the farm since graduating. We thought we'd take the opportunity to share with you some common rationales that we have seen farm families use to justify fairness to other siblings in completing their succession plan. Ned Needshalp found himself in a pickle when his hired man of 15 years, Steady Teddy, retired. Ned operates a sizeable grain farm that has very high seasonal labour requirements. Ned is 55 years old and was faced with the decision to downsize, quit or begin training new help. His son Fred expressed an interest in the farm but was concerned about the capital requirement and risk associated with purchasing the entire operation. They reached an agreement in which Fred would work on the farm for a sal-

ary they agreed upon — $50,000 per year, $30,000 of which Fred uses to live upon and $20,000 which remain invested in the farm with a 7.5 per cent return.

his prominent corporate career and returning to the family farm. After much soul searching Jobbs decided to give the farm a chance. His parents, in

If you can’t prod it or poke it, ride it or smoke it, it ain’t real and you can’t use it This investment is kept track of and if Fred decides to take over the farm some day this will form part of his down payment. S. Jobbs has held a number of prominent executive positions in the corporate world. He has climbed the corporate ladder two rungs at a time, however felt torn between continuing

Tundra

“You’ve got hail”

an effort to encourage and support his decision, felt that a fair approach to the situation was to offer him the same executive salary he was making in the corporate world. His drawings from the farm were only a quarter of the salary, however it was expected that he pays fair market value for the farm. Similarly to the previous example, the difference between the salary and the drawings would remain invested in the farm. Ed Jimcated ran a successful farm his entire life on a Grade 9 education and was successful doing it. He placed little value on formal education. In an effort to keep his son Ed Junior on the farm and avoid the cost of sending him for post secondary education he offered his son the value of the education in equity in the farm. Ed had two other children which he sent to the big city for some schooling and it cost him $15,000 in room, board, tuition and books in addition he figured $25,000 per year was missed if the children had been working full time. He offered Ed Junior $40,000 per year for five years a total of $200,000 with a 7.5 per cent return if he would stay home and work with him on the farm for five years. At the end of the five years this sweat equity could

CAFA

be rolled into ownership on the farm or he could take his money and run. Kary Kepitgoin is a fourth generation farmer and can’t imagine selling the farm on his watch. He wanted someone in the family to take over the operation and was willing give it all away to see the operation continue on. There was one problem his wife wanted some sense of fairness to the children who decided not to farm. Their son enjoyed the farm work however had very realistic expectations of profit on the operation and because they were at established jobs his wife was not willing to take the risk with out some certainty that they would own the necessary assets for a sustainable farm in the future. Kary and his wife agreed that they would sell the farm in the future at a reasonable price that would easily cash flow and the difference between this price and market value would be called sweat equity. This was discussed with the other siblings and everyone was in agreement. In summary, the four situations demonstrate four different examples of calculating sweat equity. The decision to use on not to use sweat equity is very individual, however if you are going to use sweat equity it is important to pre-determine its value. Where we have seen major problems is in situations where open discussion has not taken place and there are vastly different expectations of sweat equity value and terms within the same business team. † Andrew DeRuyck and Mark Sloane manage two farming operations in southern Manitoba and are partners in Right Choice Management Consulting. With over 25 years of cumulative experience, they offer support in farm management, financial management, strategic planning and mediation services. They can be reached at andrewd@goinet.ca and sloanefarms@hotmail.com or 204-8257392 and 204-825-8443

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NOVEMBER 7, 2011

grainews.ca /

Columns Guarding wealth

Be safe, not sorry with investments Reports of death of European banks are exaggerated, but it’s no time to take on risk By Andrew Allentuck

or investors, the summer of 2011 was tough. The S&P/TSX Composite Index was off 20 per cent, as I write, and the world is hanging by its virtual fingernails onto news from Europe — will Greece default on its national bonds, will other countries fall, and will European banks go bust? The scenario reads like something out of the 1930s. Worse, there seems to be a Mexican standoff in which the Greek voters who demonstrate daily in the streets won’t allow their government to but their generous social benefits or raise taxes and in which German voters, tired of bailing out the profligate Greeks, say they won’t pay another Euro to bail out anybody. In this social, political and economic mess, the world’s investors have been taken for a very unpleasant ride. The prospect of global collapse as banks, which hold each other’s deposits and bonds, become insolvent, triggering runs on tellers’ windows and then depression when the money runs out, has wrecked stock values around the world. If you held any national bonds except those of Greece, Ireland, Portugal, Spain and Italy, or top grade corporate bonds issued by companies in the U.S., Canada and the U.K. you have done well. Prices of U.S. Treasuries, Government of Canada bonds and British gilts have ascended to the point that their running yields (interest payable divided by price) has hit historic lows. If you want to buy government bonds, it is probably too late. If you are one of the far sighted individuals with senior government debt in your RRSP or safe deposit box, hold on. It is probably too early to sell. For the record, Canadian fixed income mutual funds generated a 3.8 per cent return for the 12-months ended Aug. 31, 2011, which is not bad in a market driven by tragedy. What comes next is: Will the masters of the European universe allow Greece to disgrace the Euro? To break up the European Union? To destroy banks around the world? No, my guess is not, and here’s why. Though German voters are angry that they are asked again and again to bail out profligate Greeks, they have no choice but to do it. If the Euro fell apart and each of the 17 nations that use it had to reintroduce its own currency, then Germany, in particular, would have the best currency in Europe. The new Mark or whatever they call it would be backed by a nation with a strong trade surplus and a strong national balance sheet. Investors would rush to buy Marks, their price would soar, and Germany, which is heavily dependent on exports, would suffer a recession. German economists know it, the world’s monetary authorities know it, and even German voters demonstrating in the streets of Berlin know it. Breaking up the Euro would impose immense costs on the EU as well. It isn’t going to happen. Already, European monetary authorities are coming to the aid of banks that, because of their holdings of Greek and other gov-

ernment bonds, are seen as vulnerable to collapse. A word of explanation is needed. A bank can be solvent, which means that it has positive net worth, or insolvent, meaning that it owes more to depositors, bondholders and others than it has or can raise. It can be liquid, which means that whatever the state of its books, it has cash and credits to pay out on demand. Central banks in Europe and the European Financial Stability Facility (EFSF) are rushing to supply liquidity, much as the Fed has done for American banks. The process is one, buy bonds from the banks and in return, give them cash. Nobody is fussy about what bonds are bought and you can be sure that the banks are dumping

their worst holdings, all with the consent (or connivance, if you like) of the regulators. The second move is to supply unlimited liquidity to banks, which the European Central Bank the ECB, agreed to do on Oct. 6. The ECB will loan any bank in its region any amount of money to meet depositor withdrawal demands or other needs until January, 2013. What’s next? Global stock markets continue to be challenged by problems tougher to fix than European bank balances. Fears of a slowdown on internal growth in China have driven down Canadian commodity prices including those of copper, potash, and steel. There is growing recognition that the lavish growth rates of stocks in China have been fueled by issuance of

new, overpriced shares rather than by organic growth of companies already listed. Market forecasters now debate whether China will have a hard landing with a major recession or a soft landing with a modest decline in stock prices. The jury is out on this one. In the United States, unemployment of 9.1 per cent, the level reported in September and suspected to be more like 15 per cent when one adds in discouraged workers no longer seeking jobs and other workers with just part-time jobs, is probably 15 per cent. The tragedies of families losing their home to foreclosure, further declines in house prices measured by pending home sales, and the outlook that it will take years to clear the oversupply of

houses adds to the grimness of the American outlook. In this market of gloom and relatively little optimism, stocks look like a long shot. Buy now and wait for many years and you should get a capital gain. On the way, companies that support strong and rising dividends with strong balance sheets are not a bad investment, but not a great one either. After all, a few bad days can wipe out a four per cent to five per cent dividend. The current economic troubles of Europe, the U.S., and Canada will eventually fade. They always do. For now, being safe is better than being sorry. † Andrew Allentuck’s latest book, When Can I Retire? Planning Your Financial Life After Work, was published earlier this year by Penguin Canada

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/ grainews.ca

NOVEMBER 7, 2011

EXTENDED OUTLOOK FOR THE PRAIRIES Weather Forecast for the period of November 6 to December 3, 2011

Southern Alberta

Peace River

Nov. 6 - 12 Generally fair but snow, at times heavy in places on 2-3 days., mixed with rain. Variable temperatures often trending to the cold side.

Nov. 6 - 12 Generally fair but snow, at times heavy in places on 2-3 days. Variable temperatures often trending to the cold side. Nov. 13 - 19 Windy from time to time with temperatures varying from mild to cold. Fair on several days but with heavier snow in a few localities.

Nov. 27 - Dec. 3 Cold in the north with frequent snow. Seasonal in the south with colder outbreaks bringing occasional snow.

28.6 mms

Nov. 13 - 19 Colder in the north with snow. Changeable in the south as fair skies interchange with snow, heavy in a few places. Seasonal to mild.

Nov. 20 - 26 Mild spells in the south alternate with colder outbreaks and intermittent snow. Windy at times with higher windchills.

Nov. 20 - 26 Often fair with milder temperatures but a couple of windy outbreaks bring snow and higher windchills. Heavier snow in central and northern areas.

Nov. 27 - Dec. 3 Seasonal in the south with colder outbreaks bringing occasional snow. Cold in the north with frequent snow.

Nov. 27 - Dec. 3 Fair skies alternate with snow, heavy in places. Seasonal to cold. Cold in the north with frequent snow.

BELOW NORMAL

Manitoba Nov. 6 - 12 Generally fair in the south with melting temperatures at times. Intermittent snow, mixed with rain in the south, heavier snow in central and northern areas. Nov. 13 - 19 Fair apart from 2-3 days with snow, heavy in a few areas. Variable temperatures and windy at times. Colder in the north with periodic heavy snow. Nov. 20 - 26 Blustery winds bring variable temperatures with a few higher windchill days. Cloudy with scattered snow, heavy in places. Nov. 27 - Dec. 3 Variable with occasional snow, heavy in a few areas. Seasonal to cold at times. Cold in the north with snow.

Precipitation Forecast

-11 / 0 Edmonton 16.1 mms

NEAR NORMAL

-11 / -2 North Battleford

-9 / 0 Jasper

28.2 mms

-8 / 0

30.4 mms

-11 / 1 Red Deer 14.8 mms

Banff

-9 / 3 Calgary

Forecasts should be 80% accurate, but expect variations by a day or two because of changeable speed of weather systems.

Nov. 6 - 12 Seasonal to occasionally mild temperatures, but colder, windy outbreaks bring occasional snow mixed with rain in the south.

Nov. 13 - 19 Windy from time to time with temperatures varying from mild to cold. Fair on several days but with heavier snow in a few localities.

Nov. 20 - 26 Mild spells in the south alternate with colder outbreaks and intermittent snow. Frequent heavy snow in the north.

-12 / -2 Grande Prairie

Saskatchewan

11.6 mms

-8 / 4 Medicine Hat cms Lethbridge 14.819mms 16.3 mms 26 cms -7 / 5

-12 / -2 Prince Albert 16.5 mms

-12 / -4 The Pas

Precipitation Outlook For November

26.8 mms

16.3 mms

-11 / -1 Saskatoon 14.1 mms

-11 / -1 Yorkton

Much Above Normal Below Much above normal normal below normal normal

-10 / -1 Dauphin

-9 / -1 -10 / 0 17.8 mms 22.7 mms -9 / 2 Gimli Regina -9 / 1 Moose Jaw 35.2 mms 11.7 mms Swift 13.6 mms -9 / 0 -11 / -1 Portage -9 / 0 Current -9 / 1 22.9 mms Winnipeg Brandon 14.7 mms Weyburn ABOVE 14.9 mms 21.2 mms NORMAL 11.4 mms -9 / 1 Estevan Melita -10 / 1 13.7 mms

17.4 mms

Temperatures are normals for November 15th averaged over 30 years. Precipitation (water equivalent) normals for Nov. in mms. ÂŠ2011 WeatherTec Services Inc. www.weathertec.mb.ca

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grainews.ca /

Grain Marketing and Farm Finance FARM FINANCE

When are land prices too high? There’s a delicate balance between a piece of land’s production potential, its cost and its potential value down the road. Buying land isn’t always the best investment BY MARIANNE STAMM

y father always bought any land for sale along his farm boundaries. We often thought he was crazy to pay so much, but there wasn’t a purchase he made that wasn’t a smart move seen in hindsight. Most farmers could say the same thing, whether they bought or not. Today’s land prices, however, have some farmers wondering if that still holds true. When we bought our farm at Westlock, Alta., in 1993, it was the tail end of a longer period of poor commodity prices. A quarter of land sold for $75,000. Now my neighbours tell me someone is selling three quarters of land for $1,500,000. Yes, that’s half a million a quarter. What’s happened? According to Farm Credit Canada’s (FCC) annual farmland prices report from the spring of 2011: “Cash crop producers lead buyer activity. Strong demand with limited supply made farmland a hot commodity due to its historic performance as a stable investment and its current income generating potential.” The report cites low interest rates, high commodity prices, pent up demand and producers trying to maximize economies of scale as the driving reasons for the rise in prices.

expect productive values to pay for these land prices. You have to have another source of equity.” Many farmers look at the relation between land rent and purchase prices. If interest for land payments is the same or less than rent, then it makes sense to purchase the land if a farmer has the means to do so. If interest is higher, then maybe they should rent instead, given the option. Paul de Champlain is a 28 year old farmer west of Westlock who rents much of his land. “It is definitely getting harder to pick up land,” he says. “There is so much competition from bigger farmers. They have been in the business of farming a lot longer than I have

and have much deeper pockets than I do.” Tim Kubinec, who moved to the Westlock area in 1992, from Three Hills, Alta., says, “We farmers make the most money on the increase on land.” Or did, he hastens to add. “Rent helps your cash flow, but it’s not an investment.” In a December 30, 2010 article for the Western Producer, the late Adrian Ewins quotes University of Saskatchewan commerce professor Marvin Painter: “As the Canadian farm sector continues to change, farmers must realize that they are real estate investors just as much as farm commodity producers. Production is still a large part of land value, but other

factors are becoming more and more important.”

BUYING INTO A BUBBLE? There’s a time to buy real estate, and a time to sit back. Many, both farmers and investors and their advisors, are worried that the bubble could burst, that the highs have been reached. “We’ve seen it go from $800 an acre to $1,200, then go back down to $800,” Kubinec says of land prices in Three Hills. “I think this is a time when it will do that again. The last two jumps are too quick too much. I honestly think we’re at the top of the bell — a couple years will tell.”

Koch feels there’s still some room for prices to go up, but not like they have the last 20 years. “Land prices in the Three Hills area have capped at around $3,000-$4,000 per acre. We’ve been playing catch up.” So what are good reasons to buy land now? “Land doesn’t come up very often,” says Maureen Kubinec, Tim’s wife. “Usually you get one chance at it and that’s it.” “It’s a piece of dirt,” Tim says. “I like to look out the window and see my asset instead of getting a piece of paper.” Maximizing economies of scale can make good business sense. Richard Seatter of Triple

» CONTINUED ON PAGE 25

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DETERMINING VALUE There are two components built into the price of land. One is the production price. The other is the investment value. How much a farmer will pay for land depends largely on their view of these two components. What is it potentially worth to them? And the answer is as varied as the number of farmers. “Value is determined as what someone is willing to pay for it,” says Geoff Doell, of Growth AgriCoaching Inc., at Westlock. Some feel land should pay for itself, or it is too expensive. Doell asks his clients, “Is the piece requiring subsidization from other income sources? If it is, then it’s likely too high unless other factors are in play.” For many farmers, the current prices seem too high to justify the production of grain commodities. Loren Koch, who operates a mixed cattle and grain farm northwest of Westlock, says, “There’s no way you can

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/ grainews.ca

NOVEMBER 7, 2011

Grain Marketing and Farm Finance Farm profile

Integration key to family farm’s success Marrying a mixed farm with a successful retail venture requires a solid handle on costs, clarity of each family member’s role in the business and a solid plan By Harry Siemens

hen BSE hit the cattle industry in 2003, it left many people wondering what to do with their cattle, especially those animals that were ready for a market that no longer existed. For the Spenst family farm south of Winkler, Man., it forced them to look for non-traditional markets. In 2005, they opened Spenst Brothers Premium Meats in Winkler, and drew on the financial principles learned on the farm to make it work. Inventory farming, having a plan to get along and make decisions, knowing costs and making sure each steps fits into the plan are all part of this mixed farm’s artillery to make it dovetail with a successful retail business. Brothers Paul and Garreth Spenst and their father Garry raise feeder cattle, crop 1,500 acres of land south of Winkler and make hay bales on 250 acres, off the beaten path north of Plum Coulee. In addition, the family also runs a multi-million dollar meat store and processing plant at Winkler, started up in 2005, as their response to the BSE disaster of 2003 that threatened to take down their feeder and grain farm.

Specific roles While all three farm together using much of the feed for the 600 and 1,200 pound heifers sent through their Winkler store, each is in charge of a specific part of the business. Garreth is the meat cutter expert, heading up that department, making sure the customer gets the best product each time. He also handles any production issues. Paul looks after the front of the store, and the dad, Garry, makes sure the animals get the best feed, care and housing back at the farm. As mentioned, the three work together and own shares in the incorporated meat store, Spenst Brothers Premium Meats, but run the farm together as individual farmers. This makes it easier to move some of the farm income around to where it’s needed most. Paul says he’s often asks how he makes working with his brother and dad work. “We get along,” says Paul, as he hauls home a load of carcasses processed at a local plant, about 60 km north of Winkler. “It’s not perfect, but we have a system for dealing with issues that arise.” He says it’s understood that the sons need to take over the business eventually, and as dad gets comfortable with a certain aspect and the boys can handle it, dad backs away. “But for now if we have an issue, we call dad,” says Paul. “We find out what dad thinks, we bounce it off each other, and make decisions together.” He gives an example where earlier this year, with business increasing significantly to at least 3,000 pounds of hamburger weekly, lifting that four times a

week to make burgers was too much for Garreth. “We decided as a group to install new lifts, to make batches of patties 200 pounds at a time, with no lifting whatsoever,” he says.

Financial mangement As every good farmer knows, it takes good financial skills and planning to make it in today’s robust but volatile farm and world economy. It isn’t every day three cattle and grain farmers start a meat processing shop, but many of the basic management principles apply whether it’s a meat shop, feedlot, grain farm or a mixture of all three.

While they have a good idea of what it costs per acre to produce a crop, at the store they know exactly what it costs them to make a pound of hamburger or sausage. The two brothers developed a software program at the store requiring 15 to 20 entries a month that gives them their costs per pound, which is extremely helpful when deli and meat product prices fluctuate significantly. The entries include the prices they pay that month for pork, what they pay the farm for hanging cuts of beef, and includes break downs for each cut. “If a sirloin tip roast sells, I know to the penny what the

Garry Spenst looks after the feeders that his family farm sends through the Spenst Brothers Premium Meats shop in Winkler, Man.

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T:17.4”

7.4”

NOVEMBER 7, 2011

grainews.ca /

Grain Marketing and Farm Finance farm gets and store gets,” says Paul. “I know the same what it costs to retail it. It’s is a fairly time consuming thing, but I can watch as our number of pounds we handle increase, our costs per pound go down, of course.” As Paul watches those numbers, it helps to make decisions for volume pricing for a big customer, whether it is worth it if they take 1,000 pounds of something every month. On the farm, he uses farmer math meaning he has a rough idea what their costs are. “If we were only farming it would be irresponsible for us not to know the exact costs,” he says. He says the money is at the store and that helps to carry the farm.

Inventory farming According to Paul, inventory farming is a concept whereby the farm can either buy fertilizer when the prices is right and store it, or buy some bin and storage

space to hold the grain until the price is right for them to sell. To do so, a farm must either be flush in cash flow, or have an off-farm income source. For the Spenst farm, the store helps them with their inventory farming, but it isn’t that simple because woven through their setup are the grain farm, cattle feedlot, and retail meat store and processing plant. “We have some big 6,400 bushel bins, so if we decide to put two bins of canola away and wait for the right price, we don’t sell that canola until it hits a certain price,” he says. “Or until we need the bin space.” He makes it clear that in their case inventory farming doesn’t work on its own because if the target falls 30 to 50 cents short of their ultimate target, they can make it up in selling the calves through the store. “Having the store gives us more cash flow capability where we’re not always having to sell,” he says. “Last year we could wait with the corn until

it peaked, selling some at $5.50 and the last load at $6.75.” Inventory farming can also work to save money on certain input costs. For example, in July 2010, the farm bought 100 tonnes of nitrogen, after watching the fertilizer prices drop. Paul had the storage so bought for $360 a tonne his 2011 requirements with some left over for 2012 for a savings of $25,000 on 100 tonnes. While farming may not be their main source of income, they still try the best they can because they love to farm, and need to produce the feed and corn silage.“The decision isn’t to determine how much the corn will cost us, but what will it take to infirm 18,000 to 20,000 tonnes of top quality corn silage,” says Paul. † Harry Siemens is a farm journalist, freelance writer, speaker and broadcaster based at Winkler, Man. Visit his website at www. siemenssays.com, or email him at harry@ siemenssays.com

He gets to know the animals by walking through each daily and treats the sick ones immediately. “If I save one animal, that is $1,000, I save five or even ten, that is $5,000 to $10,000,” says Spenst.

» CONTINUED FROM PAGE 23

when are land prices too high?

T:10”

Creek Farm, north of Westlock, says, “We found that just farming and enjoying the life, we were going broke. We had to get more land; then it started going up.” Koch says, “I think if you own a good solid base that’s basically debt free you have all kinds of leeway as far as a land purchase goes.” But he cautions, “If you’ve got payments on land already, payments that would equate to rent or better, it’s pretty hard to go out and buy something that is going to cost you $120 per acre in payments. One screw up and it’s gone.” The Kubinecs too have some words of caution. Even if a farmer thinks they can afford to pay for a piece of land, they need to assess their risk. Sometimes a land purchase can be too risky. “We don’t know what the prices will be in 15 years,” Maureen says. “It still does boil down to each individual,” Kubinec says. “Maybe you’ve had three generations of people farming behind you, and if it’s beside you, you won’t care what it costs, but if you’re a young person just starting, you have to be careful,” he says. “It could be the top of the bubble and if it breaks you’ll be in trouble.” The demand for land is not just local — it’s global. Browsing the internet I found a site encouraging the Chinese to buy Canadian farmland: http://chinalandinvestments.com.“Canada is the ideal country for investing in farmland for many reasons,” it says. (For more on non-farmer land ownership, see next month’s issue of Grainews). No one knows what will happen to land prices. If that quarter for half a million is beside yours and you have the means to purchase it, we’ll all think you’re crazy. But maybe a few years down the road we’ll wish we’d bought it. Or as one farmer said: “I would walk away if someone offered me enough.” Maybe it’s time to be the seller, not the buyer? †

11/11 - BCS11026

Marianne Stamm usually writes from Westlock, Alta., but wrote this from Switzerland where she’s spending time with family

/ grainews.ca

NOVEMBER 7, 2011

Grain Marketing and Farm Finance FARM FINANCE

Calculating your farm’s rate of return Knowing your farm’s rate or return on equity and assets is helpful in determining when to re-invest in the farm BY EARL SMITH

year ago, for this same Farm Finance issue of Grainews, I wrote an article encouraging grain farmers to update their net worth statement as soon as possible after harvest with current grain inventory, payables, receivables and so on. The idea is to get a clear snapshot of your financial position early and do a few simple financial ratio calculations in advance of heading into the planning and tax seasons of the year. Of course, you still need to do an updated net worth statement at December 31 (or at your designated year-end) for your lender and for accrual adjustments, but preparing a draft statement early in the fall is an excellent management strategy to help you stay on top of your farm’s financial position. I again encourage you to do that work on your net worth statement now (check www.grainews.ca for back issues if you need some help). In this article I will deal with another approach to determining how your farm business is performing financially and that is calculating the return on assets (ROA) and return on equity (ROE) of the farm. I find the rate of return numbers very interesting as they are easily compared to other industries and to opportunities other than

the farm where you could invest your money such as a savings account, GICs, stock markets or other business investments. Given the current financial turmoil in the world and low rates of return to many investments, we intuitively know that it’s not too hard these days for the rates of return to farming to be better, but that has not always been the case. As business managers considering future investment and re-investment in their farm businesses, I think farmers could benefit from knowing their own rate of return performance.

PRELIMINARY CALCULATIONS In order to calculate these rates of returns you need to do a couple of other calculations first: the “Value of Production” and “Net Income.” These can be calculated from your yearend accounting statements or accountant-prepared statements for any year or from your farm accounting records now for the current year (assuming they are up-to-date). To do these calculations now you also need to have your net worth statement updated, as mentioned above, with current inventories, payables and receivables as well as an estimate of any direct costs (expenses) expected between now and your year end. To keep things simpler here I am going to assume the farm is a straight grain operation.

Many will recognize that the VoP calculation (at right) is simply getting to an accrual based gross income number as the year-over-year change in inventory and accounts receivable can each be either a positive or negative number and are the accrual adjustments to cash income.

RETURN ON ASSETS In any business, returns can be attributed to both the money invested in the business by the owners and the work that is “invested” in but not paid for by the business. That explains the theory of subtracting unpaid family labour in the formula but I seriously hope that in your farm business you are paying a reasonable amount to yourself and your family and that expense is already in your Net Income calculation. As an example, using this formula (see above right), a $200,000 net income for a farm with $2.5 million equity would represent a ROE of eight per cent. For comparison purposes, I referred to David Kohl’s benchmarks for a farm’s ROE. These are: over seven per cent is good (green light), four per cent to seven per cent is cautionary (yellow light) and under four per cent is cause for concern (red light). In the ROA formula above, interest is added back to net income as it is considered the return to

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VALUE OF PRODUCTION (VOP) IS CALCULATED AS FOLLOWS: VoP = Farm Cash Receipts + (Year Over Year Change in Value of Inventory + Year over Year Change in Accounts Receivable) THE NET INCOME (NI) CALCULATION IS: NI = VoP - Direct expenses - Capital Costs This calculation then gets us to a return number to use in the rate of return calculations. Return on Equity (ROE) can then be calculated simply as follows: ROE (%) = (NI – Unpaid Family Labour) X 100 Total Equity (Net Worth) THE RETURN ON ASSETS (ROA) IS CALCULATED BASED ON THE FOLLOWING FORMULA: ROA = (Net Income + Interest – Unpaid Family Labour) Total Value of Assets your lenders money in the farm and therefore part of the return on assets. Using the same example as above, if the farm’s net income plus interest was $290,000 and the value of the assets was $4 million, the ROA would be 6.4 per cent. Kohl’s benchmarks for ROA are: greater than five per cent is considered good/green, one to five per cent is cautionary/yellow and under one per cent is cause for concern/red.

PUTTING THE RATIOS TO WORK I mentioned above that one way to use your rates of return figures, especially ROE is for comparison to other investment opportunities. Another is to compare the farm to itself in other years by charting the trend of ROE and ROA over a number of years, analyzing that trend and trying to explain any change in the trend or years that deviate from the trend line. Another interesting insight from these return calculations is to compare the ROA you are achieving to the interest rate

on borrowed money available to your farm. If your return on assets is higher than the borrowing rate it should theoretically mean you could borrow to acquire additional assets and, assuming you maintain the same ROA, achieve a return above the cost of the borrowed money. The caution of course is that this is only an interesting insight and not enough analysis to make a borrowing decision on. A final word of caution: these rates of return calculations, and many other common financial ratios for that matter, are very dependent on the value you place on the assets on your net worth statement. Try to be as realistic as possible when valuing your land, buildings and equipment assets. I hope you can get some time this winter to warm up your calculator and crunch some of these numbers for your farm but I also hope you can enjoy some time off this winter and maybe some sunny southern sun! † Earl Smith is vice-president and co-founder of groPartners Inc., a western Canadian farm and land management company. Contact Earl at 403-586-2504 or earlsmith@gropartners. com with questions or comments

New Horizons Pulse Days 2012 January 9 & 10, Saskatoon, SK

Join us for new outlooks on: • Pea and lentil markets • New market opportunities • Crop management practices • Green initiatives Space is limited. Register now to reserve your spot and save 50% on registration: $25 (SK residents), $50 (non-SK residents). To register or for more information call 306-668-0350 or visit www.saskpulse.com/producer.

For more information and to register, visit the Manitoba Agronomists Conference website: http://www.umanitoba.ca/afs/agronomists_conf Certified Crop Advisor credits available

NOVEMBER 7, 2011

grainews.ca /

Grain Marketing and Farm Finance GRAIN MARKETING

Five tips for effective wheat marketing Managing the overwhelming amount of information out there and selling in stages are just two ways to make more money (or manage risk) on wheat sales BY JIM BAGSHAW

he global demand for wheat is expected to double over the next forty years. As Canadian wheat growers look for ways to grow more with less, they will also be seeking to manage through market volatility by marketing their crop as effectively as possible. Wheat is a crop under economic pressure, globally, according to Norm Dreger, head of cereals for Syngenta North America. There are several challenges with growing wheat today — low yield growth, low intensity acres, quality issues and low farmer profitability. Around the world, wheat is being displaced by more profitable crops and is being grown on more marginal acres. These dynamics all have a direct effect on global production and market prices. And while it would seem that increased access to information would make marketing a wheat crop easier, in fact, the reverse may be true. According to John DePutter, president of DePutter Publishing, a firm that specializes in agriculture market news and analysis, despite a virtual explosion in the number of media services that provide everything from the latest local weather forecast to crop conditions halfway around the world, many growers find it increasingly difficult to get the information they truly need to make the right decisions. To help farmers market grain more effectively, DePutter offers these five tips:

PRIORITIZE AND MANAGE INFORMATION There isn’t a need for more information: successful grain marketing relies on making better use of the information that’s already on hand. “You need to get rid of some of the noise and minimize your time spent surfing the Internet, reading the newspaper or catching the early morning television reports,” DePutter says. “The fact is, you have to make decisions constantly and it’s hard to make those choices with a barrage of confusing and conflicting news and opinions coming at you from multiple sources. Managing the glut of information these days is akin to separating the wheat from the chaff.”

SELL INCREMENTALLY For the work that his company does with its various clients across Canada, DePutter advises incremental sales during rallies, while avoiding dips. “If we think the long-term trend is up, we might advise clients to contract only small amounts of crop before harvest and weight our incremental sales advisories to the latter part of the marketing year. If we think the long-term trend is down, we might recommend contracting more aggressively while saving smaller portions of the crop for later in the marketing year. Either way, the idea is to spread sales out over the marketing year and to make them in several increments — usually four to six.”

The benefits of incremental selling are that it can prove to be low-risk, cash-flow friendly and easy on the nerves. And, in the event you erred by selling some crop near the year’s lows, it’ll be just one increment and likely no huge loss.

TAKE A CONTRARY OPINION APPROACH DePutter says that if you notice most farmers are bullish, the news seems bullish, media reports are talking up higher prices and speculators are buying, consider making an incremental sale during the bullish hype. “It’s during widespread optimism that markets often tend to

notch important peaks,” he says. “The goal is to make your own personal selling decisions calmly and coolly, to make them partly based on the profitability of your business, and to avoid getting mesmerized by the bullish enthusiasm of the crowds. This is easier said than done.”

LOOK AT THE CHARTS REGULARLY You don’t have to look at commodity price charts daily to get a good visual image of where prices have been and where they are currently, but checking them weekly, for example, can be useful. Charts provide a simple, visual pictorial of market action and recurring

patterns, offering an uncomplicated perspective. “Maybe you’ll notice, for example, that a market is trading at the high end of its range for the marketing year to-date, so you’ll decide it’s a good time to make an incremental sale, if only for that singular reason. Another time, you might notice that a market is in a strong uptrend showing no sign of shifting, so you might conclude you can be patient before selling more.”

RECOGNIZE THE TONE OF THE MARKET According to DePutter, one of the best indicators of commodity futures market direction is “tone.” “A market that fails to fall despite

widespread and highly publicized bearish news has a bullish tone and the potential to move higher,” he says. Similarly, a market that fails to rally despite widespread and highly publicized bullish news has a bearish tone and the potential to move lower. So what does the future hold for wheat production, and the return wheat can deliver to growers? Dreger is optimistic, stating that, “Relative to other crops, wheat technology is in its infancy. This creates an opportunity to transform wheat production through innovation, reaching for new standards in yield, quality and sustainability — all of which will benefit growers.” † Jim Bagshaw is product lead cereals for Syngenta Canada

Sclerotinia the hard way. Sclerotinia is a costly disease for canola growers. Provincial disease surveys* indicate that 82% of prairie acres are affected by it. Losses can easily top $30 per acre... almost $5000 per quarter section. Spraying to control sclerotinia is expensive and uncertain because it depends on critical timing.

Or the easy way. There’s a simple, certain and effective way to limit these losses. Plant canola seed with the Pioneer Protector® Sclerotinia trait. It puts your first line of defense against this costly disease right into the seed, to protect your yield potential through to harvest. Control sclerotinia the easy way: Pioneer Protector.

www.pioneer.com *Average number based on 88% affected in Manitoba, 91% in Saskatchewan and 64% in Alberta. Results from the Provincial Disease Surveys, 2010. Field results show that Pioneer Protector ® Sclerotinia resistance can reduce the incidence of sclerotinia in a canola crop by over 50%. Individual results may vary. Depending on environmental and agronomic conditions, growers planting Pioneer Protector Sclerotinia resistant hybrids may still require a fungicide application to manage sclerotinia in their crop. All purchases are subject to the terms of labelling and purchase documents. ®, TM, SM Trademarks and service marks licensed to Pioneer Hi-Bred Limited. © 2011 PHL. PR2045_PRscl_GN_F_E

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NOVEMBER 7, 2011

Grain Marketing and Farm Finance GRAIN MARKETING

How to use storage as a marketing strategy A certain amount of storage is necessary, but any potential upswing in the market must cover capital costs, interest costs and storage losses BY NEIL BLUE

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eciding how long to store grain depends on grain condition, cash flow needs, storage charges, interest rates, price level, basis levels, your market outlook, and delivery opportunities, just to name a few. Storage is profitable if prices rise enough during the storage period to cover storage and interest costs. The first consideration is storability of the grain. Representative samples should be taken of grain as it is binned, and the moisture and temperature of these samples should be recorded. By doing so, a base is established for monitoring temperature and moisture of each bin of stored grain. As most farmers know, the higher the grain temperature and moisture level when binned, the greater the risk of mold, heating and insect infestation. Also, temperature (and moisture) migration occurs in the bin as outside temperatures change. Many farmers now use aeration and monitoring systems to assist in safe grain storage. If significant downgrading or volume losses are expected because of a less than ideal storage set up, you may be better off taking a lower price and moving the grain than risking major spoilage or quality downgrades. A second consideration is cash flow needs. There are four main sources of cash inflow: income from farm operations, capital sales, borrowings, and other (including personal) income. Similarly, there are four main areas of cash outflow: farm expenses, capital purchases, principal repaid on loans, and nonfarm expenses (including personal living costs). One alternative to selling physical grain is to use the Advance Payments Program (i.e., borrow against the stored grain). Through this program, farmers are eligible to receive an advance on stored grain up to $400,000, with the first $100,000 being interest free. Borrowing against the stored grain is a way to bring in cash flow while postponing the actual grain sale for whatever reason (e.g., too busy now, limited delivery opportunity, expect the grain price to be higher later). Of note is that the advance is considered a loan against the grain, and is not taxable income until the grain is sold. Unless a farmer is paying for storage in a commercial facility, the storage cost is usually limited to the investment cost and depreciation on the farmer’s own bins and related storage equipment. This physical storage cost is typically 10 to 30 cents per bushel a year, depending on the facilities. A more significant cost can be the interest cost of storing grain, and this will vary by individual farmer circumstance. Generally, the interest rate used is the “opportunity cost of money” for that farmer. This is either the highest interest rate on any loan outstanding or, if debt-free, the highest return that could be obtained from a low or no

risk investment. For example, if canola is worth $12/bu., a farmer with outstanding trade account debt accruing interest at two per cent per month would have an interest cost of storing that canola of 24 cents/bushel/ month or about $1.50/bu. in just six months. In other words, with a price of $12/bu. now, and with that trade account outstanding, this farmer would need about $13.50/bu. six months later to justify the interest cost. Another farmer who has no debt, and with the current low rates on savings, may only need 10 cents a bushel higher price to cover the interest costs of storing $12/bu canola for the six months. In both cases, use of at least the interest free portion of the Advance Payments Program would make financial sense. Usually, harvest-time grain price bids are relatively low. There is typically an abundance of supply and less commercial grain storage than several years ago. Because grain buyers do not have difficulty attracting product at harvest, they do not have to bid aggressively. For products like canola with an actively trading futures market, the harvest-time basis, or discount below the futures price, is often relatively weak. The market signal during these weak price and weak basis conditions is to store, and wait for a stronger price and/or a stronger basis. I recommend following markets using more than one information source. With that market information and, with attention to your costs of production, profit level and cash flow needs, sell in stages into a rising market rather than try to pick the market top. Nobody knows when the market will peak, and therefore one should not be discouraged because prices move higher after a sales decision. Some farmers create written marketing plans, which break the marketing of their crops into portions. For each portion to be marketed, each marketing alternative available for that crop would be considered. The plan would include decisions on each crop, incorporating timing of cash flow needs, what proportion of the crop to target at various prices, timing of those targets, and reasons for the price expectations. This way, it is much easier to periodically review and reconsider the plan. Not only is it easier to refer to a written plan than one in thought only, but it is more difficult to change the plan on a whim as markets fluctuate. Storing grain to some extent is necessary. Storing grain as a marketing strategy can be very profitable, but knowing about the programs and pricing alternatives for each grain is necessary to make informed marketing decisions. For those grains with a futures and options market, there are additional pricing alternatives that will be addressed in other articles this winter. † Neil Blue writes from Vermillion, Alta. Contact him at 780-853-6929

NOVEMBER 7, 2011

grainews.ca /

Machinery & Shop NEW EQUIPMENT

Case IH and Deere introduce updated utility tractors Both Case IH and John Deere rejigged their utility tractor lines for 2012. Here’s a look at how they stack up SCOTT GARVEY

ohn Deere introduced its full 2012 machinery lineup at a dealer convention in Indianapolis, Indiana, in late August. A week later, Case IH chose to debut its new equipment at the U.S. Farm Progress Show at Decatur, Illinois. While they chose different ways and locations to hold their product launches, the two events had a few things in common. For one, both companies announced they’ve ramped up the specifications on one or two of their tractor lines that fall into the utility category, which means Case IH’s Maxxums got a makeover, as did Deere’s 5E Limited and 5M models. Here’s a look at what those tractors have turned into for the new model year.

THE NEW MAXXUMS With six models ranging from 90 to 120 PTO horsepower, the Maxxum line is at the very top end of the utility tractor scale. And with the introduction of the “MultiController” version to this line, the Maxxum gets a grownup cab interior to match its bigger brothers. Of course you can still opt for a “Value” model Maxxum tractor with simpler (read: cheaper) features, if you want. But if you’re willing to spring for the extras, you’ll probably like what you get. The design team at Case IH say they used extensive customer input when deciding on a standardized control console arrangement for its product lines. That design debuted on the new Steigers and Magnums, which were introduced last year. Now, buyers of the smaller Maxxums get the benefit of that enhanced control layout if they upgrade to the MultiController option, which also includes an optional electro-hydraulic joystick control for front-end loaders. “The Case IH Maxxum tractor now joins the larger Puma, Magnum and Steiger Series trac-

PHOTO: CASE IH

John Deere gave its 5M (pictured here) and its 5E Limited tractors improved cab layouts and higher-end specifications for 2012. tors with the latest in Case IH operator control technology,” says Dave Bogan, Maxxum marketing manager. This allows the Maxxum tractor to offer the same ease of operation that the larger Case IH tractors have today — making it easy for operators to move from one tractor to another.”

have a spunky, 25-horsepower power boost under load and achieve standard PTO operating speed at relatively low r.p.m.s for improved fuel efficiency. “SCR technology not only meets these (IT4) emissions standards, but also improves fuel economy and overall engine performance,

These new models deliver more power while meeting new emissions standards Tractors equipped with the optional MultiController feature also get a pressure sensitive touchpad to control functions such as hitch position and Auto PTO. The associated instrument cluster then gets positioned near the operator’s natural line of sight on the cab’s right-side A pillar. Under the hood, the Maxxums use 4.5 litre, four-cylinder or 6.7 litre, six-cylinder Interim Tier IV-compliant diesels, which rely on the same selective catalytic reduction (SCR) emissions technology as all the other Case IH equipment lines. These engines

which makes these multi-purpose tractors an even better asset on the farm,” says Bogan. “SCR allows us to bring in cool, clean intake air, which lets the engine perform at its best.” Naturally, product reps from John Deere beg to differ with that statement, because green machines use cooled EGR for emissions reduction instead. The marketing battle between those two technologies continues to rage. Hydraulic flow rate on the MultiController versions gets boosted up to 100 L.P.M., compared to the standard 70 on the

lower-rent base models. That makes for relatively impressive performance when compared to other utility tractors on the market. That flow comes from an open-centre pump, though.

5E LIMTED AND 5M JOHN DEERES In the John Deere camp, specifications on its two utility tractor lines, the 5E Limited and 5M, grew as well. Together, tractors in these lines now offer increased horsepower options, ranging from 65 to 115; but those are engine, not PTO, ratings, so they top out a little sooner than the Maxxums. The three models in the 5E Limited line get a better control arrangement in their cabs, with easier-to-reach hitch, hydraulic and PTO controls mounted higher up on the right side. It’s a much better placement than the previous design. The hydraulic system in this line also gets an upgrade and now includes up to three SCVs. “In addition to the cab, we’ve redesigned the transmissions and added oil-cooled, self-adjusting wet traction and PTO clutches,” says Matt Blaylock, product marketing manager for 5 Series tractors. “These tractors now have

more heavy-duty components, as well as increased hydraulic functionality, comfort and convenience options.” In the 5M line, Deere focused on the three largest models for a makeover. These three tractors now ride on a five-inch longer wheelbase, get 25 per cent more hitch lift capacity and electronic engine control with common-rail fuel injection. Fuel tank capacity grows, too. They also get an economy PTO and the same heavyduty transmission upgrades as the 5E Limited. The 5M cabs move upscale, too, with features like satellite radio and Bluetooth connectivity. “The 5M deluxe cab is designed to keep customers in touch with the rest of the world, such as allowing them to make hands-free phone calls,” adds Blaylock. “This cab is for those people who don’t want to settle for less than the premium comfort features like those found in many automobiles today.” If you get behind the wheel of a new Maxxum or 5 Series and all their new high-end features leave you wondering if you’re driving a tractor or a BMW, just look at the speedometer—that’ll remind you! † Scott Garvey is machinery editor for Grainews. Contact him at scott.garvey@fbcpublishing.com

PHOTO: JOHN DEERE

Opting for the MultiController option on Case IH’s new Maxxum tractors gets you the same right-hand control console found on the larger Magnum and Steiger tractors.

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NOVEMBER 7, 2011

Machinery & Shop BUYING EQUIPMENT

Three reasons for buying local used equipment The Internet makes searching for used equipment down south easy and the strong dollar makes the prices attractive, but are long-distance purchases really worth the trouble? BY SCOTT GARVEY

hen it comes to hunting for used machinery, turning to the Internet opens up a lot of opportunities. The virtual world has made machinery shopping an armchair experience. Just type in the make, model and specifications of the machine you want, and you can find almost every one currently on the market in Canada and the U.S. that matches that description. That’s because online machinery advertising websites have gained popularity with dealers who want

to show their inventories to the widest possible audience, according to spokesmen from equipment dealer associations. Because the value of the loonie compared to the U.S. greenback is better than it was a couple of years ago, checking ads from south of the border is now an alternative, too. “Because of where the U.S. dollar is today, used equipment in the U.S. is certainly priced more competitively (than it used to be),” says John Schmeiser, executive vice-president of the Canada West Equipment Dealers Association. On top of that, widespread flooding along the Mississippi River and a crippling drought in

the southern U.S., ranging from Texas to southern Kansas, has essentially killed the market for used equipment in those areas.

increasing their exposure on the web. “They’ll have to expand their (marketing) areas,” says Matthew Larsgaard, president and CEO of the North Dakota Implement Dealers Association. “Dealers, like all of us, get pretty creative when they need to move products.” And if they’re under pressure to generate sales, their asking prices may be very attractive.

Machinery shopping is an arm chair experience

TRANSPORT COSTS Dealers there are bound to be ramping up efforts to unload inventory into a wider geographic area. That almost certainly means

But if you end up making a long-distance purchase, what are you up against? There will be additional costs.

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Transporting machines across several hundred miles won’t be cheap. Even with bargainbasement pricing, simply paying the cost of getting your purchase home from as far away as Texas could be a deal breaker. And, depending on the type of machine you’re looking for, it could be spec’d out a lot differently than what is ideal for your needs. Different crops, soil and climate conditions demand different options on tractors and combines. For example, tire type and size may be significantly different on southern U.S. tractors. Something as simple as swapping a set of R2, wet-condition, rice tires off a tractor for new dryland R1 types will add thousands to the purchase cost. That may be one of the facts helping dampen enthusiasm for long-distance sales agreements. Despite the increased buying power of the Canadian dollar, there hasn’t exactly been a flood of northbound farm equipment. Nor has there been a lot of Canadian machines going to U.S. customers lately, according to Schmeiser.

SHOP EASY AT HOME If you’re looking for something specific that you can’t find anywhere else or you can make the economics pencil out by looking in northern states, going shopping in the U.S. remains an option, at least while our dollar remains near or above parity (which may not last long, according to economists). Jim Moodie, who owns of a chain of six John Deere dealerships in Montana, says although his business has seen sales to Canadian customers increase recently, the rise has been modest. “It’s up some, related to the money exchange,” he says. “We see more traffic on the used fourwheel drive tractors and combines.” Farming conditions in that part of the U.S. are comparable to ours, so most equipment there will be well suited for Prairie farms. Larsgaard says sales into Canada isn’t a topic he’s discussed with his member dealers in North Dakota. Clearly, it’s not a particularly hot topic there, either. When it comes to buying new BY DAN PIRARO

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Machinery & Shop equipment, going south isn’t really an option at all. Major manufacturers strongly discourage cross-border shopping for new machines in a variety of ways. That practise isn’t restricted to farm machinery builders; automakers have been preventing widespread use of that tactic in their industry for decades. As an example of what manufacturers are doing to limit it, at least one equipment brand won’t allow any buying incentives to be applied to sales of new machines bought in the U.S. for export to Canada. It’s also difficult for U.S. dealers to stand behind machines that head north. “I really can’t warranty anything I sell (into Canada),” says Moodie. “I can’t send someone up to work on it.” That would be a violation of Canadian Immigration regulations. He doesn’t think it would be cheaper for Canadians to buy new equipment from a U.S. dealer, anyway. “Pricing should be competitive,” he adds.

purchase develops a problem soon after it arrives on the farm. That isn’t always practical with a longdistance deal. Even if that far-away dealer provided the same parts discount, just picking them up may be impractical. And, of course, dealing with someone you know and trust can remove some of the risk in making a business deal. If you decide to stick with a local retailer, it’s still a good idea to search the listings for similar equipment on the web before signing the purchase agreement. Knowing what others are asking for machines like the one you’re interested in could help you negotiate a better price. “Tools like that (Internet listings) help the customer with the buying process,” says Schmeiser. “Not only with sourcing used equipment, but helping them establish the value of the current equipment they have and want to use for a trade in.” † Scott Garvey is machinery editor for Grainews. Contact him at scott.garvey@fbcpublishing.com

Launched in August, John Deere’s Machine finder Mobile website, available at www.machinefinder.com, is designed for access using smart phones and tablets. It allows anyone to search Deere dealers’ used equipment inventories. It offers advanced filtering search options, and it will use your phone’s location to give you a listing of what’s nearest to you.

Service constraints In most cases Canadian farmers shouldn’t need to dig out their passports in order to find exactly the right machine for their needs. The rise in the number of multi-store dealerships across the Prairies means there is now an enormous amount of equipment available directly through local outlets. Salesmen at one branch can access inventory from all locations in their retail chain. A listing of all of it is bound to be available on company websites. So, you can check it from your home computer. “That’s one of the advantages of a multi-store operation,” says Schmeiser. “Your access to inventory, both parts and whole goods, certainly increases when you walk into a multi-store operation. It’s very easy for a (local) salesman to track inventory (at all outlets), and the customer can negotiate with that salesman as if the machine is sitting on the lot.” That can greatly simplify the whole buying process. He adds that as a rule of thumb, there is usually good sense in sticking with a local dealer whenever possible. “The one thing we never get away from is this is a sales and service business. No matter where the customer buys something from, you’re going to need someone to work on it.” Even with a used machine, a local dealer may provide a limited warranty of sorts to keep you coming back as a customer, possibly something as simple as a reduced rate on replacement parts if a new By Dan Piraro

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NOVEMBER 7, 2011

Machinery & Shop CLASSIC MACHINERY

Reminiscing about Roto-Thresh combines A farmer who owned a pair of rare Roto-Thresh combines — which were built in Saskatoon during the 1970s — discusses their performance and why he liked them SCOTT GARVEY

W PHOTO: MERVIN LLOYD

Mervin Lloyd stands in front of two derelict Western Roto-Thresh combines that he once used to harvest grain on his family’s farm near Fiske, Sask. He and his uncle purchased three of the roughly 50 machines the company built during its short time in operation.

estern Roto-Thresh isn’t exactly a household name among farmers anymore. In fact, it never really was. The Saskatoon-based combine manufacturer had a relatively shortlived existence during the 1970s, but it managed to become a pioneer with its innovative harvesting technology, nevertheless. Its

machines used a large-diameter, longitudinally mounted, axial separating drum for the final threshing stage rather than straw walkers, which were the industry standard at the time. The small Saskatchewan company faced an uphill battle when it came to winning market share; it had to compete with the major combine manufacturers and try to convince farmers to adopt an unconventional technology at the

same time. Still, it did manage to sell a number of its machines, which had a box-like shape, much like today’s rotary models. Mervin Lloyd, who farms near Fiske, Sask., was one of those who saw merit in the Roto-Thresh concept. He liked the design and performance of the combines so much he bought two of them, and he spoke with Grainews about his recollections of using them on his family’s farm. His uncle, who farmed nearby, also bought one. “I ordered it (the first RotoThresh) for delivery in 1975, but they didn’t get it done until 1976,” says Lloyd. “After they quit manufacturing them, I bought a second one. (At that time) they were selling them rather reasonable. About $15,000, I think.” That fire-sale price made the second combine a bargain, but buying another new machine from a company that was closing out meant he needed to stockpile some spare parts. “When they were shutting down, I went and bought a truckload of parts,” he says. That on-farm store of replacement components allowed him to keep his RotoThresh combines going for many years after the company folded. According to information supplied by the Western Development Museum, in the 1960s a pair of Manitoba farmers developed the basic centrifugal threshing design on which the Roto-Thresh was based. The Western Roto-Thresh company was formed in Saskatoon a few years later. Staff at the Department of Agricultural Engineering at the University of Saskatchewan also became involved with the company by participating in testing the performance of newly-built prototype combines. The first production machine built by the company was sold in April 1973 to a St. Denisarea farmer. “If you boiled the whole story down, their big drum was the way they advertised the combines separated grain,” says Lloyd. “But that was their weak point.” He believes that to produce a future model with significantly more capacity would have been impractical, because it would have required an enormous separating drum. The production BY DAN PIRARO

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Machinery & Shop models already required a corrugated drum 66 inches in diameter and 108 inches long. Incorporating that under the sheet metal gave the body of the Roto-Thresh its distinctive “boxy” shape. Although the primary threshing system relied on a conventional cylinder like other combines, the large drum replacing the straw walkers used centrifugal force to separate remaining kernels from the straw. A smalldiametre “stripper” auger inside it lifted the material away from the drum surface and created a pulsing action, which increased the separating force. Kernels then dropped down onto collection augers below the drum. Company literature claimed this method of separation allowed the Rotothresh to perform as well on hillsides as it did on flat land. Lloyd remembers the combines were capable of putting a very clean sample of grain in the tank. He notes that was due to the unique design of the cleaning system, which used two aspirator fans to remove chaff at the front of the cleaning shoe. “You had fans blowing air that exhausted on both sides,” he says. “That really cleaned it (dockage) out. That aspirator was the best part.” Even if the drum separator concept had development limitations, Lloyd credits the Roto-Thresh production machines with having one of the highest capacities of any combine on the market at that time. “It would thresh grain at a high rate of speed,” he says.

PHOTOS: RAY BIANCHI

The “boxy” appearance of the RotoThresh combines was unusual for the time, compared to the shape of the conventional models major manufacturers were building.

Mervin Lloyd says his two Roto-Thresh combines had a higher capacity than those competing brands were offering at the time.

“As long as you were within your capacity limit, you could do really, really well with it.” According to a performance evaluation report on the Roto-Thresh published by PAMI (The Prairie Agricultural Machinery Institute), the combine they tested in 1977 managed to harvest 11.1 tonnes per hour at a ground speed of 5.8 km/h in a crop of Neepawa wheat. PAMI conducted tests on the Rotothresh design over two seasons, 1976 and 1977. Lloyd also liked how thrifty the Caterpillar engine was when it came to fuel consumption. “It would never burn more than three or 3-1/2 gallons per hour,” he recalls. “It had a 50 gallon tank and

I never burned more than a tankful in a day, and I put in some 16-hour days.” Although, the model PAMI tested with a later-model 3408 engine didn’t perform nearly as well in that department, averaging about double the fuel consumption rate of Lloyd’s machines. Roto-Thresh combines also handled well, he recalls. “It was a pleasure to drive. You were dead comfortable in that cab.” The PAMI report agrees: “The evaporative cooling system maintained an acceptable cab temperature in hot weather,” it reads. Furthermore, “The steering system was excellent for field operation.” The company continued with efforts to refine the combine’s

“We HaVe

design after commercial production began. Lloyd was one of the farmers who allowed company engineers to use his farm to conduct tests on potential design changes. “Before I bought a second one, they brought a machine out and tried a few experiments with it,” he says. The different threshing characteristics of these combines required some getting used to. Operators had to spend some time learning how to adjust them to ensure the machines performed up to their potential. “There was a lot of learning and adjusting, trying different settings with it,” says Lloyd. In the end, though, the production run of Roto-Thresh combines was limited to only about

50 machines. The list price for one in 1977 was $51,900, according to the PAMI report. That included a 10-1/2-foot Melroe pickup, straw chopper and spare parts kit. Using the Bank of Canada’s online inflation calculator, that works out to about $187,400 in today’s dollars. Investing that much money in a combine from a manufacturer without a dealer network and that used an unfamiliar design required a significant leap of faith from farmers. Small wonder not many were willing to make the jump. † Scott Garvey is machinery editor for Grainews. Is there an old piece of machinery you’d like featured in Grainews? Email Scott at scott. garvey@fbcpublishing.com

Chris Gross, riverbend Farms, Waldheim, sK, owns three M150 Windrowers with three d60 draper headers and an A40-d Auger header

“We’re seeing huge productivity gains with our M150s, both in

cutting our wheat, barley and canola as well as our hay crops. In fact, the A40-D header lets us cut pretty much 24 hours a day, even under really tough crop conditions. Because of these machines, we have much more time for other work on the farm.” MacDon owners are talking… read and watch what they are saying. Visit Producers Corner and MacDon TV at macdon.com. (204) 885-5590

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NOVEMBER 7, 2011

Machinery & Shop DIY fix

How to repair your windshield We put Permatex’s home windshield repair kit to the test and evaluate the results. Here’s how it turned out By Scott Garvey

O photos: scott garvey

Permatex’s do-it-yourself windshield repair kit is available for about $15. It contains everything necessary to repair stone chips.

ne of the biggest headaches with traveling on gravel roads is that those roads are hard on windshields. Getting stone chips repaired before they turn into full-blown cracks is important and should save you money in the long run. Having a glass repair shop do the work will cost

between $35 and $40, unless you have the extra glass insurance coverage (check with your insurance broker for details). Permatex offers a do-it-yourself kit that it claims will take care of those chips. But how good is it? We tried one to find out. Here’s a look at our repair effort from start to finish. First, the kit cost $14.99 plus taxes, so it set us back less than

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half the cost of an in-shop repair. That makes for a good start. To get ready to do the work, the kit comes with a complete and detailed instruction page, which is pretty thorough. For all you visual learners out there, go to www.permatex.com, to watch a short video clip showing the complete process from start to finish. Watching this video once or twice is the best way to prime yourself before starting. The test truck had to be placed inside a shop to keep it out of direct sunlight and the temperature had to be within 10 to 25 C which meant the job had to be canceled once because it was a hot day. That was a little inconvenient. Conditions have to be just right. At this time of year, a heated shop will do the trick. The kit contains everything necessary to do the work, however, giving the windshield a heavy duty cleaning ahead of time is a good idea.

How to fix stone chips

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The process is pretty simple. Start by cleaning any loose fragments out of the chip with the supplied tack. Wipe the area with an alcohol swab, then attach the self-adhesive mounting base for the syringe. Pour the resin into the mounting base and use the syringe to suck any air bubbles out, allowing the resin to penetrate into all areas of the chip. Then a little reverse pressure forces the resin into those spaces. After waiting about 20 minutes for the resin to penetrate, remove the syringe and the adhesive mounting patch. Finally, apply the remaining resin to the top of the chip and cover it with the supplied plastic patch. Back the vehicle out of the shop and park it in direct sunlight for fifteen minutes. After the top coat of resin has set up, remove the plastic and scrape off any excess, dried resin. (Too chilly out? Borrow a blowdryer and heat it up that way, but only to warm it and dry it, not to heat it up red hot.) By Dan Piraro

Bizarro

NOVEMBER 7, 2011

grainews.ca /

Machinery & Shop New equipment

Before the repair. The Permatex kit is capable of repairing chips up to one inch in diameter. At just under an inch at its widest point, this one was large enough to be a good test but well within the kit’s maximum capability. A final wipe with the alcohol swab and the job is done. The instructions caution the chip may not fully disappear after being repaired with the kit, but it likely won’t even when a professional shop does the work. In our test, the chip remained visible; but the resin filled most of it.

How did it work? The instructions are very detailed and easy to follow, but it’s a real advantage to see the full process by watching the online video. The process is very simple, but allow ample time for it. You’ll spend more time waiting than actually doing anything. At less than half the cost of having the work done in a commercial shop, there is good value for the money, but you have to pick a suitable day with the right temperature and conditions, which means this really is a much easier or faster job in the summer. On the plus side, I didn’t have to drop my truck off for an afternoon while someone else did the work. Is the result as good as a professional repair? It’s hard to say. Every chip is unique. This chip was far from invisible when the job was finished, but it seems to be repaired well enough to prevent the chip from spreading,. That means the windshield was saved, and the chip is now just a slight blemish. Not bad for a $15 investment. And, maybe best of all, you get the satisfaction of having done it all yourself. † Scott Garvey is machinery editor for Grainews. Contact him at scott.garvey@fbcpublishing.com

By Dan Piraro

Bizarro

A plastic syringe pulls air bubbles out of the cracks The final result. The chip is far from invisible after the repair, but the kit did turn it into just a slight blemish. and forces resin back into them.

/ grainews.ca

NOVEMBER 7, 2011

Machinery & Shop NEW EQUIPMENT

Redesigned baler increases bale density Hesston, by Massey Ferguson, introduced the new 2170XD that features a 30 per cent bale density increase to reduce transportation costs

mong the 15 new products introduced by AGCO for 2012 at its Kansas City dealer convention in August was an entirely new large square baler, wearing the company’s Hesston by Massey Ferguson brand name. The 2170XD is a major redesign based on the original, standard 2170 model. The changes incorporated into the XD version allow it to form bales that are 15 per cent denser. When compared to 2170 models built prior to 2010, the XD’s bales are now 30 per cent denser. In order to safely jam that much extra material into the bale chamber, engineers have had to give the XD some serious upgrades. “From the outside, you can’t tell the difference (from a standard 2170),” says Dean Morrell, product marketing manager for AGCO Forage. “But we’ve changed the driveline all the way through the baler, from the PTO all the way back to the gearbox.” That extra strength is necessary to put through a heavier 3x4-foot bale up to nine feet in length.

PHOTOS: AGCO

2170XD: One of the 15 new products introduced by AGCO this year is the 2170XD Hesston by Massey Ferguson large, square baler. It builds a bale that is 15 per cent more dense than the current standard 2170 model. Among the upgrades is a redesigned, 1,100-pound, flywheel that is 91 per cent heavier. It takes something that size to generate enough innertia to keep the mechanism turning smoothly, while forcing

more density into the bales. The gearbox is also heavier and stronger than the one used in the standard 2170, using all-new components. And all primary and secondary drivelines meet the new Category

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7 standard, with heat-treated yokes at the connections. The XD’s frame also had to be reinforced to stand up to the heavier workload. The “choke” area of the chamber has also been changed in order to hold the bale longer, while the plunger compresses more material into it. But why add all this ability to create heavier, denser bales. “A lot of areas are starting to go into biomass crops and wanting more density in the bales,” explains Morrell. However, other producers will benefit from packing more material into bales, too. “Today we’re also producing a lot of cattle feed. We

wanted to make to make a compact bale to maximize shipping weight for trucks and transportation. So we decided to increase our maximum weight. Some of the straw bales you can get up to 1,200 pounds. Some guys are running up to 1,700 pounds in alfalfa,” he says. In order to ensure the baler ties a knot capable of withstanding that much tensile load, AGCO has introduced a new, heavier-strength twine, which is designed specifically for the 2170XD. It’s available through AGCO dealer. † Scott Garvey is machinery editor of Grainews. Contact him at scott.garvey@fbcpublishing.com

To accomodate the extra strain on the driveline from creating heavier bales. The 2170XD uses an 1,100-pound flywheel and upgraded gearbox.

NOVEMBER 7, 2011

grainews.ca /

Cattleman’s Corner HERD MANAGEMENT

Hoof sand cracks are fact of life Some cracks can be prevented, and treatment may be necessary if lameness develops or to improve marketability of breeding stock BY HEATHER SMITH THOMAS PART 1 OF 2

oof cracks are a common occurrence in all beef cattle across Western Canada. Often they don’t cause a problem for the commercial beef herd, but in some cases they can cause lameness, and certainly for the purebred operator, it’s not a good sign to be selling breeding stock with hoof cracks. Some measure of hoof tracks can be prevented through nutrition and management, and where warranted, severe cracks can be treated rather than culling the animal. Chris Clark, associate professor of Large Animal Medicine, Western College of Veterinary Medicine (Saskatchewan) says many of the older beef cows on the Canadian Prairies are affected. “You can expect to find sand cracks on almost 25 per cent of older cows,” says Clark. “These cracks most commonly occur on the outside claw of the front foot, and the vast majority of these don’t cause any signs of lameness or ill health.” In a research project to determine causes, he says dryness is probably the biggest factor. “On the whole, I think cracks are mainly a consequence of raising cattle in certain environments,” says Clark. There are basically two types of cracks — vertical (often called sand cracks) and horizontal. Paul Greenough, professor emeritus, Western College of Veterinary

Medicine, Saskatoon, has studied hoof cracks, especially sand cracks (vertical fissures) for many years, examining feet of thousands of cattle. He says sand cracks are more common in heavy cattle than in light cattle. Size of the foot in relation to weight of the animal possibly plays a role, but there are probably several causes and contributing factors. Dry feet become brittle. “Our Prairies in summer are quite dry,” Greenough says. In sandy soils, the protective outer layer of the hoof wears off and moisture evaporates through the hoof wall. There are no simple answers. “Aberdeen Angus get very few cracks, in my experience, but when they do, unlike other breeds, the cracks are usually in heifers that are over fat. The weight of the animal pushes the foot down into the hoof and splits it from the top down.”

HORIZONTAL LINES In other cases cracks may be caused by different factors. A nutritional change or some type of stress causes the horn to stop growing for a period of time. “There are always growth rings in the hoof, but some become deep horizontal grooves,” says Greenough. “A groove means something abnormal happened to that cow, such as retained placenta, or a difficult calving, or some other stress.” As the groove grows down the claw and reaches the middle portion, pressure of the toe (as weight is placed on it) tends to bend the

claw. There’s a bit of movement there, like the instep of your shoe. “When that happens, the horn may split open at the groove, usually splitting downward from that groove,” he says. Some cracks move upward from that stress line/groove. But a deep horizontal groove may eventually split open and the part of the hoof wall farthest away from the coronary band becomes detached. “These detached fragments are called thimbles,” he says. “This area becomes very, very painful. These thimbles need to be removed, or the cow will be in constant pain and won’t walk. Then she won’t eat.”

NUTRITIONAL FACTORS “In Saskatchewan — actually from Manitoba clear across to Alberta — there’s a low level of copper in the soil,” says Greenough. “Copper deficiency can be a contributing factor in causing sand cracks because the hoof horn is not as strong. There can also be an associated zinc deficiency. Shortage of these two trace minerals can be part of the underlying problem.” In cattle, one sign of copper deficiency is a change in hair color. Black animals appear reddish. Dark-coloured animals get areas of light hair growing around the eyes. “With acute zinc deficiency, we see a skin disease, parakeratosis, which causes hair to fall out,” says Greenough. “These deficiencies are area-specific. Some regions don’t have these problems. In most herds affected with

An example of vertical hoof crack that could cause a beef animal discomfort. horizontal “hardship” grooves in the feet, it’s a result of some kind of nutritional stress such as the seasonal stress of switching between high and low fibre and high- and low-protein feeds. “In Saskatchewan we keep cattle confined in winter so they can be fed and watered and don’t ruin the pasture,” he says. “By late fall, pasture fibre levels of mature plants are extremely high. The cow comes into a paddock and is fed hay or straw and concentrate, a diet high in fibre.” In spring, cattle are turned out to grass once it is green and growing. “The lush grass has very low fibre content and very high protein content. Winter feed is low in protein and high in fibre, so when cattle go to green pasture there’s a sudden change in both protein and fibre. This change causes a reaction in the feet.” This creates a different rate of hoof growth. Another change occurs if there’s

A horizontal crack in a hoof that could lead to lameness. rain after a dry spell. “Sometimes you get very green fall pasture from new regrowth,” says Greenough. “Some hoof grooves and cracks can be associated with this change and seasonal patterns.” Cattle producers should check soils in pastures to see whether copper and zinc levels are adequate. Water should be checked for mineral levels. In some regions, high levels of iron or sulphate in the water inhibit the uptake of certain trace elements including copper and zinc. A problem with hoof cracks may be specific to any given area depending upon climate, soil and multiple other factors, including how the stockman manages his farm and cattle. There’s no one cause for hoof cracks, and overriding all of these factors is a genetic tendency. † Heather Smith Thomas ranches with her husband Lynn near Salmon, Idaho. Contact her at 208-756-2841

THE MARKETS

Cattle price outlook remains bright U.S. QUARTERLY BEER PRODUCTION (MILLION POUNDS) JERRY KLASSEN MARKET UPDATE

ed cattle in Alberta traded in the range of $107 to $111/cwt in the first half of October, up from the September highs of $104. At the same time, fed cattle in Texas sold for $119 while cattle in Nebraska moved at $119/cwt on a live basis and $189/cwt on a dressed basis. Market ready supplies are rather tight and U.S. beef production is expected to slowly drop under year ago in the final quarter of 2012. Packing margins are currently in negative territory as wholesale prices fail to make new highs. Choice product was quoted at $186/cwt in mid October, which is basically the same as a month earlier. However, select product dropped to $168/cwt which is down $7/cwt from average values in September. Looking into the winter and spring of 2012, U.S. and Canadian beef production is expected to decline while the U.S. economy recovers from recessionary type conditions this past summer. The lighter-weight feedlot place-

Quarter

2009

2010

EST 2011

EST 2012

6248

6251

6411

6150

6602

6547

6559

6330

6690

6768

6750

6420

6426

6741

6590

6125

Total

25966

26307

26310

25025

ments earlier in summer will likely result in lower marketing weights over the winter. Feeding operations appear to be very current with production and market ready supplies remain tight. Lower beef production estimates in the final quarter of 2011 and first quarter of 2012 continue to support the nearby price structure. The deferred live cattle futures, such as the April contract, have incorporated a risk premium due to the uncertainty in production. Notice that U.S. beef production for 2012 is expected to be down nearly 1.3 billion pounds in comparison to 2011. The Canadian industry continues to grind through seasonal and historically low market-ready supplies. The Canadian slaughter has improved in October but remains well behind last year. The year-todate slaughter to October 1 was

2.180 million head, down 11.4 per cent from October 1 of 2010. Canadian steer and heifer exports to the U.S. for slaughter from January 1 through September 24 were 298,043 head, down a whopping 37.6 per cent in comparison to 2010. Overall U.S. and Canadian meat demand remains strong and is expected to improve. Pork prices are also near historical highs as the hog complex moves into an expansion phase. Hog plants in the U.S. are struggling to secure nearby supplies as the weekly hog slaughter is running near record highs. U.S. consumer spending is starting to improve which should bode well for restaurant traffic over the winter. U.S. year-todate at-home food spending in has been running 12.2 per cent over 2010; away-from-home food spending is up 4.6 per cent over last year. U.S. ground beef prices

are up 18 per cent from October of 2010 while higher end cuts such as sirloin steaks are up only five per cent.

SUMMARY In conclusion, the fed cattle market is anticipating lower production in Canada and the U.S. in the final quarter of 2011 and first quarter of 2012. However, the market is rationing demand in the short term as the rise in retail beef prices has outpaced the rise in consumer spending. If wholesale prices don’t improve, it will be difficult for packers to pay higher prices for fed cattle. Over the winter, consumer confidence should improve as the U.S. economy expands. Retail spending is showing signs of growth, which is underpinning beef demand. Given the positive outlook for U.S. and Canadian economies, I wouldn’t be surprised to see Canadian fed cattle prices strengthen $8/cwt to $10/cwt from current levels, between now and April. Feeder cattle prices continue to percolate higher due to positive feedlot margins and higher fed cattle prices. U.S. feedlot placements are expected to drop under yearago levels in December through the

first quarter of 2012. Recent rains have provided temporary relief to the drought conditions in the U.S. southern plains but pasture ratings remain very low for this time of year. Winter wheat conditions in Texas, Oklahoma and Kansas will have a large effect on feedlot placements over the next two months. Western Canadian cow-calf producers have plenty of forage supplies, which has slowed the marketing pace. Alberta and Saskatchewan feedlots have lower feed costs relative to Eastern Canada and the U.S., therefore, we have seen feeder cattle in Alberta and Saskatchewan trade at a premium. Feeder cattle exports continue to run a minimal levels due to the stronger domestic demand. Barley prices have strengthened $20/mt from the harvest lows and I wouldn’t be surprised to see further upside over the winter. Southern Alberta Pfizer Gold ageverified angus cross steers averaging 528 pounds reached $161/cwt in early October. The market may add an additional $8/cwt to $10/ cwt over the next four months but I’m don’t believe additional upside can be justified given the outlook for fed cattle and barley. † Gerald Klassen analyzes cattle and hog markets in Winnipeg and also maintains an interest in the family feedlot in Southern Alberta. For comments or speaking engagements, he can be reached at jkci@mts.net or 204 287 8268

/ grainews.ca

NOVEMBER 7, 2011

Keepers & Culls BIXS is launched LEE HART

fter being talked about a few times in these pages over the past couple of years, the Canadian Cattlemen’s Association Beef Information Exchange System (BIXS) is launched and you can go to the web at http://bixs.cattle.ca for details. BIXS, which has been in development for about three years, is what might be described as a two-way highway up and down the beef production chain that can provide beef producers, cattle feeders and packers with information on the feeding and grading performance of individual cattle. And it isn’t just nice-to-know stuff, it is information that might help improve farm profitability. Even though I am not a beef producer myself, I see it as a great free, voluntary and confidential resource of particular value to producers as well as feeders and packers. By registering some basic information about your beef herd on BIXS, a producer can get information back on how those individual cattle fed and how they graded at the packing plant. That is an excellent report card on how the breeding program is working on the farm.

Going the other direction on this information-exchange highway, feeders and packers can also get information back to producers about the type of cattle they are looking for. As BIXS explains: “Let’s say a BIXS member feedlot, buyer or packer is looking for Angus-cross cattle born no earlier than March 2 that have been vaccinated with a specific product or products with a weaning weight within a specified weight range. “The BIXS member feedlot, buyer or packer must provide this query or search parameter to the BIXS program administrator along with their complete contact information. The Program Administrator analyzes the database according to the query parameters. “BIXS cow-calf participant members with cattle in their inventory matching the query specs are then supplied the contact information of that BIXS member feedlot, buyer or packer. It is then the sole discretion of the BIXS cow-calf member participant to contact the searcher. (And this is all done confidentially until any two parties agree to connect.) “Those launching a query of the BIXS database (the feeder, buyer or packer) will not have access to contact information of any cow-calf producer nor will the query participant, the searcher, be informed of the outcome of the program administrator’s analyses of the database regard-

ing the query parameters. In this way BIXS maintains producer confidentiality yet empowers the system to act as a business tool for users.” I remember doing stories over the years where beef producers formed beef clubs where the objective was to get some carcass data back on a few head through the Blue Tag Program. BIXS brings the opportunity of this production information to the masses, and it is free. The system still has to grow and mature, but it is launched.

COW-CALF ECONOMICS Jerry Klassen in his column this month mentions some Pfizer Gold calves in the 585-pound range that sold for $1.61, and I was speaking with John Calpas in Lethbridge who ran into a Pincher Creek producer who sold some 400-pound calves for $2.10, so it is obvious there is nothing but money in the beef business this year. But just in case those were just blips on the scale, there is a series of real-life cow-calf economics workshops coming up in Alberta in late November and early December. Organized through ARECA in conjunction with Alberta Beef Producers, Alberta Financial Services Corporation, ALMA, Farm Credit Canada and the Alberta government, the six day-

Write, Email or Fax Contact Cattleman’s Corner with comments, ideas or suggestions for and on stories by mail, email, phone or fax. Phone Lee Hart at 403-592-1964 Fax to 403-288-3162 Email lee@fbcpublishing.com Write to CATTLEMAN’S CORNER, 6615 Silverview Rd. N.W., Calgary, Alta. T3B 3L5 long workshops will be held in Camrose, Nov. 28; Olds, Nov. 29; Taber, Nov. 30; Grande Prairie, Dec. 5; Westlock, Dec. 6; and Bonnyville, Dec. 7. Market outlooks will be presented at each workshop. There will be a presentation on what calves are really worth from the cattle feeding perspective, a look at pasture management, insurance programs, yardage costs, and cow-calf economics software. Cost is $25. To register or for more information call 780-416-6046.

YEAR-ROUND GRAZING Steve Kenyon has a reminder about the Year Round Grazing Systems School coming up in Westlock, Alta, Nov. 25-27. It is an agricultural business management school focused on the business of ranching. It is based on a grazing system for both summer and dormant seasons but is highly focused on the management side of your ranch. The school looks into how to use a gross margin analysis and a cash flow. Steve says grazing

is only a production practice, to make a living at ranching, you need to be good at business. This school gives you some information to help your production component, but also gives you tools in human resources, economics and finances. The course includes a celldesign workshop to help with fence planning and in developing a grazing plan. It is a jam packed three days of learning and fun. Included at this school will be a tour of a winter grazing set up. Dormant season grazing and bale grazing. For $800, two members of your farm can attend the school. As a promotion, he also gives a $100 reduction to your tuition for every farm unit you bring with you to the school. For more information visit greenerpasturesranching.com or email skenyon@ greenerpasturesranching.com or phone (780) 307 2275.

Cattleman’s Corner ANIMAL HEALTH

Comparing preg-checking options BY ROY LEWIS

oth rectal palpation and ultrasounding for pregnancy have certain advantages, depending on their intended application. Both, in order to be accurate, must have a skilled veterinarian performing the pregnancy exam. Either method of preg checking has it pros and cons, and producers need to know there are a few myths that need to be dispelled.

HANDS-ON EXAM Rectal examinations have been performed by veterinarians for eons and very little has changed in this science. It is a relatively quick, cost-effective and safe procedure in the right hands. Accuracy is good in the early stages of pregnancy (30-90 days). In mid-gestation (four to seven months) it is not uncommon for veterinarians to be out two weeks to a month in their estimate. Several things account for this, which are easily explained. Gestational length still varies tremendously. I always use the example of a flush of embryos put into recipient cows. Even though genetics are identical and they are

implanted within hours of each other it is not uncommon to have the recipients calving up to one month apart. Depending on breed and sex of calf, gestations also vary greatly. The veterinarian may palpate the non-pregnant horn of the uterus giving a false underestimation of pregnancy status. The most important thing is whether the cow is open or is late. With good setups and by skilled veterinarians, hand-checking rates of up to 100 head per hour can be accomplished. A false belief that pregnancy examination causes abortions is one we still hear frequently. There is only a very slight risk in the very early stages of pregnancy (around 30 days) and skilled palpators are seldom in the rectum for more than a few seconds, minimizing any risk. We do not manipulate the fetus, as is often claimed. Rough handling and banging through the chute are more likely to cause abortions then any rectal palpations ever have. One must keep in mind abortions still normally occur in two to three per cent of cattle yearly. This has numerous causes including genetic defects, infectious causes, twinning and trauma. Proper equipment simply refers

to a good setup preferably with a palpation cage, o.b. sleeves and lube. Veterinarians always need to find a positive sign of pregnancy. This involves balloting the uterus or feeling for the presence of cotyledons. In confirming a cow open the whole reproductive tract is explored. The only cows, which are difficult to do, are extremely fat ones. Their internal fat pushes the uterus down, making it difficult to reach.

ULTRASOUND Ultrasounding requires a large capital outlay for the veterinarian and the diagnostic intent should be a lot different. Reproductive problems can be explored since you can differentiate fluid from pus and make a more definitive diagnosis. If interested in fetal sexing this (although more difficult and time consuming) can be accomplished when cows are 55-75 days pregnant. Ultrasound is very accurate in the 30- to 75-day range. It is highly inaccurate in the later stages of pregnancy. Even though external probes have recently been advertised they are highly inaccurate because of the mass of tissue to penetrate. Full bladders

are misdiagnosed as pregnancies and other pregnancies are easily missed with these machines. Veterinarians would have gladly embraced this concept since rectal palpation is really hard on shoulders and elbows. Unfortunately external probes for pregnancy on large animals are too inaccurate and way to slow. In any pregnancy examination, if accuracy of pregnant versus non-pregnant doesn’t reach 99 per cent it is inadequate. With a good internal probe (quality of ultrasounds also varies considerably) besides fetal sexing, twins can be picked up. This is something rarely found with straight rectal palpation. Again though, cows must be ultrasounded early in pregnancy for this to be accomplished. Very early embryonic deaths can be diagnosed where you have a fetus but no fetal heart beat indicating a dead fetus. Cysts on the ovaries can also be detected and easily differentiated between luteal and follicular. These cysts require a slightly different treatment regime, which your veterinarians can explain. In setting up the ultrasound screen veterinarians usually need an area somewhat shaded that is

safe for equipment placed close to the chute. The electronics especially the probe ends are subject to damage from rough handling and are extremely expensive to fix. Pictures can be printed if required for a purebred sale.

PROS ANDCONS As you can see, both forms of pregnancy examination have merit. Rectal palpation being fast and safe is commonly done in most herds. Without all the equipment being necessary it is also considerably less expensive to do than ultrasonography. Ultrasounds generally are used in problem breeders or when specialized procedures such as fetal sexing are required. Cows being sold with sexed embryos are often reconfirmed in calf by rectal palpation later in the year. Rectal palpation for pregnancy is a procedure done by up to 70 per cent of beef producers across Western Canada. Open cows even purebred ones become a liability to feed over winter. At the same time as pregnancy examination reproductive problems can be explored and cows can be condition scored. All worthwhile procedures in your farming operation. † Roy Lewis is a practising large-animal veterinarian at the Westlock Veterinary Center, north of Edmonton, AB. His main interests are bovine reproduction and herd health

BUILDING TRUST IN CANADIAN BEEF

Cattleman’s Corner

Beef’s image counts at historic Reesor Ranch

VBP fits this ranch’s direct-to-consumer marketing plan

ore than 100 years ago Scott Reesor’s great grandparents left Ontario for the beautiful rolling Cypress Hills of southwestern Saskatchewan. Today, Scott and his wife, Theresa, and their children are building on the beauty and history of their ranch with a diversified business plan. They have established a thriving guest ranch, built around an historic theme that enables them to share their heritage with visitors. They sell a small amount of beef off the ranch to guests and have expanded into selling bottled water from a spring

just thought it was a win-win for us. It gives us a chance to educate visitors about beef, on-farm food safety and to build consumer confidence as a Verified Beef Production operation,” says Theresa who is a passionate advocate for the cattle industry and their way of life. Building on VBP “People expect to eat beef At the year-round guest ranch, when they come here so it is a the Reesors have an opportunity great opportunity to talk about to connect directly with consumour beef and for them to take ers that most beef producers never some Reesor Ranch beef home,” get. VBP complements the convershe says. sations and illustrates their comVBP ambassadors mitment to livestock production. The Reesors have become a “With our combination of tourism and the cattle business, we standard bearer for the VBP program, discussing it with family, friends and neighbours. “People see the sign on the property and on our website www.reesorranch.com and ask what that means. We are always looking for good things that we can talk about and good stories in the beef industry,” says Theresa. “We get a lot of questions like ‘What’s that all about? Is that organic?’” she says. They take the time to explain how they raise their 100-150 head of cattle in a very natural setting. on their land under the Reesor Springs label. With many direct-to-consumer opportunities, the Verified Beef Production (VBP) program has become an important part of their marketing story.

took the sample records and manual home to the ranch and haven’t found much additional effort required in keeping things up-to-date. “They were all things we were doing already, it was just a matter of recording it,” says Scott. After completing their initial validation audit they were happy with the process. “It was a really good day with our auditor. We went through the checklist and covered all the food safety issues, medication, and withdrawal times in just a couple of hours,” says Theresa. Aside from reinforcing the best practices already in place, they picked up a few useful tips. Scott believes the majority of beef producers are already well versed in the Best Management Practices that are the basis of the VBP program. “They may not realize it and look at VBP as more work, but it fits within most programs.” There is real industry potential if the marketplace recognizes the additional value to consumers of having a strong VBP program, Theresa adds. “Market recognition of good stewardship practices could Industry ready encourage consumers to eat more The VBP process proved easy beef. That would add value to to adapt for the Reesors. After the producer’s business and to the completing the workshop, they industry as a whole.”

DEVELOPED BY PRODUCERS. DEVELOPED FOR CONSUMERS

One implant. That’s it. You’re done! Avoid the inconvenience and stress of re-implanting. Do it right. Do it once. ® Registered trademark of Intervet International B.V., used under license by Intervet Canada Corp. Merck Animal Health (known as MSD Animal Health outside the US and Canada), operating in Canada as Intervet Canada Corp., a subsidiary of Merck & Co., Inc., Whitehouse Station, NJ, USA. MERCK and MSD are trademarks of Merck Sharp & Dohme Corp., a subsidiary of Merck & Co., Inc., Whitehouse Station, NJ, USA. Copyright © 2011 Intervet International B.V., a subsidiary of Merck & Co., Inc., Whitehouse Station, NJ, USA. All rights reserved.

For more information, talk to your veterinarian or call our technical service at 1-866-683-7838.

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NOVEMBER 7, 2011

The Dairy Corner Dairy Corner

Insight into organic dairy production Running a certified organic operation is no walk in a pasture, but it does have its rewards BY MARIANNE STAMM

s more consumers are demanding “naturally” produced foods, several Alberta dairy producers have stepped up to the plate to convert their farms to organic. About five years ago, Alberta Milk asked farmers to consider making the switch from conventional to organic dairy farming. If they couldn’t fill the demand, the board said it would have to source milk from outside the province. Since November 2010, Albertans can now purchase organic milk from 10 farmers and three processors. Renata and Theo Feitsma, and Karl and Jane Rottier, operators from the Westlock area northwest of Edmonton, have made the switch. “We have a healthy lifestyle, and I thought it would be a shame if we didn’t take that opportunity,” says Theo Feitsma, who along with his family runs a 100-head organic dairy. Moving from conventional to organic farming is not a quick switch. Both farms produce as much of their own feed,as possible, but they must follow organic production methods on their fields for three years before the feed can be certified organic. Cows must be managed according to organic regulations for a year before the milk can be sold as such. Along with the change in production methods, there has to be a change in thinking. “You have to make up your mind that you are an organic farmer,” says Karl Rottier, who along with his family run an 80-head organic dairy. “Don’t try to use your conventional farming thinking.” The Rottiers began organic farming before the Alberta Milk Board made the call to their producers. It was a natural next step for them. They had always used less supplements, fertilizers and chemicals than most farmers.

Crops with out chemicals “The ideal organic farm is a mixed farm with cattle,” says Feitsma, who manages 500 acres, including pasture. Manure from the dairy herd is used to fertilize pasture and crops. Legume crops such as alfalfa play a dual role in helping to improve soil fertility as well as producing high-quality feed. And he has the option to silage a grain crop if weeds are taking over. Cattle and crops compliment each other in an organic operation, but that doesn’t mean it’s not a challenge. Both the Feitsmas and Rottiers use several techniques to optimize crop production without chemicals. Grain fields are harrowed when the crop is above five inches tall, which helps control 95 per cent of broadleaf weeds. With stubborn weeds such as Canada thistle, Fietsma will sometimes send workers out with gas-powered weed eaters to knock down plants or small patches before they go to seed. The Feitsmas often will interseed Persian clover with a broadcast applicator when harrowing, especially if the grain crop is being produced for silage. After the silage is cut, he leaves the clover to grow, plowing it under

as a green manure in the fall. It’s another way of getting nutrients back into the soil. If he can’t get enough manure on the fields, or clover underseeded with grain, he has to look at seeding a clover crop specifically for green manure. In 2011 Feitsmas seeded a mix of barley and peas to harvest as feed. The peas help to fix nitrogen in the soil, and the combination of the two crops increases protein in the feed mix. Managing the cows organically also takes more labour and management. Organic regulations require cows to be on pasture whenever weather permits, which takes more time, and also cows produce less milk than in a confined dairy operation, as they do more walking.

Herd Health Where herd health is concerned, catching problems early, or better yet, preventing illness is the best approach, since antibiotics aren’t an option, except as a last resort. “If a cow has mastitis, you have to milk her out between milkings,” says Jane Rottier. “If a cow goes lame, you have to hoof trim to correct the problem rather than just treat her with drugs.” Antibiotics can be used as a last measure, but the withdrawal time is double as for conventional. That means almost a month in which the milk can’t be shipped, which gets very costly. “It’s all about timing,” says Theo Feitsma. “You have to notice a cow getting sick in the early stages.” It is important to have consistent and attentive dairy workers, who notices those minute changes that signal something is going on. Both families use a variety of vitamins and minerals to boost the immune systems of dairy cattle. “The organic approach is that the body, not the antibiotics, fights the disease,” Theo says. “We believe more in prevention than in treating,” Renata adds. The Fiestmas use a lot of vitamins and feed extra kelp to get more minerals into the ration. The Rottiers also use a lot of vitamin C, aloe vera, and a homeopathic mix as feed supplements and are always interested in trying new herbal treatments.

Cross-breeding Another way, the Feitsmas have chosen to boost the immune system and a develop healthier herd is through cross-breeding. “The Holsteins aren’t bred for organic production,” says Theo. He’s breeding a mix of Brown Swiss/Holstein/Jersey to produce a stronger cow. “First we cross a Holstein with a Brown Swiss,” he says. “Then we cross that cow with a Jersey, then that offspring again with a Holstein. It produces a hybrid effect.” The Rottiers use a different approach to produce a more robust dairy cow. Following the recommendations of organic consultants, they feed their Holstein calves milk along with hay for the first three or four months. (Normally calves are fed grain supplements as soon as possible, and weaned off milk at five to

photos: marianne stamm

Theo and Renata Feitsma with some of their Holstein-looking organically raised dairy cattle, which are actually a three-way breeding cross.

The Rottier children all have their chores. Rebekkah, right, feeds the calves milk, while Micah and Naomi “help.” six weeks.) “By the time they’re weaned, the calves drink close to $1,000 worth of milk,” he says. “It definitely costs more, but we feel the nutrition produces healthier heifers and cows.”

Higher cost It does cost more to farm organically. Besides the higher labour costs — Feitsmas say herd and farm management requires an extra hired hand — there’s the higher cost for feed. Organic mineral supplements are more costly than conventional. Neither family can produce 100 per cent of the feed they need. Organic hay and grain costs more, and is not always the same quality they would produce themselves. Organic feed regulations require dairy farmers to use at least 25 per cent hay in the rations. That’s a challenge when trying to source high-quality hay in the Westlock area, where it often rains during haying season. One challenge of going organic for the Rottiers was finding an appropriate cleaning product for the milking parlour. Since wash water goes into the manure lagoon, and back on the field, they needed an effective, environmentally friendly product. They are now using 35 per cent food-grade hydrogen peroxide. It’s still a challenge to keep the weigh jars clean. But it is definitely better since they began using a tankless

Sarah Rottier milks out a cow immediately after calving to get that precious colostrum. water heater, which produces very hot water, on demand.

Higher return Both families struggle with the amount of record-keeping required. “That’s one big job,” says Renata Feitsma. All field[work and barn management must be recorded, and all labels kept of everything purchased. Then there’s the extra time on the phone trying to find organic suppliers, and contacting the certifying board to get things approved. The increased management and input costs associated with an organic dairy, earns producers an 18

cent premium per litre of milk. “You really need that premium to keep you going,” says Theo Feitsma. So, is it worth it? It definitely is for the consumer. “It’s still a niche market,” says Feitsma, “but its growing fast.” And for the producer? Both families are happy to be producing a product that fits their own healthy lifestyle. Despite the increased work involved, financially they feel it is working for them. “I wouldn’t even think of going back, “ says Karl Rottier. † Marianne Stamm is a freelance farm writer from Jarvie, Alberta. Contact her by email at: marerobster@gmail.com

NOVEMBER 7, 2011

grainews.ca /

Cattleman’s Corner RANCHERS DIARY

Not all is quiet on the Western Front Issues with cattle and water are causing stress in the neighbourhood HEATHER SMITH THOMAS

SEPTEMBER 28

his past week we’ve had freezing temperatures and I had to start draining the water hose (for watering the horses). Andrea and Rick helped Lynn take down the old power pole for the yard lights next to our horse pens. The pole has been leaning for several years and we’d propped it with poles, but a strong wind could blow it over and smash the fences, so we took it down along with the old fence along that side of Fozzy’s old pen. We need to rebuild the fence and use that pen for Veggie this winter. We’ll eventually hook the yard lights onto the hay shed. Snickers has been living in the ditch bank pasture (Brownie’s old pen) this summer and fall, but when we got short on irrigation water Lynn had to haul water to her with the four-wheeler every day. The carpenters are coming along on Andrea’s new house; this week they taped the inside walls in preparation for painting. It will probably be a couple of months before the house is finished, but Andrea keeps packing things and hauling them up there to store in her old trailer house — so it will be easier to move when the time comes. Our new neighbours gathered most of their cattle off the range this week. They brought some down the road and pushed one cow through the fence into Binnings’ place and left her there. She came down through Binnings’ fence into our upper place and Michael had to get her out. Later, when they took Lowell’s cows to the Maurer place they cut a hole in the fence on the lower place and trailed them across the Haynes Creek range. They ran into Jack Jacovak and Bruce Mulkey bringing cows off their range and nearly had a mix up with all the cattle. There are also some issues with water usage between ranches. We’re hoping we don’t have an Old West shootout among the neighbours! Today Michael helped Lynn put weirs in two of our ditches, so we can measure the water and know exactly if we are shortchanged and know when we have a legal right to call for water. We didn’t need any measuring devices for the 40 years we (and then Michael) leased the Gooch place (between our upper and lower place) and the piece below us, because we used the water judiciously on all these places and always made sure Jack Jacovak had his allotted water right. But times have changed. Our cows below heifer hill were running out of grass; Sunday we moved them to the field below our lane. Michael and Carolyn put all their horses in our Cheney Creek pasture — except for the few they are riding regularly. They’ve been helping some of their friends gather and work cattle this fall.

ago) that a cow jumped over this spring and smashed. We also took out the old pole gate into Snickers old pen that Lynn built in 1970 and replaced it with a metal gate. The gates and fences we built in earlier years are getting old and tired, like us! We moved Snickers down from the ditch pasture and put her in her old pen for winter. Andrea and Rick helped Lynn set new posts in the fence above the house and make new braces — and put a metal gate in place of the old pole panel that’s falling apart. A week ago we preg-checked and vaccinated the cows (all of them were pregnant, to calve in April) and vaccinated and weaned the calves. We put the calves in the grassy pens by the calving barn, with their mothers in the field right through the fence. That’s an easy

way to wean — on green grass, with their mamas nose-to-nose through the fence for security. After three days, we put the calves in the horse pasture where there’s lush green grass. Sammy and Dani walked out to see the calves and were pleased that their favorite calves remembered them. We had two more days of rain, and no longer have to worry about the irrigation water being short. This will help the dry spots in the fields, and our hill pastures. Michael and Carolyn’s yearlings are doing very well on the 320, scattered out over the mountains grazing. They took horses and dogs to Preston, Idaho for three days to help Carolyn’s brother help a friend round up cattle. The friend had a serious horse accident earlier this year and needed help with the roundup.

PHOTO: HEATHER SMITH THOMAS

Andrea and Rick digging a post hole for new gate in the never ending job of fence maintenance. Yesterday Andrea and Rick sawed up and hauled off the old crabapple tree that blew down a few years ago in Fozzy’s old pen. We’ll rebuild the old fence. There are many projects

to do before winter, but we’re started on several of them. † Heather Smith Thomas ranches with her husband Lynn near Salmon, Idaho. Contact her at 208-756-2841

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OCTOBER 20 We put a new (metal) gate in our chute corral, to replace the old board gate (that Lynn made 45 years

Merck Animal Health (known as MSD Animal Health outside the US and Canada), operating in Canada as Intervet Canada Corp., a subsidiary of Merck & Co., Inc., Whitehouse Station, NJ, USA. MERCK and MSD are trademarks of Merck Sharp & Dohme Corp., a subsidiary of Merck & Co., Inc., Whitehouse Station, NJ, USA. Copyright © 2011 Intervet International B.V., a subsidiary of Merck & Co., Inc., Whitehouse Station, NJ, USA. All rights reserved.

Rev-XS - Cattlemans Corner.indd 1

11-09-08 12:01

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NOVEMBER 7, 2011

Cattleman’s Corner BETTER BUNKS AND PASTURES

Time to finalize home-grown mineral program PETER VITTI

t this time, most mature cows and first-calf heifers are in the early stages of gestation. Their nutrition needs are relatively low and therefore it makes a starting point for designing a gestation into precalving mineral program. Producers have a lot of commercial mineral choices at their fingertips, from buying a standard beef mineral to one that is formulated for special needs. Either way, your own mineral program should focus upon and meet your beef cows’ macro- and trace-mineral (vitamins included) requirements to promote successful pregnancies throughout the winter.

A beef-gestation mineral program at home should follow a simple outline: (1) Basic mineral requirements of early- to late-gestation beef cows, (2) Review cow challenges (re: health and reproductive) that need improvement, (3) Determine essential minerals already supplied by current feedstuffs, and (4) Identify any special mineral needs due to environment, soil and water conditions. Most standard or customized beef cow minerals available at your feed store are manufactured from formulas that are based upon scientific mineral and vitamin requirements. These vary with animal age, reproductive performance and health status. Ruminant nutritionists design cow mineral formulas based upon recommendations developed by the National Research Council (NRC). Of all the macro- and trace minerals (with vitamins) vital to

beef cows, calcium (Ca) and phosphorus often form a foundation of most home-grown gestation-cow mineral programs. Consequently, an early gestating beef cow requires about 25 grams of calcium and 18 grams of phosphorus per day, yet these levels dramatically increase to about 50 grams of calcium and 35 grams of phosphorus per head per day by calving. In addition, both of these essential macro-minerals should always be provided in a 2:1 dietary ratio in order to prevent related body dysfunctions (i.e.: water-belly) during gestation and post-calving problems (i.e.: milk fever and retained placentas) as fresh beef cows. It should also be noted that Ca/P ratios of up to 7:1 can fed to gestating beef cows without detrimental effects their health or pregnancy. Since significant amounts of calcium and phosphorus are in for-

age-based gestation diets, it usually becomes an exercise of direct implementation of a well-formulated beef cow mineral that supplements remaining calcium and phosphorus needs. Keep in mind that as cows progress toward their second/third trimesters of pregnancy, they will need more calcium and phosphorus to be supplemented in their diets.

SAMPLE DIETS Consider the following foragebased cow diets, which are either matched with either a commercial 2:1 (re: 20 per cent Ca/10 per cent P) or 1:1 (re: 12 per cent Ca/12 per centP) cow mineral: • Alfalfa diets — 12 kg of mixedalfalfa hay, no grain fed : (supplies 80 g Ca, 15 g P) + 1:1 beef mineral @ 56 g (supplements 7 g Ca, 7 g P) = total dietary 87 g Ca, 22 g P; 4 to 1 Ca/P ratio.

Tips & Tales

calving We need your...

Friends and neighbours, we are once again looking for your best calving tips and tales for Cattlemen’s expanded January 2012 Calving special. We’re looking for good ideas, practical advice, or humorous tales and calving photos to share with fellow readers. A reward will be sent for tips & tales printed in this special.

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Enter before November 30, 2011

Canadian Cattlemen cap Send your Calving tips & tales (and your address) to:

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1666 Dublin Avenue Winnipeg, MB R3H 0H1 E-mail: gren@fbcpublishing.com Fax: 204-944-5416

• Grass diets — 10 kg of prairie grass, 1 kg of corn-distillers (high in P): (supplies 35 g Ca, 19 g P) + 2:1 beef mineral @ 42 g (supplements 8 g Ca, 4 g P) = 43 g Ca, 23 g P; 1.9 to 1 Ca/P ratio. • Straw diets — 8 kg of straw, 1 kg of grain fed: (supplies 15 g Ca, 15 g P) + 2:1 beef mineral fed at 70 g (supplies 14 g Ca, 7 g P) = 29 g Ca, 22 g P; 1.3 to 1 Ca/P ratio (note: require more calcium to be fed). Given this demonstration or actual diets, commercial beef cow minerals not only carry supplemental calcium and phosphorus, but are also formulated with a trace mineral (and vitamin) pack that supplies respective recommended levels for gestating beef cows on a complete feed basis (i.e.: copper — 10 ppm, zinc — 30 ppm, manganese — 40 ppm, cobalt — 00 ppm, iodine — 00 and selenium — 0.3 ppm). The effectiveness of such trace mineral supplementation is not only based on their total level in the overall diet, but upon their biological availability in the beef cow. Producers who want assurance of optimum metabolism of these essential trace minerals in their beef cow herd often buy beef minerals containing more bio-available “organic or chelated” trace minerals. They might first feed a lesscostly standard cow mineral for the first 90 days of early/mid gestation and then switch to a “breeder” mineral formulated with organic trace minerals for a remaining 60 days before calving. Some people forgo this two-step mineral program and choose to feed the fortified breeder mineral for the entire gestation period. Their belief is such mineral assurance of helping the cows meet all their trace mineral requirements costs a nominal $4 surcharge per cow, if the cow herd is placed on a higher plane of mineral nutrition during the entire gestation season (Nov 1 — April 1): • 70 g/head/d of a standard 2:1 beef mineral @ $25/25 kg for the 90 days, followed by a Breeder cow mineral (with organic trace minerals)@ $40/25 kg for 60 days = $ 13.02 • 70 g/head/d of a Breeder cow mineral (with organic trace minerals) @ $40/25 kg for 150 days = $ 16.80. Aside from the above macroand trace minerals levels from biologically available sources, we should not overlook to supplement the essential fatsoluble vitamins A, D, and E in both our standard gestation and “breeder” type minerals. About 100,000 IU of vitamin A, 5,000 — 10,000 IU of vitamin D and 50 — 200 IU of vitamin E should be supplied to each beef during gestation. With such good mineral (and vitamin) nutrition that can be packed into 50 to 100 grams fed to each cow per day of the gestation beef herd, a good gestation cow mineral really does began at home. It might be a standard mineral or a fortified mineral as the cows’ needs increase toward the end of gestation. Regardless, when the best mineral is chosen, it helps beef cow health and performance, which leads to greater operation revenues. † Peter Vitti is an independent livestock nutritionist and consultant based in Winnipeg. To reach him call 204-254-7497 or by email at vitti@mts.net

NOVEMBER 7, 2011

grainews.ca /

Home Quarter Farm Life SEEDS OF ENCOURAGEMENT

Feeling guilty for not having meetings? Understand why you need to meet and who needs to be there ELAINE FROESE

any farm families are feeling a deep sense of guilt knowing they should be having business meetings, but they just don’t seem to get around to it. The key factor is understanding why you need to meet. • Family council to explore how the family operates. • Succession planning. • Estate planning: wills, inheritance, fairness issues, legacy plans. • Advisers and suppliers meetings. • Human resources, operations, etc. Think about whose mouth needs to be moving at each type of meeting. Daughters-in-law are typically silent when they want to avoid conflict, and don’t feel their voice counts. Sons-in-law may be the joint successors, and they also see the meeting process differently because their “fresh eyes” come from a different family style of communication. The other mouths you may or may not want to have open are the common-inlaw partners of your farming children. Canadian law treats them as if “they were married” if they have lived together long enough. I treat partners and the in-laws as key players in the communication dynamic, and welcome them to voice their opinions at the meeting… with civility. Is the meeting to navigate a family council for how you celebrate as a family? This meeting includes all family members whether they farm with you or not. I know a family that meets

annually with the farming and non-farm children to talk about the family vision and how the farm is doing. The non-farm kids use this as a chance to encourage the parents to let go of control, and applaud the efforts of the farming siblings. Go to www. farmcentre.com to order a copy of Managing the Multi-generational farm which is a great tool for distinguishing between a family council and a farm business meeting. It also helps for developing your family code of conduct. Is the meeting to plan for the transfer of the business to the successor? This is a succession meeting and key players are the founders, successors and their spouses or partners. The non-farm heirs don’t need to be part of the initial succession planning meetings, but it is a good idea to include them in the communication loop as agreements are being reached. There seems to be a strong sense of entitlement in the country by non-farm heirs who believe they have a right to quota, cows and land! As a farm communication succession coach I typically have conversations with all the children and include them in the initial key family meeting, so that they have a clear understanding of their parents’ intentions. Many folks can live with tough decisions when they clearly understand the “why” behind the decision. Succession planning is a long process. One family has the succession meeting monthly, which is different than the monthly operational meeting. Agenda items are collected on a white board in the barn office, and the administration officer farm family member keeps track of hot issues to discuss. Minutes of the meetings are emailed to all participants.

All family members need to have a voice in the estate planning meeting, as this is where the issue of fairness and inheritance expectations can be voiced. Ultimately the founders decide what they want for their estate plan, yet they will have a keen sense of what their children are

one prepare their thoughts. A talking stick, like my Beanie Baby® ox helps the holder speak their mind without interruption. The ox is passed to the person who requests it, and all others listen. Dr. David Kohl of Virginia Tech had a grad student discover that in over 400 farms across

I challenge you to see where your resistance to opening your mouth is coming from feeling if the meeting gives everyone a voice. As a coach, I receive the minutes of the meetings to track the progress of the decision-making and keep all parties accountable to act. Another important meeting for grooming your successors is to include them in the meetings with your ag lenders, accountants and lawyers. Suppliers also appreciate developing a relationship with the next generation. I typically don’t meet with the equipment dealers, but when we are spending six figures on new iron I appreciate an informal update and expense justification from my spouse. It is a sign of respect for my partnership in the marriage and the farm business. (Read more about the women’s need to know at my blog “I’d just like to know… at www.elainefroese.com.) When you are encouraging mouths to open at your farm business meetings, you need to set down guidelines for respectful communication. An agenda before the meetings helps every-

six states, the farm families that had regular farm business meetings were 21 per cent more profitable. Communication that resolves conflict, deals with the people issues and pays attention to the financials of your operation is a wonderful thing. I challenge you to see where your resistance to opening your mouth is coming from. Is it your head not understanding the legal jargon or tax implications? It is perfectly fine to admit that you don’t understand, or need another explanation that makes better sense to you. Is it your heart making you feel sad about letting go of power and control? Or is your heart aching to find out what your daughter-in-law really feels about the family, but you are not at the point of trust yet, where she is willing to open up to you? Is it your gut, your intuition guiding you with the impression that you just have to face your fears and do the meetings anyway?

Farm families can’t always manage meetings well on their own. That’s why the Canadian Association of Farm Advisors directory exists to help you find a facilitator to guide your discussions (www.cafanet.com). I attend meetings in person, on the speakerphone and sometimes on Skype. My bias is to include all the family as much as possible. One family who tried to meet without the spouses ended up with a huge conflict, and a tape recorder at the table held by an angry successor who refused to talk if he could not “tape for his wife.” Decide why you need to meet. Meet regularly with great openness and a spirit of curiosity to find out what the other person is thinking and feeling, without judgment. I tend to be more inclusive of all family members, because I strongly feel that we all have communication filters, and it is easier for everyone to hear the message first hand, than have it translated later by a biased farming spouse. The best feeling in the world is to have your intentions clearly understood with the love and respect of the entire family wanting to make changes for the betterment of all parties. Open mouths that resolve conflict respectfully are very freeing tools that you need to add to your business tool box. Have a great meeting. † Elaine Froese farms in southwestern Manitoba. Her certified coaching practice empowers farm families to talk about tough issues and take action with reasonable timelines. She is the author of Do the Tough Things Right… how to prevent communication disasters in family business. Visit www.elainefroese.com or call 1-866-848-8311. Make plans to meet this winter as Growing Forward funding for families doing succession planning will end in December 2012

Power outages and food safety BY JULIE GARDEN-ROBINSON NDSU EXTENSION SERVICE

ur house was pitch black and silent due to a power outage. The wind was howling loudly outside, and a tornado warning was in effect. My family and I had made our way carefully to the basement, and we were huddled in the safety of my windowless arts and crafts room. My two older kids had grabbed blankets and pillows. My husband brought a battery-operated lantern, a flashlight and a radio tuned to the weather. We listened to the radio and waited until the all-clear announcement was given, then we made our way upstairs guided by the flashlight. We had to wait quite a while for the power to resume. How can you keep food safe when the power goes out? These are some questions and answers based on information from the U.S. Department of Agriculture. These rules would apply for food during a power outage or an appliance failure. If someone accidentally leaves the freezer door partially open, these rules would work, too.

Question: The food in my freezer began to thaw during the power outage. Is it safe to eat? Answer: In general, food with ice crystals can be refrozen. Be sure to keep an appliance thermometer in both your freezer and refrigerator so you know the temperature. Freezers should maintain food at -17.7 C (0 F) or lower. Refrigerators should maintain food at 4.4 C (40 F) or lower. Question: I just found out our power outage is going to last 24 hours. I have a freezer full of meat. What can I do? Answer: Keep the freezer closed at all times. Food will remain frozen in a full freezer for about two days, while a half-full freezer will stay at freezer temperature for about a day. If your freezer isn’t full, you can group your packages to form an igloo around each other, but work quickly to avoid warming the freezer. You also might put the food on trays so the juices don’t drip on other packages. You can keep your freezer cold longer if you pick up some ice or dry ice to maintain the cold temperature. Blocks of ice will keep

the food cold longer than bags of ice cubes. Fifty pounds of dry ice will keep an 18-cubic-foot full freezer cold for two days. Moving your food in coolers to another location also would be an option. Question: Our power was out for almost four hours. What foods in my refrigerator are most perishable? Answer: Meat, poultry, fish, milk and most leftovers are considered highly perishable because they are high in protein and moisture. Condiments, such as ketchup, mustard and soy sauce, remain safe. According to the U.S. Department of Agriculture, food will remain cold in a refrigerator without power for about four hours. Your food should be fine as long as you kept the refrigerator door closed. Regardless of power outages, be sure to check the temperature of your refrigerator and freezer regularly to be sure they are keeping your food fresh and safe. † Julie Garden-Robinson, PhD, R.D., L.R.D., is a North Dakota State University Extension Service food and nutrition specialist and associate professor in the department of health, nutrition and exercise sciences

PHOTO: THINKSTOCK

If your power goes off for an extended period, do you know which refrigerated foods are most perishable?

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NOVEMBER 7, 2011

Home Quarter Farm Life POSTCARDS FROM THE PRAIRIES

Remembering the good… Sometimes it’s the only thing to hold on to JANITA VAN DE VELDE

t this time of year, we stop as a family to take part in Remembrance Day services to give thanks and absorb the sacrifices that were made on our behalf. It’s humbling to consider what was done for us, and sad that in our remorse and commitment to never repeat the damage, we find the world in deeper turmoil than it’s ever been. The ongoing wars, slaughter and famine overwhelm me to such a point that I have a hard time watching the news. The way I see it, we have two choices: bury our heads in the sand and declare (with a mouthful of sand), “Whew. Thankfully, that’s not my problem.” Or, we can commit to each doing our part, in any way that we can; start each day bent on slaying the world with random, and perhaps senseless, acts of kindness. So what do I do? A portion of proceeds from the sale of my book goes to World Vision to help those less fortunate. (Cue shameless promotion on my part and senseless act of kindness on yours… to

order my book, visit my website at www.janita.ca.) I truly believe that the lineup of people willing to help should always be longer than the lineup of those in need. Wouldn’t it be cool to go on a site like World Vision and see snapshots of people eager, ready and willing to help rather than photo upon photo of people who need a helping hand? I’d like to see that change in my lifetime. Whether it’s helping those in need of life’s basic necessities, or those battling a ghastly disease, I look for ways to be of assistance, often going to extremes. In case you haven’t noticed, I’m not one to hold back when it comes to sharing my thoughts, loosely translated in my case to Running of the Mouth. Three years ago, in an effort to help raise money for cancer research through the Terry Fox Foundation, I agreed to have my head shaved as part of “The Great Canadian Head Shave.” In all started with a little wager. A group of people at work were looking for volunteers, as they needed five employees to participate in order to qualify for our corporation donation match. There was only a week left until the big event so I told them if they could raise $10,000 over the course of the following five days, then my straw bale would hit the floor. Knowing

this was a stretch goal, and also knowing there was enough people who would love to see me bald, I laid out this proposal fully aware of the inevitable outcome. I was also painfully aware of the following: I would not look like Demi Moore. I would bear a striking resemblance to Beaker from the “Muppet Show.” That, or the Swedish Chef; neither instilled a great sense of confidence. In the end, I’d rather have my friends and family than my hair, so ultimately the decision was an easy one. In the end, through very generous donations from the extraordinary people I work with, our small group raised over $17,000 in one week, which amounted to over half of what was raised in the entire city of Regina for this event. Do you ever feel like selfless acts are actually quite selfish in nature because you feel so darn good after helping out? Friends, I was flying. I was also looking like Beaker. So I guess I was a flying Beaker. With that said, could I be doing more? Yes. I need to teach my children about the true freedom that comes with giving. I need them to understand the difference between a need and a want and ensure that I’m instilling these values at a

very early age, so that it becomes a foundation to their character. And most importantly, I need them to know that it all starts with them. When it comes to something as important as the state in which we leave the world, there’s no passing the buck. My parents have taught me that giving back to others is one of the greatest legacies we can leave. They’ve taught me that life is one big board game in that you get your chips, play a good game and pass it on. Never take more than you give — and in comparison to the rest of the world, we’ve been given so much. I’ll leave you with this quote, which was inscribed at the tomb of an Anglican bishop at Westminster Abbey: “When I was young and free and my imagination had no limits, I dreamed of changing the world; as I grew older and wiser I discovered the world would not change, so I shortened my sights somewhat and decided to change my country, but it too seemed immovable. As I grew into my twilight years, in one last desperate attempt, I settled for changing only my family, those closest to me. But alas, they would have none of it! And now I realize as I lie on my deathbed, if I had only changed myself first, then, by example, I might have changed my

Before

After family. From their aspirations and encouragement I would have then been able to better my country, and who knows, I might have even changed the world.” Kind of makes you want to take a crack at playing a better game, doesn’t it? † Janita Van de Velde grew up on a farm near Mariapolis, Man. She holds a bachelor of science degree in agricultural economics from the University of Manitoba, and has worked for a financial institution since graduating. She lives in Regina, Sask., with her husband Roddy and their children Jack, Isla and James. Her first novel, Postcards Never Written, was the recipient of the Saskatchewan Reader’s Choice Award and also listed by CBC as one of the top funny books in 2009. She donates a portion of proceeds from the sale of her book to World Vision to help those less fortunate. For more information, or to order her book, visit her website at www.janita.ca

Save the farm — and your family — with this informative video series Watch Elaine Froese at www.grainews.ca Elaine Froese is an expert in helping family businesses talk about tough issues. She’s a catalyst for courageous conversations for positive farm succession planning. Like many of her clients, Elaine is an active farmer and she watches the sky. Her common-sense and down-to-earth style of communicating and asking hard questions is deeply appreciated by folks who find it hard to ask for help.

Dealing with Transition Starting a successful farm career is hard. Ending a successful farm career can be even harder. In this video series first prepared for AgVision TV, host Kevin Stewart talks to farm family coach Elaine Froese (www.elainefroese.com) about the ways to maintain healthy family relationships while transferring the farm to the next generation.

Other videos available to view include: • Freeloading • Treating children fairly isn’t always fair • Making a succession plan • Ten barriers to succession planning

• Dealing with death Does your family know what to do when you die? • Is Grandma a bully? • The Daughter-in-law barrier • The challenge of gifting money

Don’t miss any of these informative videos – visit www.grainews.ca AGCanadaTV is sponsored by

NOVEMBER 7, 2011

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Home Quarter Farm Life

Reesor Ranch — a tribute to cowboy culture Guest ranch offers a bit of heart and a bit of history BY CHRISTALEE FROESE

he rain pelting southeast Saskatchewan this past spring threatened to sink my soul, so I headed for higher ground. So high in fact, that it just happened to be the highest point in Canada between the Rocky Mountains and Labrador. Even in Saskatchewan’s Cypress Hills there were sloughs filled to capacity, impromptu brooks spilling over their banks and fields drenched with water, but as I climbed higher and higher, relief arrived. The winding road up to Reesor Ranch was bone dry. The horses and cattle lumbering up and down the grassed hills here seemed at peace, not having to contend with muddy pastures and rain-created lakes in the middle of their breeding grounds. I’d been hearing about the historic Reesor Ranch in the Cypress Hills for years, always imagining that I’d find real cowboys who roped cattle, held branding days and lived off the land. I was not disappointed as Scott and Teresa Reesor greeted me and a group of friends at the Texas gate and directed me to the quaint cabin that would be home for a few days. The Reesors have created a living tribute to the cowboy culture of southwest Saskatchewan and southeast Alberta at their guest ranch near Maple Creek that sleeps up to 100 and hosts visitors, weddings and family reunions all year long. As daughter Leanne Reesor and I prepared for our afternoon ride high atop the hills at the northernmost edge of Cypress Hills Interprovincial Park, her love for the ranching culture was evident. At just 19 years of age, Leanne hoped to take over the operation one day and return the 2,000 acres of ranchland to a place that is home to 350 cattle like in her great-great-grandfather’s day in the early 1900s. The ranch today boasts 100 to 150 cattle at any given time, as they graze on the abundant rolling pastures and calve in May and June in order to avoid the spring snowstorms that are known to cause chaos in these historic hills that reach 1,234 metres above sea level. “I love that we’re ranchers and I’m always trying to explain the difference between farming and ranching to people who visit us,” said Leanne. “Most people think ranchers and farmers are the same, but many farmers don’t have horses whereas we need them for what we do and here in these hills there is natural grass and vegetation that is not found anywhere else.” Even the air at Reesor Ranch is different. With freshness that only a high elevation can bring, and hints of pine from the abundant evergreens that appear in patches on the hills, the air soothes like none other. And while mosquitoes did appear to be congregating in record numbers, much like they were doing back home in my southeastern neck of the woods, these mosquitoes chose not to bite. After two full days laying in the tall grass to take photos of sunsets, hiking the hills covered with wildflowers and horseback riding up steep ridges and down bush-filled coulees, I did not receive one single mosquito bite. This ranch, that dates back to

1904 and even predates the founding of the province in 1905, certainly did provide the relief I was looking for. With its cosy cabins, expansive banquet barn, historic ranch house, quiet horses, high hills and scenic views for as far as the eye could see, Reesors lifted me up above the quagmire forming in my water-soaked part of the province and offered two days of dry, peaceful cowboy comfort. With a towering team of horses hooked up to take us on a tour of the property, and bluebirds flitting beside the fence posts all along the scenic route, the three adults among us were in bliss as were the wideeyed children who loved not only the ranch’s horses, but the cats and dogs as well. “It’s always our hope that people who need this kind of experience

show up, and they always seem to,” said Scott. “We offer a sense of history and a place in time that seems to stand still.” With this fourth-generation rancher unhitching his peaceful team of horses, he spontaneously breaks into a cowboy poem about “the old home place” which comes straight from experience, and straight from his ranching soul. “I enjoy knowing that we can touch a place in people’s hearts,” said Scott. “We feel honoured to be here in the Cypress Hills doing what we’re doing — giving people a bit of heart and a bit of history that is away from their fast-paced worlds.” For more information on Reesor Ranch, visit www.reesorranch. com. † Transportation for a tour of the property is provided by a team of horses.

Christalee Froese writes from Montmartre, Sask.

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Home Quarter Farm Life SINGING GARDENER

Ted talks beans and watercress Ideas for using beans and health benefits of watercress TED MESEYTON

ater on, things to know about a wonderful healing plant known as true watercress. But first, it’s my turn to spill the beans, sort of! I’m not going to tell in detail something out of school when I was in Grade 3. Suffice to say there was a kid who took my beanbag and another who ate my jelly beans. But — I shall talk of beans of a different sort.

A FAMILIAR EXPRESSION IS … pork and beans are a musical fruit, the more you eat, the more you ----. If readers so choose, fill in that four-letter word at your discretion. So let’s get on now with the subject of real beans. As a matter of fact, I got an email in early October from a Northern Ontario Grainews reader and it’s all about beans. Dear Singing Gardener; After your column on coloured beans last winter I ordered some Orca, Jacob’s Cattle and Tongue of Fire. I had a good crop and I am wondering about cooking them. Do I treat all of them the same like navy beans or Great Northern? Thanks for your interesting page and any cooking help would be appreciated. I live just outside New

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Seed packets of watercress and other cress varieties are available from West Coast Seeds Ltd., Delta, B.C., and Early’s Garden Centre, Saskatoon, Sask. Liskeard which is about 100 miles north of North Bay in the Little Claybelt Region. I’ll be watching for your reply. Thanks. Margaret Arnott, in Northern Ontario

COME ON NOW READERS … here’s your chance to also “spill the beans” about beans. By the way, those three words can be interpreted to suggest: tell all you know, or all you wish to tell. There’s another traditional expression that says: Make five beans. Know how many. Such pictograph words are said to mean: to be well informed and intelligent. I won’t bother detailing: full of beans. It’s said to refer to a specific type of character. You may interpret it as you wish.

I HAD A CHANCE … to speak on the telephone with Karyn Wright of Terra Edibles in Foxboro, Ontario. She sells the varieties mentioned and many other bean seeds for garden planting. Karyn tells me Orca, Jacob’s Cattle, Tongue Of Fire and Great Northern are all treated similarly. She shared the following. “They’re very reliable producers and good for dried use, but should be soaked overnight, or for a day. Then, drain off the water before adding beans to soups, making baked beans or any other favourite bean recipes.” Karyn mentioned: “Tongue Of Fire comes with a bonus. It can also be eaten as fresh green beans harvested off the bushy plants before they ripen.” The name refers to the colouring of the 20-cm- (eight-inch-) long red pods and not the wonderful creamy flavour of the ripened white seeds with red specks. If you’re looking for a variety to thicken and make creamy soups, Karyn suggests “easy-togrow Hutterite Soup bean.” This gourmet heirloom was brought to Canada by Hutterite Christians from Austria about 1750-60. Another heritage variety that’s been around for generations is Ukrainian bean. This is a large, round, white-seeded, marrowfat type with excellent taste and very useful in soups. There’s a bonus too. You can mash cooked

Ukrainian beans and use as a base for wonderful sandwich fillings.

BEAN POD TEA You’re not likely to find this old remedy in any recipe book. If you are diabetic or have any of the other health issues mentioned later, your condition should be monitored by a health-care provider. Scarlet Runner bean is probably the best known and has been grown here in Canada and other North American countries since the 1800s. Ornamental, tall vines can reach a height of four metres (over 12 feet) with numerous scarlet flowers that eventually turn into tasty snap beans. When left to dry in pods, they can be shelled and used in place of lima beans. There are shorter varieties of other green runner beans too. This time of year, you may still be able to buy some fresh beans. To make runner bean tea, chop up a generous handful of fresh or dried runner beans in their pods and soak in water overnight. Next morning, simmer the beans in the same water for 30 to 40 minutes. Remove from heat, cool and strain off the liquid. If too concentrated, dilute with some water. Drink one-half cupful (four ounces) two or three times daily, between meals. Its value and flavour is enhanced by adding a few sprinkles of pure garlic powder (no salt). In generations past, this home remedy was used against diabetes, dropsy (swollen legs and water retention), kidney and urinary issues, heart weakness, gout and rheumatism. We are regularly hearing about the next big medical breakthrough on TV news and in the print media. But often at the end of the story, helping or curing the health subject discussed often seems to be four or five years further down the road. What about right now?

Eating as little as three ounces of watercress daily has been shown to effectively battle and help ward off cancer, both in the short and long term and as studies suggest “turn off” the blood supply to tumours. Watercress is laden with outstanding natural plant compounds. “There appears to be a direct correlation between eating watercress and reducing one’s susceptibility to cancer.” A U.K. TV presenter and survivor of bowel cancer commented: “Research from the University of Ulster is very interesting — it’s great to know there are simple things that people can do — like eating watercress — which could help them avoid getting cancers. It’s great that watercress farmers want to raise awareness of bowel cancer, the commonest cancer in Europe. Thousands of people die unnecessarily of bowel cancer every year — with exercise and a good diet, many of them could live.” Watercress is the U.K.’s most historic salad leaf. In the 19th century, watercress was a staple part of the working-class diet, most often eaten for breakfast in a sandwich. If people were too poor to buy bread, then they ate it on its own, which is why it was sometimes known as “poor man’s bread.” Bunches were hand-held and eaten ice-creamcone style and became the first “on-the-go takeout food.” For decades, watercress, like parsley, has been pushed to the side of the plate as nothing more than a decorative garnish. Fortunately, watercress is currently enjoying a renaissance, with sales increasing by £18 million a year to £55 million. Consumers and celebrities alike are rediscovering its distinctive peppery taste and its amazing nutritional benefits. Liz Hurley has been known to drink seven cups of watercress soup a day!

HIPPOCRATES, THE FATHER OF MEDICINE … cultivated watercress in pure spring water and revered it as a superfood. Popularity continued down through the cen-

turies. Hippocrates is said to have located his first hospital close to a stream to ensure freshgrown watercress to help treat his patients. Greek soldiers were given it as a tonic before going into battle in the 16th century. Herbalist Culpepper claimed it could cleanse the blood. It is brimming with more than 15 essential vitamins and minerals. Gram for gram, it contains more iron than spinach, more vitamin C than oranges and more calcium than milk. But — ready-to-eat watercress may not be that easy to find in most stores. Fortunately, it’s an herb you can grow indoors in pots with supplementary lighting year round and outside seasonally in a sunny, moist location. Watercress is a member of the cole family and related to broccoli, cabbage, cauliflower and kohlrabi. Gardeners are familiar with all the good things we’ve been hearing about cole veggies and sauerkraut. You may be able to find watercress extracts at natural and pure food health stores. Watercress seeds are readily available from: West Coast Seeds, 3925 – 64th Street, Delta, B.C., V4K 3N2; phone 1-888-804-8820; and Early’s Garden Centre, 2615 Lorne Ave., Saskatoon, Sask.; S7J 0S5; phone 1-800-667-1159. Every once in a while I still meet up with someone who says, “Hey Ted, when did you shave off your beard? I didn’t recognize you at first.” Among my several answers, here’s a poetic one. I had the toughest whiskers in the town, Bought a razor and mowed ’em down, Now that I keep my chin more tidy, I expect to meet a lady Friday. This is Ted Meseyton the Singing Gardener and Grow-It Poet from Portage la Prairie, Man. There’s power in kindness, yet when put into practice, it doesn’t feel powerful at all. Matter of fact, to be kind almost feels too simple to be important. Yet, it’s among the most essential things that can transform a life. But someone asked: How can that be? Simply put, kindness is the foundation of a good heart and with a good heart... a good life follows. How’s your heart? My email address is singinggardener@mts.net.

HEALTH-PROMOTING WATERCRESS There are several types of cress such as wrinkled curly cress, peppergrass curly cress and my personal favourite — true watercress (Nasturtium officinale). Numerous studies already highlight benefits of true watercress and its emergence as a potent anti-cancer superfood.

These container-grown, half-dollar-size, true perennial watercress leaves (Nasturtium officinale) are kissed by beads of rain. Watercress possesses a distinctive peppery, health-promoting taste. Simply pinch off leaves from the plant and eat as is, or pile leaves high in a watercress sandwich between two slices of whole grain bread.

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