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ALSO IN THIS ISSUE PRODUCER CARS POST-CWB ................................ P.9 FARMER-OWNED TERMINALS IN THE OPEN MARKET .......................................... P.14 COMPLICATED CONTRACTS AND YOU .................. P.24 Publications Mail Agreement Number 40069240

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CROPs Guide

February 2012




Editor’s note 4 Too much fine print

challenges 9 New What does an open market

Gleanings 6 Notes from the grain industry

14 Fallout

than 1,000 words 32 More A closeup look at wheat milling research update 40 WGRF Effective biocontrols can take a

big bite out of pest populations

42 Markets Corn stocks are ultra-tight and

wheat is in adequate supply — how will this affect prices?

mean for producer cars?

How will those changes affect short lines and other players?

future 18 Uncertain Where will farmer-owned

Cover Story rop protection 36 CSimple tips and strategies that can save you money

 lyphosate 38 G resistance AAFC has confirmed the first case in the Prairies in an Alberta field

terminals fit into the picture?

balance 20 Fine Not too little, not too much — getting phosphorus just right

24 Legalese Those complicated

contracts and your farm

time 28 Cleanup Preventing the spread of clubroot on your farm

Our commitment to your privacy: At Farm Business Communications we have a firm commitment to protecting your privacy and security as our customer. Farm Business Communications will only collect personal information if it is required for the proper functioning of our business. As part of our commitment to enhance customer service, we may share this personal information with other strategic business partners. For more information regarding our Customer Information Privacy Policy, write to: Information Protection Officer, Farm Business Communications, 1666 Dublin Ave., Winnipeg, MB R3H 0H1. Occasionally we make our list of subscribers available to other reputable firms whose products and services might be of interest to you. If you would prefer not to receive such offers, please contact us at the address in the preceding paragraph, or call 1-800-665-1362.






A fine print world



ournalist Ron Friesen filed an interesting piece for this issue on the contracts farmers sign (see article on page 24) that got me to thinking. He details some of the fine-print boilerplate that the various companies you do business with insert into the contracts you sign. He also talked about some potential solutions to this information shortfall. Now, living in downtown Winnipeg I certainly haven’t been signing any technical use agreements, or whatever they’re called these days. No delivery contracts either. Apparently nobody’s interested in contracting the production were I to convert my front lawn to canola. But I certainly sign contracts, and like farmers I’m sometimes signing things I don’t really understand. Cellphone contracts are a great example. Generally you can get the broad outlines of what you’re paying for fairly clearly: phone x, service plan y, this many minutes a month, so many texts and so much data. That’s not where the process breaks down. Where it breaks down is when it’s time to sign on the dotted line — and you find out the dotted line is at the bottom of four sheets of legal-size paper that have been filled from top to bottom with tiny type that’s spewing forth reams of impenetrable legalese. I spend most of my waking hours working with the English language. And despite what certain high school teachers of mine that had to teach me physics might tell you, I don’t think I’m a complete dummy. And mostly I can’t make heads or tails of what’s written there. But, I need a phone to live my life and conduct my business. I mentioned this to a lawyer friend one day, and she asked to see the contract. With a bit of rummaging around, I found it and handed it over. She dove into it and started telling me the implications of what I’d signed. Some of them were fairly shocking. For example, I’d signed away my right to seek any sort of remedy before the courts, without knowing I had done so. So if I have a problem with my cellphone company, I now can’t take them to small claims court, for example. Instead I have to enter into a quasi-legal mediation process. The punchline, according to my lawyer friend, is that the mediators come from a list predetermined and preselected by the cellphone company. This is something she quickly pointed out that basically meant I wouldn’t

get a fair hearing. The mediators benefit from being on the list, since they’re paid for their services, so they wouldn’t endanger their status by ruling against the company much, if at all. No way to prove it legally, of course, but that was her strong suspicion. I have no doubt that there are clauses sprinkled throughout agriculture contracts that might vary in the details, but no doubt have a similar effect on the legal status of the parties. It’s what happens when you have a few things. Big companies with lots of legal firepower on one side of a deal, and a bunch of individual consumers or farmers on the other side of the deal, is probably at the top of the list. It’s almost a recipe for this sort of abuse, because it ensures that in most cases the only lawyer who ever sees it is working for the company, and has only one interest in mind — getting the best possible deal for the client. It also seems to happen most often where there isn’t much meaningful competition. Our cellphone companies are basically some of the most coddled in the world, sheltered from foreign competition, and the result is predictable. We have some of the worst service and highest costs in the industrialized world, according to the OECD. I’m sure they’d pull their socks up if they suddenly found themselves competing against world-leading companies like T-Mobile and Virgin (rather than the weak Virgin prepaid stuff we currently get that uses the domestic companies’ networks). My point — and thanks for sticking with me long enough for me to get to it — is that this is a problem. People should be able to purchase products and services and know what they’re getting. They should know that if they don’t get what they’ve paid for, there’s a clear-cut and fair process to get a hearing. If they can’t do that, then something clearly needs changing. And that message applies to all companies, including those you do business with. What’s less clear, unfortunately, is how to get all these companies to listen to this message. ■


Occasionally, in the rush to put a magazine together, an editor can make a mistake, and in the last issue I made one. Writer Val Ominski correctly identified one of her sources as Dr. Owen Olfert, but when writing a caption for a photo I somehow managed to change his first name to Ian. My apologies to all, and I’ll try to do better.

G O R D G I L M O U R 4




Editor: Gord Gilmour (204) 294-9195 Fax (204) 942-8463 Email: REGULAR CONTRIBUTORS Brad Brinkworth Ron Friesen Warren Libby

Rhéal Cenerini Richard Kamchen Val Ominski

David Drozd Gord Leathers Jay Whetter

ADVERTISING SALES Cory Bourdeaud’hui (204) 954-1414 Cell (204) 227-5274 Email: Lillie Ann Morris (905) 838-2826 Email: Head office: 1666 Dublin Ave., Winnipeg, MB R3H 0H1 Advertising Services Co-ordinator: Arlene Bomback (204) 944-5765 Fax (204) 944-5562 Email: Publisher: Bob Willcox Email: Associate Publisher/Editorial Director: John Morriss Email: Production Director: Shawna Gibson Email: Director of Sales and Circulation: Lynda Tityk Email: Circulation Manager: Heather Anderson Email: Art Director: Jenelle Jensen Contributing Photographer: Ryan Fennessy Contents of this publication are copyrighted and may be reproduced only with the permission of the editor. CROPS GUIDE is published by Farm Business Communications, 1666 Dublin Ave., Winnipeg, MB R3H 0H1. Head office: Winnipeg, Manitoba. Printed by Transcontinental LGM-Coronet. CROPS GUIDE is published 7 times a year. Publications Mail Agreement Number 40069240. Canadian Postmaster: Return undeliverable Canadian addresses (covers only) to: Circulation Dept, 1666 Ave., Winnipeg, MB R3H 0H1. U.S. Postmaster: Send address changes and undeliverable addresses (covers only) to: Circulation Dept., 1666 Dublin Ave., Winnipeg, MB R3H 0H1.

ISSN 1927-5382(Print) ISSN 1927-5390(Online) Subscription inquiries: Call toll-free 1-800-665-1362 or email: U.S. subscribers call 1-204-944-5766

CROPS GUIDE is printed with linseed oil-based inks. PRINTED IN CANADA Vol. 01 No. 02 website: The editors and journalists who write, contribute and provide opinions to CROPS GUIDE and Farm Business Communications attempt to provide accurate and useful opinions, information and analysis. However, the editors, journalists, CROPS GUIDE and Farm Business Communications, cannot and do not guarantee the accuracy of the information contained in this publication and the editors as well as CROPS GUIDE 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.

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Gleanings g r a i n

i n d u s t r y

n e w s

Appointments Canola Council head senate bound

Industry Notes Viterra expects major gains from CWB deregulation

Photo credit: Allan Dawson

The organization representing Canada’s canola industry has lost its president to Canada’s Senate. Prime Minister Stephen Harper recently announced the appointment, effective immediately, of JoAnne Buth as one of seven new members of Parliament’s upper chamber. Buth takes the seat previously held by Sharon Carstairs as one of Manitoba’s representatives in the Senate. Buth replaced Barb Isman as president of the Winnipeg-based canola organization in 2007, having previously served as the council’s vice-president. Buth came to the ag field with a B.Sc. in biology from the University of Winnipeg and an M.Sc. in entomology from the University of Manitoba. Before joining the council, Buth had worked at Carman, Man. as a manager and weed management specialist at the soils and crops branch of Manitoba’s Agriculture Department. Buth’s resume in agriculture also includes stints as a research and development manager with DowElanco Canada and as an information officer for the federal Agriculture Department’s research station in Winnipeg.

As the chief executive at the council, Buth has been the point person for its “Growing Great 2015” initiative, launched in 2007 and aimed at increasing Canada’s canola production to 15 million tonnes per year, from its 2006 level of nine million. The initiative also aims to boost canola seed exports and Canada’s domestic canola crush to 7.5 million tonnes each, and to raise the ratio of “classic” to “designer” canola varieties grown in Canada from 90:10 to 75:25.

Ex-SaskPool VP to chair rebooted CWB The pared-down board of directors at the Canadian Wheat Board has elected a former Saskatchewan Wheat Pool executive as its new chairman. Bruce Johnson, who was first named to the CWB’s board in 2006 by then-agriculture minister Chuck Strahl, was recently named the board’s chair. Johnson brings a substantial grain industry resume to the job, most notably as former executive vice-president of SaskPool’s grain group and, previously, CEO of AgPro Grain, the Pool’s Prairie grain-handling business outside Saskatchewan. Johnson was fired from the Pool in 1999 as the company spun into financial woes ending in major restructuring, from which it emerged and eventually merged with Agricore United in 2007 as Viterra. He later became CEO of FarmGro Organic Foods, worked as an ag industry consultant and now works in regional management in the propane business in Regina. Johnson and the board’s other government-appointed directors — former Manitoba ag minister Glen Findlay, former Viterra chief financial officer David Carefoot, former AU board member Ken Motiuk and current CWB CEO Ian White — remained





after the recent passage of the federal Marketing Freedom for Grain Farmers Act. The bill’s legislative amendments ended the tenure of the CWB’s remaining farmerelected directors. “Our immediate focus as a board will be to provide stability in the marketing of western Canadian grain,” Johnson said in a CWB release. The CWB’s directors and management, he said, will now work “to offer farmers and international grain customers a superior package of contracts and services.

Canada’s biggest grain handler is now set to predict what it will gain from the closing of the Canadian Wheat Board’s single marketing desk. In a guidance statement ahead of the release of its fourth-quarter and year-end financial data, Viterra said it expects its earnings before interest, taxes, depreciation and amortization (EBITDA) to rise by between $40 million and $50 million per year in fiscal 2014 and beyond as a result of the end of the single desk. With forward-contracting of Prairie wheat, durum and barley already underway for direct deliveries pending formal deregulation on Aug. 1, Calgary-based Viterra said it expects to begin “realizing modest benefits” in its fourth quarter of 2012, with “more significant impacts” in fiscal 2013. Following the passage of the federal government’s Bill C-18, Viterra became the first grain company to offer bids to buy wheat, barley and durum directly from Prairie growers. “Additional volumes” at the company’s primary grain elevators and port terminals are expected to generate higher revenue from its fixed-cost facilities, and to earn “additional merchandising margins,” the company said. Additional grain purchases from farmers, as a result of open wheat, durum and barley marketing is expected to require $150 million to $200 million of “incremental working capital,” Viterra said. Given its existing assets, staff and global marketing network, Viterra said it “does not expect to incur any additional growth capital expenditures” to achieve the expected earnings benefit. “With the ability to purchase all grades of wheat, barley and durum directly from growers, the company expects to increase its earnings by attracting additional volumes and optimizing its operational efficiencies,” Viterra said. “With the new marketing freedom in Canada, Viterra’s international network will benefit growers as it provides them access to additional global markets,” company CEO Mayo Schmidt said in a release. “Despite a legal challenge from opponents of the legislation, Viterra remains confident that there will not be any delays” to Bill C-18’s full implementation, the company said.


11:59 PM

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Industry Notes

Planned western wheat, durum futures generating interest The launch of wheat, durum and barley futures contracts on the ICE Futures Canada trading platform is reported to be generating interest from many potential participants. The Canadian government passed legislation in December ending the Canadian Wheat Board’s long standing single-desk marketing powers for western Canadian wheat, durum, and malting barley as of Aug. 1, 2012. As the legislation moved forward over the latter half of 2011, Winnipeg-based ICE worked in conjunction with industry participants to develop futures contracts for use under the new open market. ICE Futures Canada president Brad Vannan said the new futures have been generating “considerable interest” from many potential market participants including grain companies, commission houses, speculators, farmers, and international industry participants in Europe and the U.S. The new contracts, he noted, are similar to the already successful canola contract offered by the exchange. The durum futures in particular are seeing broad interest, which Vannan described as “very encouraging.” Canada supplies a little over 50 per cent of the global trade in durum, making it a very important supply region. “The participants understand very well that it’s important to have some kind of price-setting mechanism plus something they can hedge their needs in,” he added. A well-functioning futures market is an important tool for pricing grain in advance, as it will eliminate some of the price risk and will allow the supply chain to operate much more efficiently, said Vannan. While durum futures contracts were tried in Europe and the U.S. in the past, they were never successful. Vannan said one reason behind the failure of those previous durum contracts was the fact that the Canadian crop was tied up under the CWB. With the single desk removed, he said, there will now be a greater need for a viable futures market. Jerry Klassen, manager of the Winnipeg office for Swiss-based GAP SA Grains and Produits, said European durum buyers and other key players were showing a lot of interest in the launch of the futures market.

SPG gains new board members The Saskatchewan Pulse Growers (SPG) have three new faces around the board table, Shawn Buhr of Lucky Lake, Jim Moen of Cabri, and Bert Vandenberg of Saskatoon.

Shawn Buhr Buhr and his family have produced pulses on their 6,400-acre farm for nearly 20 years, making up 20-40 per cent of their rotation. He holds a bachelor of science degree in agriculture from the University of Saskatchewan (U of S). Shawn sat on the SPG board from 1998 to 2004, and was chairman in 2003 and 2004.

Jim Moen Jim Moen and his family have farmed in the Cabri area for almost 20 years on their 3,200acre farm, where pulses make up 40 per cent of their rotation. Moen has a degree in agriculture and is a member of the Saskatchewan Institute of Agrologists. He sat on the SPG board from 2002 to 2007, and was chairman in 2007.

Bert vandenberg The third member, Dr. Bert Vandenberg, has been a pulse crop breeder at the University of Saskatchewan’s Crop Development Centre since 1991. He has a bachelor of science degree in agriculture, a masters in crop science, and a PhD in lentil genetics and plant breeding. He currently acts as an adviser to many pulse producers and pulse crop organizations.

Give us your input If you have a milestone you feel should be noted in our regular Gleanings column, please send the information, along with an electronic photo of any individual noted in the item, to Crops Guide editor Gord Gilmour at:





ready or not: countdown to august 1

New challenges Producer cars vulnerable without single desk By Richard KamcheN

Photo credit: L.Larsen/CWBA


estern Canadian farmers who earned significant savings hauling their wheat by rail on producer cars will have far fewer opportunities to do so in an open market. Nearly 12,800 producer cars were loaded in the 201011 crop year — the second-highest total in recent history — with about 97 per cent of those shipments being Canadian Wheat Board grains. The reason for the lopsided percentage is simple: The CWB fit producer cars into its sales program. It secured car supply, arranged their transportation with the major railways, and ensured the port terminals accepted them. In so doing, farmers loading producer cars saved $600 to $1,600 per car in handling charges. Post single desk, direct shipments to port may dry up, as they did with canola. “The last time we saw big moves in canola was back in a time when there were futures contracts deliverable at the port,” says Mark Hemmes, president of Canada’s grain-handling and transportation monitor Quorum

Corporation. “They fixed that by changing those futures contracts to be delivered in country.” Although farmers have a right to producer cars under the Canada Grain Act, shipments are tied to sales. “The difficulty of that was you couldn’t find anybody who would handle the sale because the canola shippers would want it into their own (country) facility,” says Tim Coulter, president of the Producer Car Shippers of Canada. “Because of that, now most people just haul right into the crushers or the elevators,” says Coulter. Adrian Measner, who worked 32 years at the CWB and served as its president and CEO from 2003 to 2006, says there are opportunities for producer cars in the new environment, but not near the opportunity that existed before: “The wheat board operated the total marketing program and they accommodated producer cars, no matter what grade, because they fit into that overall umbrella marketing program.” Without the CWB’s support, how does the producer Continued on page 12 CROPS GUIDE







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ready or not: countdown to august 1

Continued from page 9 who loads his own car get his wheat shipment accepted at, say, the West Coast? The grain companies that own the terminals will reject them as the practice causes them to lose elevation and cleaning fees in the countryside, Coulter says. But Barry Prentice, professor of supply chain management at the University of Manitoba, believes terminal owners would be loath to turn away business, especially in a more competitive environment. “Most of the grain companies make their money at the terminals; they don’t make it in the country. So would they refuse that extra handle at the ports? I can’t think so,” Prentice says. Murray Fulton at the University of Saskatchewan agrees to an extent. “I could see a Viterra saying we have extra capacity right now, we would entertain a bid from the producer facility or one of these other grain companies,” says the professor of agricultural economics, although he adds such an arrangement wouldn’t be their preference. “They will likely say we can earn more money by handling that grain ourselves, so rather than doing this on contract with another company, we might as well have that grain going through our own facilities in the country.” John De Pape is among those who agree producer car shippers will face hard times ahead without CWB support. Their business models were built with the wheat board facilitation in mind, and the new economics will be drastically changed, says the risk management specialist and CWB critic who writes The CWB Monitor. But that doesn’t mean producer cars will have no place in the open market. Mission Terminal has built a business around producer cars and De Pape feels it would be natural for them to continue working with the new wheat board. “You could have the wheat board as sales agent, Mission Terminal as handling agent, working together to take those producer cars. That would only be a portion of what’s going east, but I can’t see why you can’t think outside the box and look at it that way,” says De Pape.

Most of the grain companies make their money at the terminals; they don’t make it in the country. So would they refuse that extra handle at the ports? I can’t think so. — Barry Prentice, Transport Institute, University of Manitoba Mission typically takes 4,000 producer cars a year but those numbers will decline in the open market, says Measner, the company’s president and CEO. “Our goal is to continue to service producer cars, but they’re going to have to work within the confines of whatever program we have going out of our facility,” says Measner. “We’ll certainly be as accommodating as we can be, but it’s not going to be near to the extent it has been today because we won’t have as large a book as what the wheat board used to operate through the particular port areas.” The CWB and Mission could certainly work together, 12




but a voluntary wheat board will operate on a much smaller scale, and just how viable it will be longer term is uncertain, Measner says. Continued payment and loan guarantees will allow the board to operate for the next four to five years, but beyond that, its survival is dependent on whether it can create a strong balance sheet and demonstrate value to farmers, he says. Besides the wheat board, producer cars may also end up working with grain companies that lack infrastructure. Over 60 grain companies don’t have port facilities, and they may end up partnering with producer car loaders, says Blair Rutter, executive director of the Western Canadian Wheat Growers Association. Hemmes adds that many deals are likely to be made in the next six to 12 months where producer car loaders also market grain to a number of new companies interested in entering the Canadian market. “It’ll all be about the bottom line — if somebody’s looking to buy grain and they don’t have a country elevator system, they’re going to be out there looking to make a deal with somebody who has actually got the ability to efficiently load cars,” says Hemmes. The caveat is that the potential opportunities will be limited to those with wayside storage and loading facilities, not the producers who load single cars at a site with their own augers. “Those opportunities are going to become difficult. Producer loading associated with short lines, there are lots of opportunities with them,” Hemmes says. Measner agrees select companies may be interested in accommodating producer cars, but adds producers will have to adapt to the sales programs of those firms. What that will mean for growers is a more restrictive environment as the grades will be more selective and there will be some weeks they can ship and others they can’t. Producer car loaders may also have opportunities to ship on an identity preserve basis direct to customers, Rutter says: “While the economic incentive’s likely going to be less if shipping a generic wheat to port, there may be opportunities if you’ve got a specific end market in mind.” The problem there may be that farmers might have difficulty guaranteeing a supply of a particular high quality thanks to variable weather, pests, etc., Fulton notes. “Over the entire Western Canada, you could say we can guarantee so many thousand tonnes of a particular crop, but for a group of producers in a particular geographical area, that’s going to be really tough,” Fulton says. “And if you can’t guarantee that, then the buyers just aren’t going to be interested.” De Pape adds that producer car loaders should also look at alternate markets like the U.S.: “It’s not the largest market, but you have to find the markets where they are.” Rutter doesn’t expect to see a whole lot of farmers delivering direct to a U.S. elevator — beyond those within a catchment area — but rather direct movement to U.S. mills and processors who’ll be buying malt barley and milling wheat. But how much can Canadian farmers realistically ship over the border? Typically, only 10 per cent of Prairie wheat goes to the U.S. and 70 per cent is exported. And the American wheat growers won’t warmly receive a sudden rise of Canadian wheat flowing to the U.S., says Doug Chorney, president of the Keystone Agricultural Producers. “We’d certainly see price arbitrage to the point where there’d be no benefit in doing that,” Chorney adds. “If all this wheat was offered up at eight times more than they need, the premiums wouldn’t last very long.” n


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ready or not: countdown to august 1

Fallout Less producer cars could have many implications

By Richard Kamchen


hould producer car loadings indeed fall in the open market, the effects could seep into other areas of the western Canadian grain industry. Many feel deregulation will reduce producer car loadings, which could in turn put tremendous pressure on short line operators who depend heavily on those cars rolling on their tracks. Short lines have already been feeling the pinch from grain companies offering trucking incentives and thereby luring away farmers who might have used producer cars. “We’re losing grain off our lines right now because people are unsure about what’s going to happen,” says Tim Coulter, president of the Producer Car Shippers of Canada. “We’ve got short lines that are pretty close to operating in the red and we can’t afford to lose that.” Roger Gadd, general manager of Great Western Railway, says there’s mixed opinion among operators about the outcome of the open market, which is why Saskatchewan Shortline Railway Association — which he chairs — has been unable to come up with a policy paper on the subject. As producers are the main investors of short lines, their top priority is to haul their grain, making producer cars their No. 1 concern. Gadd would like to see a voluntary wheat board form a buyers’ market along with smaller grain companies. He points out producer cars would be a good fit for any 14




new or existing marketers that have little or no infrastructure. “There’re some people we’ve been talking to about that — it’s confidential right now — but there’re a lot of different companies out there that are looking at producers and our line Great Western Railway. So I’m optimistic. There’re going to be a lot of different companies that are going to look at producers and short lines in particular.” Adrian Measner, who spent 32 years with the Canadian Wheat Board and now heads up Mission Terminal, says one of the areas that needs to be addressed is the competitiveness of producer cars in the new deregulated environment. Most producer cars come off short line railways, and those railways aren’t paid the large multiple car incentives that primary elevator operators receive, putting them at a competitive disadvantage. If that doesn’t get worked out between the short lines and the railways, it won’t matter if a voluntary wheat board, Mission Terminal, or various grain companies want to source grain from producer car loaders. “There’s going to have to be a willingness on the railways’ part to accommodate that,” says Measner. “That doesn’t mean that some won’t still operate and some won’t be prepared to deal on that basis, but it will be a much steeper curve for them.” Nevertheless, Mission Terminal has no plans to sell its stakes in Great Western and Great Sandhills railways in southern Sas-

We’re losing grain off our lines right now because people are unsure about what’s going to happen. — Tim Coulter, president, Producer Car Shippers of Canada katchewan, or southern Manitoba’s Boundary Trails Railway, short lines it uses to source grain for its Thunder Bay and Three Rivers facilities. “We’re in there for the long term. We intend to stay as investors… and be working with those short lines in the new environment as we did in the old one,” Measner says. Coulter wants the Crop Logistics Working Group to provide some answers as to how to protect producer car shippers as he believes Ottawa’s current wait-and-see approach may prevent it from reacting quickly enough should a problem arise. “We only represent four per cent of the industry, we don’t have a lot of clout in the marketplace, we’re just producers out there that are trying to save a buck. And when you look at a small group like that, you defiContinued on page 16

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1/13/12 12:26 PM

ready or not: Countdown to august 1

I’m optimistic. There’re going to be a lot of different companies that are going to look at producers and short lines in particular.” — Roger Gadd, general manager, Great Western Railway

nitely have to have some kind of legislation that protects that.” Barry Prentice, professor of supply chain management at the University of Manitoba, suggests the profitability of operating short lines was bound to fade over time. Branch line rehabilitation of the 1970s embraced high standards, which created railways that could last decades with little maintenance. Short lines were beneficiaries of that quality when they took over the branch lines from major railways. But when repairs started becoming necessary, the economic model started breaking down: when, say, a trestle went down on a crossing, there were cases where the short line was simply truncated right there, as it made more sense to wear out the asset while the capital was there, Prentice says. To keep the lines open and profitable in the open market, operators will need to diversify. “Short lines in general are doomed unless they have something more than grain that they’re hauling,” Prentice says, noting successful U.S. short lines have several products moving on their rails. The picture will become much clearer between now and next August, and while some operators have taken the view they’ll be dead in the water, Gadd believes short lines can indeed survive. He, like Prentice, believes diversification is key and points out Great Western already hauls non-grain products. “In the last few months, we’ve been shipping crude oil. We’re in the middle of the oilfields down here in the southwest. And not only us — crude oil is a big deal with short lines,” Gadd says. Great Western has been hauling at least 100 cars a month of crude oil, and “that’s going to double or triple in the next six months,” he says. The company also has been in the car storage business and is considering hauling aggregate as the Saskatchewan Department of Highways looks to source the material to rebuild the province’s highways. “A lot of the short lines, like Great Western Railway, are right in the middle of a lot of gravel pits,“ Gadd says. “There’re a lot of possibilities out there. I’ve had people ask us about hauling hay, and this is going 16




Photo credit: Charles W. Bohi

Continued from page 14

A crew change on the Great Western Railway near Pontiex, Sask. Uncertainty surrounds short line railways due to changes to the CWB mandate. to the States. So it’s up to every individual short line to go after any business that they can find for their bottom line.” Although Prentice asks why farmers would want to pay for two systems — a road and parallel railway — when they can move grain cheaply by double trailers to elevators, Coulter suggests heavier truck traffic would be an added burden to already crumbling highways. “You take it off the rails and you’re onto a highway and highways are in a state of disrepair now,” says Coulter. “The cheapest way to move grain is by water and by rail. So hopefully we can keep shipping the same way we have in the past somehow.”

DO FARMERS NEED PRODUCER CARS? John De Pape questions the value producer cars will have in an open market. The risk management specialist who pens The CWB Monitor says that outside of the farmers who load their own rail cars and the investors of short lines, the grain industry would be little changed if another producer car was never loaded. “We’re talking about four per cent of the market. And the argument that we need to keep the wheat board because of producer cars is a little shallow. There’re some bigger issues.” One of the reasons producer cars aren’t loading canola is because the amount of money farmers would save avoiding elevation on canola is smaller than it is on wheat thanks to aggressive competition in the country for canola, De Pape explains. In an open market, the competition for wheat will increase, which will shrink wheat elevation costs, which would make producer cars a less appealing option. And even without producer cars in play, grain companies will continue to entice farmers to deliver at their elevators as the

open market will attract new companies who’ll need to source grain: “So you replace producer car competition with other competition,” says De Pape. “At the end of the day, it’s what puts money in the jeans of the farmer,” says Prentice. “If there’s a lower-cost way of doing it, then why should they complain? It’s not like we have a nostalgia for producer cars if they’re no longer needed.” But agricultural economist Murray Fulton of the University of Saskatchewan questions just how much competition will truly increase in the countryside. Real, intense price competition will only occur if there’s an excess of primary capacity on the Prairies and companies Viterra, Cargill and JRI consolidated and reduced it significantly over the last decade. Although new players may arrive in an open market, more consolidation is still possible. Would a Bunge come in and build new facilities, or would they try to buy up some of the existing capacity from smaller grain companies or independent inland terminals?, Fulton asks. Mission Terminal had considered building another elevator, but that was put on hold when it was clear deregulation was coming. Now, Mission expects there will be opportunities to buy existing facilities, according to Measner. Fulton says the only way grain companies will build new capacity is if they believe that longer term, there will be a significant increase in Prairie wheat output. And that isn’t likely given the last major production hike came with the wholesale introduction of zero till, which allowed for cultivation of a considerably larger land base. While some degree of yield increases may continue, there’s no great breakthrough on the horizon that would cause a massive output boost, according to Fulton. n


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roducer-owned inland terminals face a precarious future without a powerful Canadian Wheat Board behind them. “It’s going to change a lot of things in the industry, and ITAC members have been trying to grasp how exactly the changes are going to unwind and what’s going to happen,” says Inland Terminal Association of Canada executive director Kevin Hursh. “Everybody realizes there’re going to be changes; with changes come challenges, also perhaps some opportunities. We haven’t been down this road so it’s still hard to quite understand how some of it’s going to shake out.” ITAC member grain-handling facilities are at least 50 per cent owned by farmers. The 10 Alberta and Saskatchewan members regularly handle over 2.5 million tonnes of grains, pulses, and oilseeds annually, but are heavily reliant on CWB grains. That dependence has reflected wheat board financing and sales programs, which relieved members from numerous risks. Members were paid as handling agents of the board and didn’t need to deal with intermediaries or international buyers as they would have with open-market grains. “Some of them were quite reliant on wheat board financing — they buy wheat board grain and basically get paid for it, so they didn’t have to carry that inventory,” notes Barry Prentice, professor of supply chain management at the University of Manitoba. “Also, they didn’t actually sell the grain, so they had no receivable risk or financing in that regard. Nor did they have staff out there selling grain. So they had a very tight relationship with the wheat board.” “Obviously you now have to finance purchases of wheat, durum and barley that you didn’t have to before,” Hursh says of deregulation. “So that financing cost, that credit availability is something that terminals have to consider, depending on how they structure their business.” Prentice says much of what happens now depends on what the new voluntary 18




CWB does. He believes it would make sense for the wheat board to approach inland terminals owners and propose an ongoing working relationship. “I think the wheat board has an opportunity to go to those companies and say we understand this was our relationship, we understand your business and we’d like to continue to be there,” says Prentice. An obvious added benefit for terminal owners would be if the CWB could lever-

A voluntary wheat board could have a much better chance at surviving if all the producer terminals committed to working with the new agency. But unless farmers are willing to make a similar commitment to producer terminals, the house of cards collapses. And that could potentially mean a lost competitor for buying farmers’ grain. “If there’s ever a sense that farmers aren’t really truly committed and a

Everybody realizes there’s going to be changes; with changes come challenges, also perhaps some opportunities. We haven’t been down this road so it’s still hard to quite understand how some of it’s going to shake out.” — KEVIN HURSH, INLAND TERMINAL ASSOCIATION OF CANADA age government guarantees to allow ITAC members to continue acting as agents for the board. “For a lot of companies, that might be pretty significant that they’ve got the wheat board as a partner to help with inventory financing,“ says Blair Rutter, executive director of Western Canadian Wheat Growers Association, who adds, “a lot of them will have to strike alliances with the wheat board or someone else to help them market their grain.” But whether non-investing farmers would still be delivering to those terminals in an open market is uncertain, according to Murray Fulton, an agricultural economist at the University of Saskatchewan.

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change in price of a few dollars a tonne would cause them to shift their deliveries, then all of a sudden the wheat board can’t count on those sales and they can’t be as aggressive in the marketplace,” says Fulton. “That then heads back into lower prices, and that exacerbates that lack of commitment problem.”

PORT AND RAIL ACCESS ITAC terminals that have always relied on the CWB’s ability to gain access to port face another hurdle. “Now all of a sudden on very short notice they’re put in a position of where they’ve got to make some kind of deal, and a lot of them are going to be hard pressed to do that,” says Mark Hemmes, president

A lot of them will have to strike alliances with the wheat board or someone else to help them market their grain.” — BLAIR RUTTER, WESTERN CANADIAN WHEAT GROWERS’ ASSOCIATION

of Canada’s grain-handling and transportation monitor Quorum Corporation. “It’s a commercial problem for them. But I’m sure a lot of these guys are already talking to people who own terminals and saying can we make a deal?” The farm owners want to know they’ll have continued access without being price gouged for terminal position, says Hursh. But none of that matters if the terminals can’t get the rail cars they order: “We’re big supporters of the Rail Service Review process to try to put a little more equity back into the relationship between shippers and railways,” Hursh says. Level of service could be a problem for these terminals if they can’t get the cars they order, Fulton says. Longer term, producer terminals — and all grain companies for that matter — face a whole new problem with the threat to the revenue cap. “Can they get the kind of price that they find attractive? And I think this is where the rail companies actually hold a fair bit of bargaining power — if they ever get control of that price, they can hold out a lot longer than the grain companies can.” How farmer-owned terminals survive and thrive in the new environment is still highly speculative. Some could be bought out by larger players. Others may

even choose to concentrate on one particular niche. “You could have certain facilities that do one grain specifically — maybe it‘s malting barley,” says Hursh. “Maybe not every facility will service all grains and all producers. They may look for a niche that they can do particularly well within the value chain, and you may see more of that kind of specialization.” Whatever the case, Hursh doesn’t think the whole industry will be taken over by large grain companies. He points out cooperatives and other small players in the U.S. have found a segment in the grain industry. “Even without a Canadian Wheat Board, there should be a place for smaller players servicing producers.” The ones who may be most at risk are in fact the mid-size grain companies with handling facilities, Prentice speculates. “What you see in a mature market is very, very big corporations, very, very small ones, and nobody in the middle. In the case of grain handling, guys who are most at risk are middle-size grain companies,” he opines, explaining it’s firms like Paterson Grain and Parrish & Heimbecker that might be particularly vulnerable to consolidation efforts. ■

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12-01-18 1:57 PM



crop nutrition

Fine balance Getting the most from your phosphorus applications is a complex question By Gord Leathers


hosphorus is one of the crucial crop nutrients that can impact your farm’s productivity — but it’s also one of the trickiest. Too much and you’re wasting both two valuable resources — the phosphorus itself and your money. But too little and you’ll take a yield hit. “Phosphorus is a major input for crop production on the Canadian Prairies and this has been emphasized over the past few years when the phosphorus prices were going very, very high,” says Cindy Grant, an Agriculture and Agri-Food Canada soil scientist out of the Brandon Research Centre. “Because of this, low phosphorus recovery is both a major economic concern and it’s also an environmental concern.” A low recovery rate suggests two things. Not enough of it is getting into the crop or too much of it gets where it’s neither wanted nor needed. Perhaps the question to ask is whether we could apply less and use it better. Grant suggests that when you look at what the crop is taking out of the soil, we’re really not that far off. For example a 45-bushel-an-acre spring wheat crop takes off about 24 pounds of phosphate per acre with an additional 10 pounds taken up and recycled in the residues. Even a 45-bushel-an-acre wheat crop needs about 35 pounds for growth. A 45-bushel-an-acre canola crop removes about 38 pounds and needs about 58 pounds for growth. “So if you don’t have an adequate amount of phosphorus, the crop yield will be reduced,” Grant says. “When we look over at the whole cropping system, not just from year to year but over a complete rotation, you want to balance your input with your offtake.” To maintain the balance and to do it economically a farmer needs to consider: How much do I need? What formulation do I need? How do I apply it? At the heart of all this is what soil guru Nyle C. Brady calls the Phosphorus Problem and it’s outlined in his textbook, The Nature and Property of Soils. “Most of the phosphorus present in the soil is currently unavailable to plants. Also, when soluble sources of this element are supplied to soils in the form of fertilizers, their phosphorus is often “fixed” or rendered insoluble or unavailable.”

Importance If you take a look at DNA, certainly one of the most important molecules in all living things, you’ll notice that the sides of 20




the “ladder” have a phosphate molecule holding it all up. That gives you an idea of how vital phosphorus really is. It’s critical for crop growth because it’s essential for all energy reactions and growth processes within the plant. As with any other nutrient, phosphorus doesn’t just lie around in its elemental form, which is fine because plants can’t absorb it that way. Phosphorus needs to be accompanied by four oxygen atoms in the form of a phosphate. After that, phosphates come in two fundamental flavours: the carbon containing organic phosphates found in decaying plant and animal tissue, and the inorganic phosphates. The inorganic are the ones plants can absorb and they come in two major forms, those that contain calcium and those that contain iron and aluminum. Plants can absorb those that are water soluble, forms that can move across a membrane in a solution, and this is what makes phosphorus a headache. Small changes in soil chemistry may cause small changes in a phosphate. Consequently, some become insoluble and start dragging their molecular heels. So what can a farmer do to get the biggest bang for the fertilizer buck? The first thing to consider is proper placement.

If you don’t have an adequate amount of phosphorus, the crop yield will be reduced. — Cindy Grant, AAFC

“Phosphorus should be banded, period,” Grant says. “Putting the phosphorus near the seed row ensures that the roots will contact the phosphorus granule early in growth. It puts the phosphorus granules near the seed and the largest difference between banded and broadcast application is position. You want to make it positionally available.” The application rate should be high enough that granules are dropped close to the seed and this is especially important in the spring when the soil is cold and the biological processes are slower. The less effort the seed puts forth to get to the granule, the more efficient the use of the fertilizer. This is also true of liquid forms.

Formulations There are a number of different formulations that farmers can use to put phosphorus into the ground. The Prairie standard is MAP, or monoammonium phosphate. The ammonium provides nitrogen and enhances the efficiency of the fertilizer. There are also several fluid forms that work well under the right conditions. Studies from Australia showed that calcareous soils in the Eyre Peninsula reacted very well to fluid phosphorus in just about any formulation including dissolved MAP. It seems that this is because those soils are over 70 per cent calcium carbonate and this colours the ground to a near white. Under those circumstances, the water increased the reaction zone, which was very small with a dry granule. “But similar benefits have not shown up at all in tests that have been done in Manitoba and over most of the rest of the Prairies,” Grant said. “For example, we found essentially identical yields with an ammonium polyphosphate band as compared to a monoammonium phosphate band on a clay loam and a silty clay loam over a number of years at two sites near Brandon.” Avail is a new way of solving the “phosphorus problem” and it’s used as a coating on granules or it may be mixed into a liquid form. The idea behind Avail is to keep calcium, magnesium, aluminum and iron ions away from the phosphate. A phosphate molecule carries around a pretty big negative charge. Since nature likes balance and stability, negatively charged ions like a phosphate molecule like to find a partner, a cation with a positive charge. If that partner happens to be any of the iron, aluminum, manganese or calcium then you’re left with a stable but insoluble molecule that the plants can’t get. Avail keeps these cations at bay so the phosphate remains usable. “Some work that we did in Brandon showed no significant advantage of using Avail either with monoammonium phosphate or in other studies where we used Avail with ammonium polyphosphate,” Grant said. “The products performed well but there’s no advantage in using Avail in the studies that I could pull out over using just the standard.” The Green Revolution saw incredible increases in production and, in the case of soil fertility, this has come with relatively simple chemistry. The problem with soil is that it’s not simple, in fact it’s very complex and can change significantly over the course of one field. As we learn more about the various processes and interactions between plants and the soils they grow in, we may be able to tailor the fertility to fit the acreage. For now, however, the traditional approach may be most cost effective. “Banding starter phosphorus placed close to the seed to optimize crop yield is important, particularly on cold soils and cutting the rate too may not place phosphorus close to each seed,” Grant says. “So band an available form of phosphorus near the seed row at rates that reflect crop removal over the cropping season.” n



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12-01-10 5:15 PM

farm contracts

Legalese Fine print can catch you off guard so understand what you’re signing, farmers urged By Ron Friesen


oes this make sense to you? “The grower shall indemnify and hold harmless (the company), its parents, subsidiaries and affiliates and their directors, employees and agents from and against any liability, damage, cost or expense (including attorneys’ fees) arising from or relating to any actions or omissions of the grower or the grower’s agents or arising from any breach by the grower of any provision of this agreement.” To the average person, this passage may be gobbledygook. But it had better not be to a farmer. It’s a key clause in a standard production contract farmers must sign in order to buy canola seed from a certain Canadian grain company. Do farmers sign such agreements without fully understanding them and their ramifications? It’s a critical question in an increasingly complex and litigious age. Farmers may understand the top end of what they’re signing but perhaps not the fine print. An analogy is a cellphone contract which works fine until the owner runs into a small print issue which may cost him unexpectedly. The same can also be true for agricultural contracts. So what does the above passage mean? Basically, it says that if the farmer does something different from the terms of the contract and things go wrong, he’s on the hook for any losses. The company is not. 24




What could go wrong? Something as simple as inadvertently mingling one kind of seed with another. Here’s what another clause in the same contract has to say about that. “The grower hereby covenants and agrees… to keep the harvested seed production of the crop totally segregated from and free from contamination by other rapeseed or canola without exception and to pay for any and all costs, losses suffered or damages sustained by (the company), whether direct or indirect, consequential or otherwise if such contamination occurs.” In other words, if seed from another canola variety gets mixed in with the contracted variety, however accidentally, the company has the right to sue the farmer. That’s a big red flag which sometimes goes unnoticed, according to Anders Bruun, a Winnipeg lawyer specializing in agriculture. “The potential for liability is huge if the farmer’s not careful,” says Bruun. “He has to be absolutely meticulous.” Also huge is the potential for what might normally be considered invasion of privacy. Bruun notes contracts can enable company representatives to come on the farmer’s yard, demand to see his records, examine his bins, check his equipment, even watch over his shoulder while he tank mixes herbicides. If a farmer feels put upon by all this, he has little recourse. After all, he did sign the

There’s nothing in here that I don’t understand. But then I’m a lawyer. A farmer is not. — Anders Bruun, Lawyer

contract, which normally contains a line at the bottom saying the producer acknowledges having read, understood and agreed to the terms in it. There’s little point in arguing that the average person can’t be expected to understand fine print written in an obscure language. To a legal mind, the fine print is part of the agreement and the language is clear. That’s all that matters. “There’s nothing in here that I don’t understand,” says Bruun after examining a sample contract from a seed company. “But then I’m a lawyer. A farmer is not.” Exactly. A farmer isn’t a lawyer. He may go to a lawyer for advice before inking the contract. But the lawyer may talk the way lawyers often do and the farmer may not understand a word of it. What’s a farmer to do? He needs the seed. So he signs the contract and hopes nothing goes amiss. Because if it does, the law is usually on the company’s side. As a result, farmers sometimes complain the legal deck is unfairly stacked against them. “The company makes up the contract and puts all the rules in,” says Dan Mazier, who farms near Justice in southwestern Manitoba. “It’s very one sided. It’s controlled by the people we’re buying these contracts from.” Mazier speaks from personal experience.

On June 15, 1999, a hailstorm completely destroyed his Roundup Ready canola crop. It was the first time Mazier had ever grown the variety and he was dismayed to learn he still had to pay the technical use agreement fee even though the crop was lost. The company eventually agreed to waive the fee. But the experience still left a sour taste in Mazier’s mouth. “It’s always their option. It’s never the farmer’s option. I think that has to be addressed,” says Mazier. “There’s no one to turn to in these kinds of situations.” Some suggest one way of dealing with the problem could be to borrow an example from the machinery business. In Manitoba, Saskatchewan, Alberta and Ontario, provincially legislated farm machinery boards regulate terms and conditions for contracts between producers and farm equipment dealers. The Manitoba board also rules on applications by lien holders to repossess machinery. The Manitoba Farm Machinery and Equipment Act, which goes back to the early 1970s, was originally designed to provide benchmarks for prices, enforce warranties and protect farmers against seizures. At first, the Manitoba Farm Machinery Board drew up standardized dealer contracts. T:8”

Later, when the act was amended in the 1990s, the board ceased actually writing the contracts. But to this day it still prescribes the terms in contracts which dealers must follow. The Manitoba board will also mediate between farmers and machinery dealers in case of a dispute, says chairman Chuck Balmer. If dealers want to repossess equipment, they must apply to the board first. The board meets every six to eight weeks to rule on applications. Balmer says standardized contracts and mediation help to level the playing field between small farmers and large machinery companies with limitless resources. He sympathizes with farmers who don’t have that opportunity when dealing with grain companies. “Where I see farmers getting caught is that the language of the contract is too complicated, they don’t understand what they’re getting into and consequently they get into a bind.” Keystone Agricultural Producers, Manitoba’s general farm organization, decries what it calls “one-sided liabilities” farmers assume when signing seed company contracts. A resolution passed at a 2010 general Continued on page 26

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Continued from page 25 council meeting directed KAP to encourage farmers to read contracts carefully before signing them and to ask government and industry to “investigate the onerous financial implications to farmers of seed use contracts.” Also in 2010, another council meeting called on KAP to investigate developing a Farmers’ Rights contract “to offset liabilities imposed on producers by multi-national seed company contracts and (to) make it publicly available to farmers across Western Canada to use as they see fit when signing seed company contracts.” Mazier, one of KAP’s two vice-presidents, says the association also




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wants the Manitoba Rural Adaptation Council to fund a study examining grain contracts and how they could be more easily understood by farmers looking to protect their interests. Canola growers are already taking a step in that direction. The 43,000-member Canadian Canola Growers Association recently developed a producer guide for interpreting marketing contracts (e.g., preferred delivery and basis contracts). Intended as an educational tool, the easy-to-read manual aims at helping canola growers demystify legal jargon and understand what contract clauses really mean. Armed with this knowledge, growers may be better able to negotiate more favourable terms with grain companies, says Rick White, CCGA general manager. White calls the manual “a fact-based document that provides information to farmers so they can be better aware of what they’re signing and maybe what they shouldn’t be signing.” Trish Jordan, a spokesperson for Monsanto Canada, questions concerns about farmers not understanding contracts. That’s not her company’s experience, she says. “Do we get lots of feedback from growers saying they don’t understand our contracts? No.” Jordan says farmers today are very knowledgeable about the complicated, sophisticated operations they manage. As a result, she says, they are accustomed to detailed contracts, such as technical use agreements to grow genetically modified crops. “In terms of growers not understanding what they are signing, I don’t think that is true.” As for standardized contracts in the grain industry, Jordan doubts it would work, even if companies agreed to it, because the industry is so complex. “If you’re going to come up with one thing to meet everyone’s needs, I think that is likely unrealistic.” Bruun says he sometimes hears “private grumbling” from farmers about incomprehensible contracts and liabilities stemming from them. But there’s no apparent groundswell of protest. Generally, says Bruun, most contractual transactions proceed smoothly. After all, it’s in a company’s interest to keep customers satisfied and avoid negative publicity. So disputes, if and when they occur, are usually settled privately. But that doesn’t mean there are no issues with contracts in the grain industry. And those issues are not going away. In fact, Bruun suggests, they may be just starting. If and when Roundup Ready wheat comes to Canada, Bruun says producers who may never have signed a technical use agreement in their lives will suddenly have to do so. That’ll lead to new and unfamiliar practices, such as not being allowed to save wheat seed, something farmers have done since the settlers arrived. “There’ll be a whole new range of contracts for farmers to understand,” says Bruun. Which means companies that offer producers “plain language” contracts could have a competitive edge in the marketplace of the future, he adds. ■

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Always read and follow label directions. AgSolutions is a registered trade-mark of BASF Corporation; ARES is a trade-mark, and Clearfield and the unique Clearfield symbol are registered trade-marks of BASF Agrochemical Products B.V.; all used with permission by BASF Canada Inc. © 2012 BASF Canada Inc.

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canola agronomy update

Cleanup Time Cleaning machinery after leaving a field with clubroot is the best way to prevent the transport of spores from field to field. Here are some tips on how to clean machinery and related items, and how much cleaning you may need B y J ay W h e t t e r


lubroot spreads from field to field and farm to farm mainly by the movement of spore-infested soil. Stop infested soil movement, and you can prevent or significantly slow clubroot spread. Infested soil can move in many ways, including by wind and water, but farm machinery is the No. 1 carrier. Cleaning machinery, vehicles and equipment before they leave an infested field is the most important step to prevent clubroot spread. Yes, it does take time and money to properly clean and sanitize farm machinery, but prevention and management for any disease requires an investment. What you’re looking for is a recognizable return on that investment. “Growers may have trouble calculating their return from the time invested to clean the drill or wash the sprayer tires between fields, but the return will be there,” says Clint Jurke, agronomy specialist with the Canola Council of Canada. What does clubroot cost the growers who have it? “The impact of clubroot on canola production in this province has come in the form of reductions in yield and quality, the added premium on purchasing seed of the new resistant cultivars compared to susceptible ones, and the extra costs of things like machinery and equipment sanitation, extending rotations with less lucrative crops, and more frequent and intensive scouting,” says Ron Howard, plant pathology research scientist with Alberta Agriculture and Rural Development. Once clubroot is introduced to a field, it can build up fairly quickly. “It’s difficult to predict how long it could take before clubroot spreads throughout a farm and starts to cause noticeable damage,” says Stephen Strelkov, associate professor and a clubroot specialist at the University of Alberta. “However we have seen particular fields where clubroot went from being a fairly moderate problem to a very severe issue within the span of just a couple of years.” All farms are potentially at risk of clubroot introduction, especially in areas where the disease is well established. Strelkov again: “I think clubroot will continue to spread, particularly if no measures are taken to contain it. While it’s difficult to say if it will be found all across the Prairies, I would not be surprised if it’s found elsewhere in Saskatchewan and is eventually confirmed in Manitoba again.” And once it contaminates a field, clubroot is almost impossible to eradicate. Each time you grow canola, mustard or related susceptible crops on that field, the spore load increases and the risk of a complete wipeout rises. Resistant varieties and rotation can help with management, but preventing clubroot introduction is the ideal management strategy. This is where equipment sanitation comes in.

How to assess your risk It could take four hours or more to do all three sanitation steps (see the box) on a tractor, combine or piece of tillage equipment, but your situation may not require all three steps. The clubroot risk for your location and your individual risk tolerance will determine the best clubroot sanitation practices for you. Your answers to the following questions will help you decide how much sanitation you need and when to use it. 28




Three steps to successful sanitation Before you start cleaning, choose an appropriate worksite. You should clean and disinfect the unit before leaving the field, and leave all con‑ taminated soil in that field. A low‑traffic grassed area near the field exit is an ideal place to sanitize equipment.

Step 1:

Rough cleaning. Use a hand scraper, wire brush and/or compressed air to remove loose and clinging soil and crop debris from openers, tires and wheels. Sweep, blow, scrape or otherwise remove soil and crop residues off of the frame. This should remove at least 90 per cent of the soil from the unit. Time required: one to two hours for a 40-foot cultivator. Larger pieces of equipment, tractors and double disk units may take longer.

Step 2:

Fine cleaning. Use a pressure washer at 2,000-3,000 psi on all areas where soil can accumulate. Turbo nozzles are generally more effective at removing soil than regular nozzles. Addition of an industrial detergent may enhance the degree of soil removal. Hand brushes or compressed air may be more suitable than pressure washing for sensitive instrument clusters, sen‑ sors and other electronic equipment. If in doubt, contact the manufacturer of the equipment. Steps 1 and 2 in combination should remove 99 per cent of soil from the unit. Time required: one to two hours for a 40-foot cultivator. (Two to four hours total for Steps 1 and 2.)

Step 1: A rough cleaning using a hand scraper will generally remove 90 per cent or more of the soil and plant debris from equipment. Source: Ron Howard, AARD

Do you already have clubroot in at least one field on your farm? If yes, then you are at high risk of spreading clubroot throughout your farm on vehicles, equipment and machinery. Thorough sanitation between each field may be warranted. Have you purchased or rented equipment that may have originated in a clubroot-infested area? If yes, make sure the equipment is sanitized before it comes to your farm. Has your equipment or a rental unit been used in fields in infested areas? If yes, it should be cleaned and disinfected before it comes back to your farm. Who has access to your land? Any person or vehicle can potentially spread clubroot-infested soil. Make sure people entering your fields follow clubroot risk mitigation protocols, especially if they have been on another farm recently. Do you use tillage? Tillage or any other farm practice that increases soil disturbance or results in frequent travel throughout a field will increase the risk of transporting clubroot-infested soil to most areas of the field and between fields.

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Recommendations for high-risk areas

Step 2: Once the rough cleaning is complete, go over the unit with a pressure washer to remove the rest of the soil. The rough cleaning combined with careful pressure washing will generally remove 99.9 per cent of the soil, dust and plant debris adhering to surfaces. Source: Ron Howard, AARD

Step 3:

Disinfection. Disinfect all openers, tires and wheels with a one per cent bleach solution or surface disinfectant of equivalent strength. A three-gallon backpack herbicide sprayer will work for this job. All areas should remain wet with the solution for 15–20 minutes. Avoid applying bleach directly onto electronic equipment and non-waterproof electrical connections where corrosion damage is a possibility. Disinfecting in the early morning or in the evening slows evaporation so a second or third application may not be necessary to keep the area wet for the required time. Step 3 alone is not effective. The first two steps are required if you plan to include the disinfection step. Time required: two hours or more for a 40-foot cultivator. (Four hours or more for Steps 1, 2 and 3.)

For growers in an area known to have clubroot, the following steps are recommended to reduce the risk of disease spread: Follow cleaning Steps 1-3, or at least 1-2. (See the box page 28.) This is especially important when leaving a field known to have clubroot. The more soil you clean from the unit and leave behind in the field, the more you reduce the risk of clubroot being spread. For example, by removing 50 per cent of the soil, you remove 50 per cent of the disease risk. Work infested fields last. If a farm has only one field known to have clubroot, by working that field last, growers will reduce the risk of directly transferring contaminated soil from infested to non-infested fields and should have extra time to give drills and tillage equipment a thorough cleaning before being used again. Don’t work fields when wet. Wheels, discs, shovels, shanks and frames caked in mud are that much harder to clean. Ensure that custom operators and anyone else entering your fields follow sanitation protocols. Ask what sanitation practices they use between farms and fields they’re working in. Be responsible. Growers are obligated to inform local authorities and to tell custom operators that clubroot has been discovered in their field. Some municipalities require this by law. In other areas, this is just a common courtesy. Consider posting “Do not enter” signs beside fields known to have clubroot.

Recommendations for low-risk areas

Step 3: Soaking all areas with a one per cent bleach solution should inactivate any remaining clubroot resting spores hidden in cracks and crevices. The bleach solution should remain wet for 15-20 minutes. Reapply as necessary. Source: Ron Howard, AARD





For growers in areas where clubroot has not been found: If in doubt, decontaminate. Do a rough cleaning, at a minimum. If using your own equipment and you know clubroot is not on your farm, the need to decontaminate may not be required. Ask custom operators, oil and gas company operators and anyone else entering your fields where they’ve been. If they have been in a clubroot-infested area, ask about their sanitation protocols and check that the machinery is clean. If they are unsure about the clubroot status of an area that they have just worked in or if their equipment is obviously soiled, you should ask them to clean and disinfect it before entering your field. Make sure used equipment is clean. When buying used equipment, make sure it’s cleaned and disinfected before it leaves the auction site or the farm it comes from. Also check that the transport truck is clean. As a precaution, you may want to pressure wash and disinfect the equipment again when it gets to your farm. Perform this task in a commercial truck wash or on a low-traffic grassed area away from any cultivated soil. n Jay Whetter is communications manager with the Canola Council of Canada.



“This year we’ll use our RTS on more acres, for more jobs.” Regan Crone, Spalding, SK

What can the SALFORD RTS do for you? Regan Crone didn’t buy his RTS for seeding, but to get an early start on his canola acres in May 570 RtS Equipped for Seeding/Fertilizing

2011, he equipped his 41’ SALFORD RTS with a broadcast kit and seeded 600 acres in two days.

Broadcasting at 5 lbs/ac Regan yielded an impressive 62 bu/ac in the RTS seeded ground.

“I used the RTS to give my canola a head start in ground too wet for my precision hoe drill. On top of that, the RTS left even, mellow ground that allowed my anhydrous applicator to pull easier.” Regan will keep using his RTS for fall residue management and seedbed preparation, and this year he plans to fertilize even more ground with his RTS.

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hey say a picture is worth 1,000 words. This issue we’ve sent photographer Ryan Fennessy to visit the Canadian International Grains Institute’s pilot flour mill. It’s a unique facility – likely the only flour mill in the world located on the 11th floor of a modern office building above the bustling downtown core of a major city. It’s also said to be the highest flour mill in North America. CIGI uses the mill to perform small, but commercial-scale, tests of grain for customers and train millers from around the world to better utilize your unique grain like Canada Western Red Spring milling wheat and Canada Western Amber durum. We’ve selected a series of photos that will give you a good overview of the milling process.



1. Whole unprocessed grain enters the facility at the main grain bin, and a metering system controls flow, allowing for the proper operation of the carefully calibrated milling equipment such as these roller mills which are the heart of the milling process and require careful pre-milling preparation of the grain to ensure maximum efficiency.

2. Cyclone units use pneumatic pressure to move material like grain, flour and bran throughout the mill during the process.




3. Prior to the actual milling, various separator units remove foreign material such as barley, weed seeds, plant material and so forth.







5 4. The next stop is the dry stoner, which removes the small stones that inevitably get picked up during the harvest process and can damage equipment.

5. The final pre-milling stage is a tempering conveyor which regulates the moisture level of the grain to ensure uniformity for the milling process.

6. A steel roller mill – in this case one that’s shut down to give us a peek at the insides – then crushes and grinds the grain into the products we’re all familiar with.


7. The milled grain is then sifted and separated into constituent parts like bran, germ and the starchy endosperm commonly known as flour.

8. Further processing and sifting then refines and separates the remaining material so it can be packaged and sold in the case of a commercial mill, or used for further research as is most common with the CIGI facility.



9. The final step is packaging, where product is bagged and stitched. CIGI uses a fair portion of the mill’s products in its own labs for further processing or testing, or ships it to external customers for their own analysis. In the case of a commercial flour mill, the next stop would be a commercial bakery, food processor or grocery store aisle.








Y A D Y M or 1 888-283-6847 or contact your Bayer CropScience representative. Always read and follow label directions. Bayer CropScience is a member of CropLife Canada.


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Crop Protection

Easy savings on pest control B y W a rr e n L i bb y , S a v v y f a r m e r

New Registrations Every month, the Pest Management Regulatory Agency (PMRA) approves the registration of new products or new uses for existing products. Here are some recent registrations to watch for in 2012: • E v e r e s t 2 . 0 H e r b i c i d e — a l i q u i d formulation of Arysta’s popular cereal herbicide; • F oothills NG — all-in-one version of Foothills herbicide that no longer needs a surfactant; • Vector Herbicide Solution — a new brand of glyphosate from the folks at IPCO; • A res Herbicide — for Clearfield canola and Clearfield lentils; • Thionex 50W WSP — a water soluble bag formulation of endosulfan insecticide; • OcTTain Herbicide — new broad-spectrum broadleaf weed herbicide for wheat and barley; • G l a c i e r C o - P a c k — p o s t - e m e r g e n t burndown herbicide for glyphosate-tolerant soybeans; and • W arhawk 480EC — a new chlorpyrifos insecticide from UAP.






t this time of year, pest control is likely not a top-of-mind concern for grain producers, nor should it be. But as the days grow longer, a farmer’s mind naturally turns to spring and how a few more dollars can be squeezed out of next year’s crop. In the spirit of the adage that a penny saved is a penny earned, the input side of the crop equation is an excellent place to look for ways to improve your profitability in the coming year. Regardless of how many acres you farm, pest control is likely your second- or third-biggest operating expense and anything you can do to reduce it goes straight to your bottom line. Fortunately, there are some easy — though often neglected — ways to shave a lot of money off your pest control bill in 2012.

five Proven Ways to Save Money on Pest Control in 2012

1. Choose the Most Cost-Effective Treatment. For most weed control problems, there are dozens of herbicide options that will provide growers with satisfactory results. However, there can be a significant difference in cost between these treatments. Take the time to educate yourself on all the treatments that will control the particular weed populations that you want to manage. Government crop protection guides can help with this as can software specifically designed to sort through the various options. For example, if you are targeting post-emergent control of wild oats, green foxtail, cleavers, kochia, and hemp nettle in your durum wheat, there are 68 different treatments that will do the job. The cost of these treatments, however, ranges from about $15 to $40 per acre. The more expensive treatments will likely control many additional weeds. But, if these are not pres-

ent in your field, why pay to control them? On 2,000 acres of durum, the difference in cost between the highest- and lowest-priced treatment is over $50,000, or a pretty nice pickup truck. Although, you may not be able to get away with the absolute lowestcost treatment, there’s a good chance most farmers will not require the highest-priced treatment either. 2. G  et the Rate Right. Many products list a range of application rates that vary with the severity of the pest infestation, weather conditions, tank mix partner and stage of growth. These rates have been tested to be effective over a variety of conditions for several years. Unfortunately, modern pesticide labels can be lengthy and difficult to interpret and it may be easier to just estimate the rate or choose the highest one. This, however, can be a costly error. For example, let’s consider ascochyta control in lentils. The rate range for a very popular fungicide treatment is 0.81 to 1.62 litres per acre, which equates to $8.29 to $16.58 per acre. There is no indication on the label as to whether the user should choose the high or the low rate. This decision is left up to the individual grower. You may be able to use the low rate or even a midrate based on your experience or on the advice of a local dealer or agronomist. The savings here can be significant. On 1,000 acres of lentils, assuming two applications per season, the difference in cost between the high and low rates adds up to $16,580. 3. L  ook-Alike Brands. There are generic and private label copies of many of the most popular pesticides sold today and almost all are priced at a discount to their brandname cousins. As an example, glyphosate prices for a 360 equivalent can vary by as much as $1 per litre, depending on which product is chosen. While there may be good reason to choose a more expensive brand with special features, the lowerpriced brand may well do the job in most circumstances — and leave the wallet a bit thicker in the process.

4. D eals. Competition in the pesticide industry will be intense in 2012 and there will be plenty of deals available. Some companies have cut out all programs and offer low sticker prices on their products. Other companies initially price their products higher, but offer very attractive year-end rebates. Although this can make price comparisons extremely difficult, it’s worth taking the time to figure out the bottom line before you make a decision. Don’t be afraid to ask your dealer’s help in figuring out whether the netpriced product or the one with the back-end rebate is the better value. If you make the wrong choice, you could be leaving thousands of dollars on the table. 5. Calibrate the Sprayer. Take the time to go over your sprayer to make sure all hoses are in good condition SEC-MERE11-T-IP_CG.qxd 1/11/12 11:45 from AM Page and to check the output and spray pattern each 1

nozzle. Any nozzles with imperfect patterns or excessive output need to be replaced. And before your first trip to the field this spring, spend a couple hours properly calibrating your sprayer. This is a job where it pays to be especially particular. It’s easy to overlook a five per cent error in application rate, but on 5,000 acres with an average spray cost of $20 per acre, that five per cent error adds up to $5,000 worth of wasted chemicals. That’s a pretty good payback for a couple hours of work. Before long, spring will be here and growers will once again be too busy to worry about things like comparing weed control strategies or reading pesticide labels. Yet, most farmers can save thousands or even tens of thousands of dollars by taking time now to really explore what options are available for 2012. n

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crop Protection

Glyphosate resistance AAFC tests confirm resistance in kochia found in southern Alberta field By Dave Bedard,


ederal ag researchers have found the Prairies’ first confirmed case of glyphosateresistant weeds in populations of kochia in three chemfallow fields in southern Alberta. Weed scientists at Agriculture and AgriFood Canada have confirmed that kochia plants taken from the fields have developed resistance to the broad-spectrum Group 9 herbicide, the active ingredient in Roundup, Touchdown, Credit, Polaris, Vantage Plus and many other weed killers. Unlike some previous findings of glyphosate resistance in Ontario, however, the fields in question don’t appear to have been used regularly to grow glyphosate-tolerant crops, according to Canada’s best-known glyphosate manufacturer. AAFC scientists began this specific investigation last summer in the three fields, where “we saw little-to-no kochia control after (the fields received) multiple applications of glyphosate,” weed scientist Bob Blackshaw said in a media release from Monsanto, maker of Roundup and developer of the Genuity Roundup Ready lines of glyphosate-tolerant crops. The initial findings “prompted us to do further work through the fall and winter that involved collecting samples of seed and completing the necessary grow-out and spraying of plants to confirm resistance,” said Blackshaw, who works for AAFC at Lethbridge. Blackshaw and fellow AAFC weed

researcher Hugh Beckie completed tests on seed samples collected from the fields to validate their findings, testing the survival of the kochia plants at increasing rates of glyphosate, as per standard practice to confirm herbicide resistance, Monsanto said. “What makes this particular case different from some of the previous situations where glyphosate resistance has been confirmed, is that it does not appear to have developed in a Roundup Ready cropping system,” Monsanto said. The suspected weed species, the company said, was found in fields where the “typical crop rotation… does not appear to have included regular use of Roundup Ready crops.” Kochia becomes the third weed species in which populations of plants in Canada have been confirmed as glyphosate resistant. Giant ragweed was confirmed in 2009 and Canada fleabane was confirmed in 2011, both in southwestern Ontario. Farther south, glyphosate-resistant kochia has previously been confirmed in Colorado, Kansas and Nebraska, with suspected cases in South Dakota and the border states of North Dakota and Montana, Monsanto said Wednesday. AAFC’s weed scientists are “continuing their work” on this particular site, the company said. For its part, Winnipeg-based Monsanto Canada said it’s also “supporting the AAFC research effort, which includes providing recommendations to help farm-

ers manage glyphosate-resistant weeds once they are identified and confirmed.” “We have been fortunate in Canada in that this is not a large-scale weed management issue,” Sean Dilk, technology development manager in Monsanto Canada’s crop protection division, said in the company’s release. “But we have increased communication around this topic and we speak to farmers about this more often to lessen the likelihood of resistant weeds developing.” Resistance evolves after a weed population has been subjected to intense selection pressure in the form of a repeated use of a single herbicide, without adequate incorporation of “cultural weed management options,” Monsanto said. The herbicide in question then controls all the susceptible weeds, leaving only resistant weeds to reproduce. “Our history tells us that farmers can, and are, effectively managing the situation with good agronomic practices such as using tank mixes and/or cultural weed control methods,” Dilk said. However, he warned, this particular finding “could present new challenges if it spreads because of the prevalence of Roundup Ready canola and Roundup Ready sugar beets in this region.” Roundup herbicides and Roundup Ready crops have continued to be used in areas where glyphosate resistance has occurred in the past, he noted, “and we have some very knowledgeable people looking into this issue. I am confident in our ability to present good options to the growers in the region.” n

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Victory without the fight. Knock out fusarium before it can land a punch. Raxil® seed treatment is the undisputed choice of growers for superior control of early season diseases in wheat, barley and oats. A powerful systemic fungicide, Raxil MD ensures your cereals get off to a healthy start—without the application struggle. Get Raxil WW in your corner to effectively manage wireworms with the new benefit of Stress Shield™. This spring, protect your investment with the toughest thing in pink. For more information visit T:11.5” or 1 888-283-6847 or contact your Bayer CropScience representative. Always read and follow label directions. Raxil® and Stress ShieldTM are trademarks of Bayer. Bayer CropScience is a member of CropLife Canada.


12-21-2011 9:33 AM CALMCL-DMX7993






SBC.12000.RAXIL.7 Crops Guide Insertion Date: Feb 27, 2012


Western Grains Research Foundation (WGRF) is a farmer funded and directed non-profit organization investing primarily in wheat and barley variety development to benefit western Canadian producers. Through investments of over $57 million WGRF has assisted in the development and release of more than 100 new wheat and barley varieties over the past decade and a half, many of which are today seeded to large portions of the cropland in Western Canada. WGRF also invests in research on other western Canadian crops through the Endowment Fund in fact, since 1981 the WGRF Endowment Fund has supported a wealth of innovation across Western Canada providing over $26 million in funding for over 230 diverse research projects such as this one:

Biowarfare WGRF funding puts a new weapon in the hands of farmers facing a new threat BY VAL OMINSKI


ver the past several years, Tetrastichus julis — a small, stealthy wasp originating from Eurasia — has been moving through cereal fields across southern Alberta, and has now entered Manitoba. An exceptionally successful parasite, it is adept at seeking out its host and eventually killing it. If you grow cereals, should you be concerned about this little creature? On the contrary. Tetrastichus julis is a new-to-the-Prairies biological tool that is effectively controlling another newcomer to this part of the country — the invasive cereal leaf beetle.

Transferring parasitized beetle larvae to the field.

“This paristoid has co-evolved with the cereal leaf beetle and is its natural enemy,” said Dr. Lloyd Dosdall, a University of Alberta professor and researcher who is spearheading a project to spread Tetrastichus julis across the West. “It hammers cereal leaf beetle populations right down,” he said. Introduced to the eastern U.S. in the late 1960s, most likely on live plant material from Eurasia, the cereal leaf beetle moved rapidly across the continent. Spraying heavily was the only control method until U.S. researchers introduced the parasitic wasp. It did so well, Dosdall said, that in Oregon insecticide costs to con-

trol the beetle fell from between $750,000 and $850,000 (U.S.) annually, to almost nothing. The beetle eventually spread into Eastern Canada and British Columbia, making the Prairies virtually the last stronghold in North America to be free of it. In 2005, however, it was found in Alberta. By 2008, its range expanded dramatically throughout southern Alberta, and by 2009, it had spread into Saskatchewan and Manitoba’s Swan River Valley. It was discovered that some infestations of the cereal leaf beetle near Lethbridge had been parasitized (infected) by Tetrastichus julis, most likely from wasps that followed the leaf beetle population up from Montana. However, Dosdall and his colleagues from the University of Alberta and Agriculture and Agri-Food Canada weren’t taking any chances. With funding from the Western Grains Research Foundation, they brought the wasp in from B.C.’s Creston Valley, where it was already established, and used it in Alberta on cereal leaf beetle infestations that weren’t already parasitized. As a biological control method, this one is as good as it gets. An Agriculture and Agri-Food Canada and University of Albertasponsored study has shown that the wasp will not attack any other species — and that includes other beetles that are closely related to the cereal leaf beetle.

Helping establish the wasp The wasp lays its eggs — as many as eight at a time — in cereal leaf beetle larvae, and when the wasp eggs hatch they feed on the larvae, eventually killing them. It is also the beetle larvae that do the most crop damage — and 40




unfortunately it is often a producer’s first instinct to spray when larvae are spotted. However, if the beetle larvae are already parasitized by wasps that have naturally followed the beetle infestation, the wasp eggs will be killed along with the beetle larvae. Dosdall and his team use GPS to track the beetle as it moves east across the Prairies, and have provided provincial specialists in Manitoba with the wasp when an unparasitized infestation was discovered. He urges producers to work with provincial specialists before spraying, to identify cereal leaf beetle infestations and determine whether the larvae have been parasitized. In the first year, it is unlikely that an infestation — even if unparasitized — will do much damage, he said, and patience can pay off with a no-cost control method in the following years. When introducing the wasp to a leaf beetle infestation site, it is most effective to use beetle larvae that contain wasp eggs, Dosdall said. The earlier in the season the parasitized larvae are introduced, the better — WGRF Crops Guide Ad_halfpagefullbleed.pdf 1 11-12-19 10:42 PM so that the wasp can establish itself,

“It hammers cereal leaf beetle populations right down.” — Dr. Lloyd Dosdall, University of Alberta overwinter and attack unparasitized beetle larvae in the spring. For example, when a cereal leaf beetle infestation discovered in Manitoba’s Swan River Valley tested negative for wasp eggs, two shipments of parasitized larvae were distributed early in the 2010 growing season. “We used artists’ paint brushes to transfer approximately 600 of these larvae to wheat leaves in the field,” said Manitoba entomologist Dr. John Gavloski. “It was a timeintensive and delicate procedure, and we didn’t really know what would happen. “In 2011, we found we had a T. julis establishment rate of over 20 per cent — which is excellent in the first year.”

Future uncertain in some areas This type of success is very good news because it appears the cereal leaf beetle is here to stay. In Alberta, a new infestation was

located last summer near Edmonton, but prior to that the beetle had only been found south of the Trans-Canada Highway. “In 10 years, it will be widespread across the Prairies,” Dosdall predicted. “Based on biological and climate needs, we know it can survive.” The future of the wasp, however, is not as certain. “What we don’t know is whether Tetrastichus julis can survive northern Prairie climates, such as those in the Peace River Valley,” Dosdall said. The answer should be quick in coming, though. As part of the biological control project, a PhD student at the University of Alberta, Swaroop Kher, is using climate models to test the wasp’s survival. Researchers should know in several years whether all producers on the Prairies can benefit from the wasp’s efficiency in seeking out and destroying the cereal leaf beetle. ■

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More wheat, less corn; what does this mean for prices?


nalysis of the grain markets can be vast and varied. Technical and fundamental analysis are two of the most popular methods studied by traders, grain and livestock producers and market analysts alike. In this issue, we will take a look at the grain markets from a fundamental perspective, which involve supply and demand.

By David Drozd Senior analyst and president, Ag-Chieve Corporation

Corn As illustrated in the accompanying graphs, the global stocksto-usage ratio, which is at 15 per cent, is as tight as it’s ever been in the past three decades, despite U.S. farmers having produced five of the largest corn crops in the past five years. This prompts the question, “How long will it be before demand outstrips supply and the world runs out of corn?” Thankfully, due to the rationing process, the world will not run out of corn. Higher corn prices have cut into U.S. exports and curbed domestic demand, but 2011-12 U.S. corn ending stocks remain tight at 864 million bushels. A tight global coarse grain scenario is supportive for feed grain prices. Since grain prices realigned to a new higher trading range during the bull market of 2008, the grain markets have experienced not only a higher high, but higher lows as well. In fact, what was once commonly the high prior to 2008, is now proving to be a floor for grain prices.

As an example, for the past few decades corn on the nearby CBOT futures exchange would for the most part trade between $2 and $3 per bushel, with the odd rally to $3.50 or $4. Since 2007, corn prices have remained above $3 per bushel. In the case of wheat at the CBOT, prior to 2007, prices would seldom exceed $4 per bushel. Prices have since remained above $4. This is because demand is increasing along with production and in the case of corn, demand is exceeding the supply, and this is keeping a firm floor under prices.

feed use. Since the summer of 2011, corn prices have been equal to or higher than the price of wheat. This is an anomaly and once it disappears, you can expect the flat price of wheat and corn to soften. The grain markets are currently focused on South American weather. Some private estimates indicate excessive heat and drought in Argentina may have caused irreversible damage to their corn crop. If this proves to be the case, it would be supportive to corn prices until the world rebuilds stocks.

Wheat World wheat ending stocks are at a 10-year high and the global wheat stocks-to-usage ratio is adequate at 31 per cent. With the Black Sea region recovering from the previous year ’s drought, and Australia producing a record wheat crop, there is increased competition in world trade. For this reason, end users are buying wheat hand to mouth and this is weighing on wheat prices and limiting the upside potential. Wheat prices are well off their spring highs, but wheat flowing into the feed grain market is supporting feed wheat prices, which is in turn curbing some of the demand for corn. Corn prices in most years generally trades $.50 to $1.50 per bushel less than the price of wheat at the CBOT. If rationing is required, the spread will narrow to make wheat more affordable for

Without a comfortable cushion to fall back on, the corn market could be very sensitive to weather scares in North America this coming crop year. This would add to the volatility in an already nervous market. Therefore, it may be prudent for grain and livestock producers alike to hedge their feed grains when the opportunity presents itself. n

U.S. Corn Production

Million Bushels

World Corn – Ending Stocks/Usage Ratio

How long will it be before demand outstrips supply and the world runs out of corn?

Crop Year Beginning Most Recent: 14.763% as of 01/12/2012





Source: CME Group The Hightower Report

Updated: January 12, 2012

Source: CME Group


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A good investment Many farmers. Many benefits.

Craig Goodmundson farms near Wynyard, SK. This is his experience. “We made the decision to try JumpStart on some of our crops for a two-year period and we liked the results… The seed that was treated with JumpStart seemed to have better emergence and do very well initially, and then on through the rest of the season… In my opinion it’s a good investment. We’ve used it faithfully here since our initial trials with it, and I just don’t see putting a crop in without it.” To put JumpStart to work on your farm, see your local retailer.

“I just don’t see putting a crop in without it.”

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©2011 Novozymes. 2011-28070-01

Craig Gudmundson Wynyard, SK



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