THURSDAY, OCTOBER 27, 2011
VOL. 89 | NO. 43 | $3.75
HOG INDUSTRY | MAPLE LEAF
Maple Leaf changes show bright future SERVING WESTERN CANADIAN FARM FAMILIES SINCE 1923
CWB | CHANGE COMING
GERRY RITZ FEDERAL AG MINISTER
BRITA CHELL CWB
We will see a fundamental shift Reading the tea of marketing power and leaves | Experts wealth away from prairie ess farmers and into the hands predict what comes after the CWB of huge, foreign-based companies. BY ED WHITE ALLEN OBERG
The Canadian Wheat Board oard and supporters of its monopolyy say the ian grain entire Winnipeg and Canadian led up by trade would likely be gobbled WB goes. foreign companies if the CWB dian grain Many players in the Canadian industry think the board is vastly overrating its importance. But most agree that within a couple years after the end of the marketing monopolies it will become clear whether an independent Canadian industry will exist or if foreign multinationals will take over. “I think we’re going to be in for some major, major change here overr n the next couple of years,” said Adrian Measner, chief executive officer off Mission Terminal, owned by Soumat, and a former chief executivee officer of the Canadian Wheat Board. “I think you’ll find (multinationall grain companies) a lot more activee h and I think we’re going to go through a period of rationalization here overr the next two to three years.” University of Manitoba agriculturall n economist Ed Tyrchniewicz, a grain industry analyst, said he thinks thee changes will be more a form of evolution than devastation. SEE WHAT HAPPENS NEXT, PAGE 2
Winnipeg expansion shows commitment to industry, say hog marketers BY ED WHITE WINNIPEG BUREAU
Farmers should be happy that Maple Leaf Foods is re-engineering its meat processing system, hog marketers and analysts say. Even though it is closing a number of plants — including a bacon plant in North Battleford, Sask. — its choice to build Winnipeg into a world-competitive plant and its modernization of the Saskatoon operation shows there will be demand for prairie pigs in Brandon for years to come, they say. “It looks like Maple Leaf is committed to Manitoba for the long term,” said Hams Marketing general manager Perry Mohr. That view is shared by Brent Moen, the chair of Alberta’s Western Hog Exchange. “The fact that they’re building a world scale plant and consolidating operations into that plant is good for producers,” said Moen, whose organization sells most of its pigs to Olymel in Red Deer. “It has to be good for our industry. Whether it is Maple Leaf or Olymel or anyone who further processes pork, better plants can create better demand.” Maple Leaf’s massive restructuring has several components: • Shutting plants from Moncton, N.B. to Coquitlam, B.C. • Closing the North Battleford bacon plant, cutting 332 jobs, by the end of 2013. • Shutting the Winnipeg Hot Rod meat stick plant in Winnipeg, losing 27 employees, in late 2014. access=subscriber section=news,none,none
SEE MAPLE LEAF, PAGE 3
The Canadian grain trade has a good asset base and trading ability. There’s certainly life for the grain trade going forward.
I think there will be some companies disappearing here in Winnipeg. What that is depends on how the larger players establish themselves in Winnipeg.
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Pundits speak: what happens next?
There is going to be costs incurred during this crop year. We need to clean up the balance sheet so that we can have a clean starting point at Aug. 1.
We’re cognizant of the fact that this (transition WWW.PRODUCER.COM costs) should not come out of the pools because we don’t want to be saddling farmers with these costs.
OCTOBER 27, 2011 | WWW.PRODUCER.COM | THE WESTERN PRODUCER
INSIDE THIS WEEK
CWB | FROM PAGE ONE
What happens next? “It’s not as huge a deal as people are making it out to be,” said Tyrchniewicz. “There will obviously be adjustments, but I don’t see it on the magnitude of an earthquake.” The projections of the Canadian industry disappearing have been repeatedly made by CWB chair Allen Oberg and by monopoly supporters. Oberg repeated those claims the week the government introduced its monopoly-breaking legislation. “ This government ’s re ckless approach will throw Canada’s grain industry into disarray,” said Oberg. “Canada is the last country in the world where giant multinational grain companies cannot source wheat. If the wheat board’s single desk is abolished, that will change. We will see a fundamental shift of marketing power and wealth away from prairie farmers and into the hands of huge, foreign-based companies.” There is a major difference in how different parties in the debate see the impact of the monopoly’s end on the industry. Monopoly supporters generally believe the CWB, with its complexity and regulatory power, is a crucial lynchpin that forces companies to have a large administrative presence in Canada, or for those companies to not be big players in the Canadian grain industry. They say that is why Canada still has Canadian-owned grain companies such as Richardson International and Viterra, and why Cargill has a big head office in Winnipeg. Without the board’s unique marketing complications, global giants will swoop in, buy up Canadian companies, shut down the head offices and run their Canadian operations out of their global headquarters in other countries. Some global businesses involved in Canadian canola, such as Archer Daniels Midland and Bunge, are not now significant players in Canadian wheat and don’t have Canadian head offices to administer their canola operations. But people in much of Winnipeg’s grain trade say the industry is deeply rooted in Canada, was around for decades before the wheat board was created, and has no interest is selling out or shutting down just because the wheat board goes. “The Winnipeg grain trade right now, the core of it, is Cargill and the Richardsons. They’re not going anywhere,” said Brian Hayward, former United Grain Growers and Agricore United CEO. Hayward said if foreign companies decide to get more involved in the
REGULAR FEATURES Ag Stock Prices Classifieds Events, Mailbox Livestock Report Market Charts Opinion Open Forum On The Farm Weather
HERE’S WHERE TO FIND CWB COVERAGE IN THIS ISSUE: • Who pays to close down CWB operations? P.5 • Bill C-18 gets preliminary approval in Parliament
• Opposition stalling tactics won’t deter the federal gov’t plan P.16
• Debate grows stormy as Bill C-18 introduced in Parliament P.16 • CWB speaks about its concerns over the new bill. Check-off collections will change P.81
Returning home: A community pasture recently sent its cattle home for the winter. See page 26. | PAULA LARSON PHOTO
NEWS Canadian grain trade, they would likely want to have a Canadian subsidiary headquarters. In recent weeks companies including Cargill have created new jobs to handle marketing roles now done by the CWB, and companies Richardson International have hired high level CWB staff. And while the C WB has been shrinking in recent years, small companies have been growing in its shadow, hoping to take over the board’s marketing role. The services to farmers and jobs they provide shouldn’t be ignored, they say. “I started this little company with my husband in our basement and we’ve grown it to a staff of 30 in eight or nine years,” said Brenda Tjaden Lepp, co-owner of FarmLink Marketing Solutions, whose office is only three blocks from the CWB head office in Winnipeg. “We’re providing quite a lot of value to farmers. The wheat board doesn’t have a monopoly on providing marketing for farmers.” Paterson GlobalFoods also thinks the basis of the Canadian grain industry won’t disappear along with the CWB’s monopolies. “We’ve been around 103 years,” said Paterson vice-president Keith Bruch, noting that Parrish and Heimbecker has been around 102 years and the Richardsons for more than 150. “The grain trade has been here a long time. It has deep roots. The Canadian grain trade has a good asset base and trading ability. There’s certainly life for the grain trade going forward.” Measner said he thinks the Canadian based grain trade will continue to exist post-monopoly, but that foreign companies will probably come in and either set up offices or try to buy up Canadian companies. “I think there will be some companies disappearing here in Winnipeg.”
» CWB REFORM: Ottawa says » » »
farmers won’t have to pay wind down costs through the pool accounts. 4 COYOTE CONTROL: Coyote complaints go up in Alberta as lamb flocks get bigger. Vigilance is the key. 14 CWB REFORM: Initial debate was short as the bill to eliminate the single desk was introduced in Parliament. 16 TB TEST: The Canadian cattle industry wants to find a more effective blood test for bovine tuberculosis. 18
» LOW STRESS: Producers » » »
lose $5 every time an animal defecates, which means low stress handling is vital. 20 MANITOBA HOGS: The Manitoba throne speech singles out hog producers and worries the industry. 77 OFF THE MARKET: The Alberta government has again cancelled the sale of native grassland. 80 CWB REFORM: A change in the check-off system is seen as a good opportunity to add feed barley to the mix. 81
CWB REFORM: Proposed changes are worrying some buyers of Canadian wheat. 6 AUSSIE WHEAT: High protein wheat could be in short supply from Australia. 7
» SOIL TESTS: Soil sampling is the best way »
to determine a field’s nutrient levels. 22 BIG TARGET: A yield-boosting system produces 117 bushel per acre wheat. 24
» VIDEO SALE: A large dispersal sale in »
Alberta uses video to speed the process. 73 NATURE CONSERVANCY: A B.C. ranch takes steps to preserve its natural grasslands. 74
» WORKERS WANTED: Brandt Group of
Companies has announced it will hire 300 employees in the next 12 months. It is not alone in its need for labour, but finding it can be challenging. 78
FARM LIVING 82
» RURAL CHALLENGE: There is no one answer
A graphic element on page 5 of the Oct. 20 issue should have said that supporters of an all-wheat commission in Alberta believe it could raise $3.5 million a year in checkoffs. The information was correct in the story.
to invigorating rural communities. 82 FOOD DESERTS: Urban agriculture may provide better food choices in big cities. 85
Barry Wilson Editorial Notebook Hursh on Ag Market Watch Animal Health Money in Your Pocket TEAM Living Tips Speaking of Life
10 11 11 9 75 79 83 84
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THE WESTERN PRODUCER | WWW.PRODUCER.COM | OCTOBER 27, 2011
HOG INDUSTRY | FROM PAGE ONE
Maple Leaf changes signal bright forecast • Investing $420 million in two Ontario plants making processed pork and chicken products, creating 757 jobs. • Expanding the Winnipeg bacon, ham and sausage production plant by $85 million and 334 employees. • Expanding the Saskatoon wiener, sausage and lunch meat plant by $45 million, but no additional employees. • Total cost $550 million. Maple Leaf Foods chief executive officer and its biggest shareholder, Michael McCain, said his company needed to scrap old plants and create new, world class ones to compete with plants operating in the U.S. That thinking makes sense to meat market analyst Kevin Grier of the George Morris Centre in Guelph, Ont. A low Canadian dollar allowed Canadian processors to put off investing in state of the art technology for years, but that’s no longer possible. “The processing industry has been behind and they’ve gotten away with it because they could, but more and more product is coming in from the United States (to Canada), and so to compete they have to operate at scale,” said Grier. Canadian packers have long complained about high wages making them less competitive than U.S. packers, but processors have also suffered from operating plants that were built decades ago for smaller production systems. There are only a handful of slaughter plants in Canada, but many processing plants. Mohr said it makes sense for Maple Leaf to consolidate its operations and improve technology at its plants. “They will probably use as much robotics as they possibly can to minimize costs,” he said. In theory, Maple Leaf should be able to pay farmers more for their pigs at Brandon if they can make more money from the sales of pork products made in Winnipeg and Saskatoon and Brampton and Kitchener, Ont. “If this plant does everything that Maple Leaf says it will do, it should free up some money to flow back to producers,” said Mohr. “At the end of the day, it’s useless unless there are pigs to flow through that facility.” Manitoba Pork Council chair Karl Kynoch said farmers and pork processors have suffered for years, so the announcement that Winnipeg’s plant would be expanded and Saskatoon’s modernized put a smile on his face. “Finally, a good hog day,” said Kynoch. “To see Maple Leaf invest $85 million in the Lagimodiere (Road) plant, and the fact that we have the newest processing plant in Brandon, means Maple Leaf is saying we’re here for the long term.” Grier said Maple Leaf’s world scale plant in Winnipeg will match nicely its world scale slaughter plant in Brandon. Moen said farmers are always worried that processors will abandon the industry if they can’t make money, so it is a relief to see long-term capital invested in pork processing. “It shows they are definitely committed to their business,” said Moen. “They should be applauded for that.”
HAY FIRE AT HIGH RIVER
High River, Alta., firefighters watch a trailer of round hay bales that caught fire a few kilometres north of the Highway 2 overpass on Oct. 23. Traffic was slowed because of the heavy smoke from the fire, which burned for hours. | MIKE STURK PHOTO
ELECTION | SASKATCHEWAN CAMPAIGN
Agriculture not election priority Nov. 7 election looms | Crop, hail insurance highlighted by parties in agriculture platforms BY KAREN BRIERE REGINA BUREAU
Farmers and ranchers looking for specific promises from the two main Saskatchewan political parties will have to dig deep into their election platforms. The Saskatchewan Party and the New Democrats released their full platforms last week in advance of the Nov. 7 vote. Neither highlighted agriculture as a main priority. Saskatchewan Party leader Brad Wall said Oct. 24 farmers have been wellserved by his government over the past four years, beginning with loans offered to beleaguered cattle producers just after he took office in 2007. “ The best indicator of future behaviour is past behaviour,” he said. The Saskatchewan Party platform lists expanded agricultural extension offices, the Farm and Ranch Water Infrastructure program and taking over administration of AgriStability as evidence of the government’s commitment to farmers. Improvements made to crop insurance after a review in 2008 were long overdue, Wall said, and the unseeded
BRAD WALL SASKATCHEWAN PARTY LEADER
acreage benefit was boosted from $50 to $70 per eligible acre this year to help those who were flooded. Wall said he has a good relationship with prime minister Stephen Harper and has obtained support for producers when needed. “People can expect more of that from us should we be fortunate enough to form the government,” he said of his track record. The Saskatchewan Party platform said it will continue to improve crop insurance programs and “other services” for farmers and ranchers. The document also contains an allocation of $1 million to establish an institute for global food security at the University of Saskatchewan. The NDP is promising to improve
crop insurance by spending $50 million per year to reintroduce spot loss hail coverage. Leader Dwain Lingenfelter has talked about the change since taking over the leadership in 2009. Spot loss hail was eliminated in 2002 by the then-NDP government. “It’s one of the issues that I still hear farmers talk about,” he said last week. “Upon election, we’ll start the rigorous debate with Ottawa about how the spot loss hail will be implemented.” The NDP platform document also promises to extend crop insurance coverage to market gardeners and to offer more relief for wildlife damage. The current crop insurance program already offers 100 percent compensation for wildlife damage. The party reiterated its support for the Canadian Wheat Board. The platforms for the Green and Liberal parties don’t make any agricultural promises. The Progressive Conservatives oppose allowing pension funds to invest in Saskatchewan farmland and “would ensure that the growth of farmland limited partnerships do not become a threat to the viability of
DWAIN LINGENFELTER NEW DEMOCRATIC PARTY LEADER
our family farm base or the economic health of our rural communities.” Nominations closed Oct. 22 with 191 candidates in the 58 constituencies. The Saskatchewan Party, NDP and Green party are running full slates. The Liberals are running nine candidates, the Progressive Conservatives are running five and the Western Independence Party two. A Regina man is running as an independent in Regina Qu’Appelle Valley. The number of candidates is down from 239 in 2007, mainly because the Liberals fielded candidates in all constituencies in that election. Leader Ryan Bater said the decision was made to focus attention on his seat in The Battlefords. access=subscriber section=news,none,none
OCTOBER 27, 2011 | WWW.PRODUCER.COM | THE WESTERN PRODUCER
CANADIAN WHEAT BOARD | EXPENSES
Tallying it up: who pays windup costs? BY SEAN PRATT SASKATOON NEWSROOM
The federal government left lingering questions last week about the costs of moving away from singledesk grain marketing and who will pay the tab. David Anderson, parliamentary secretary for the Canadian Wheat Board, said in a parliamentary debate that farmers “should not be left alone” to deal with the extraordinary costs of winding down the monopoly. He said the government will assist with those costs while being responsible with taxpayer dollars. However, Canadian Wheat Board chair Allen Oberg said that sounds a lot like cost sharing. “That’s what I read into that, which is a very different message than we were hearing from government earlier on.” Oberg said farmers shouldn’t be picking up the costs of an initiative forced down their throats by the federal government. Agriculture minister Gerry Ritz sounded more definitive than Anderson about who will pay the transition costs. “We’re cognizant of the fact that this should not come out of the pools because we don’t want to be saddling farmers with these costs,” he said in an interview. “We want to be sure that the new entity has a chance to survive without carrying a huge mortgage right off the start.” The wheat board has put together estimates in conjunction with KPMG suggesting the transition to a voluntary board could cost as much as $500 million. CWB chief financial officer Brita Chell said the expenses associated with moving from a monopoly controlling 20 million tonnes of grain a year to a much smaller voluntary entity are going to happen quickly. “There is going to be costs incurred during this crop year. We need to clean up the balance sheet so that we can have a clean starting point at Aug. 1.” There will be five categories of expenses: • Renegotiating debt instruments — The new entity isn’t going to access=subscriber section=news,none,none
Farmers and farm group leaders gathered on railroad tracks Oct. 21 to protest recent remarks by prime minister Stephen Harper and to show their support for the Canadian Wheat Board and opposition to legislation intended to eliminate the board’s single desk. The staged the rally near Colonsay, Sask. | WILLIAM DEKAY PHOTOS
need the $1.26 billion in borrowings that was on the books at the end of 2010. There could be costs associated with getting rid of that old debt and negotiating new loans, depending on market conditions. • Renegotiating operational contracts — Arrangements such as terminal agreements and freight contracts for moving grain through the Great Lakes were
negotiated when the CWB was a much bigger entity. “We aren’t going to have that kind of volume in the future,” said Chell. “We will have to either get out of those contracts or renegotiate those contracts, and as with anything there’s always penalties and costs associated with that.” One big contract that may have to be renegotiated is the deal with Algoma Central Corp. to spend $65
million on the construction of two new ships. Chell said the new voluntary CWB may still need the vessels, but there is a chance the contract would have to be broken, which again would involve penalties. • Liquidation of fixed assets — “In a smaller organization we wouldn’t have a need for all those desks and chairs and big computer systems,” said Chell. The CWB had about $130 million
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worth of computer systems on the books as of July 31, 2010. These are customized systems related to pooling that would be worthless to other companies, so there could be a significant hit to the balance sheet if it had to get rid of them. • Other considerations related to finalizing the pool accounts after July 31 — It will take a few months to wrap things up, which will entail labour and other expenses. • Paying out severance costs and pensions for some of the CWB’s 430 employees who will be losing their jobs. Ritz called the KPMG estimates “staggering in scope” and “unbelievable.” “I don’t think the wind down costs will be anything like what the wheat board is predicting,” he said. A senior Agriculture Canada official who did not want to be identified said the CWB’s estimates were based on the organization ceasing to exist rather than continuing as a voluntary board as envisioned in the legislation. Renegotiating contracts and maintaining some CWB staff would minimize those costs. There may also be discrepancies in what the CWB and the government thinks are reasonable expenditures, such as those related to severance packages. That is why the federal government will be hiring an accounting firm to go through the CWB’s books and developing its own cost estimates. The firm is expected to travel to Winnipeg in the next couple of months.
THE WESTERN PRODUCER | WWW.PRODUCER.COM | OCTOBER 27, 2011
CANADIAN WHEAT BOARD | SECOND READING
CWB estimates $500 million | The federal government will hire an accounting firm to develop its own cost estimate
Tories push through contentious bill BY BARRY WILSON OTTAWA BUREAU
Farmers and farm group officials listen to Bill Gehl, chair of the Canadian Wheat Board Alliance, speak to the crowd.
In the early evening of Oct. 24, the Conser vatives accomplished a decades-long dream for many supporters, winning a parliamentary vote that will lead to abolition of the Canadian Wheat Board monopoly. With 39 MPs not in the House of Commons, the final vote on second reading approval-in-principle for Bill C-18 was 151-118. All opposition MPs opposed it. Conser vative MPs, who hold a majority government, greeted the result with prolonged applause. The bill now will go to a special legislative committee for what is expected to be relatively fast approval. Membership of the committee was to have been announced by Oct. 27. Unlike a standing Commons committee such as agriculture, a special legislative committee typically examines the details of legislation rather than the broad principles. Opposition critics said it was an attempt by the government to exclude witnesses from re-debating the merits or disadvantages of the 68-year-old CWB single desk. The government has vowed to get the bill out of Parliament by midDecember. The legislation would abolish the single desk Aug. 1, 2012, and put the wheat board in the hands of five government-appointed directors. All 10 elected directors will be dismissed when C-18 become law. The final day of debate before the government forced the vote Oct. 24 after just three days included drama, accusations, a crucial ruling by speaker Andrew Sheer and an allegation that prairie Conservative MPs who also produce grain were in a conflict of interest. Winnipeg Centre New Democrat Pat Martin said MPs are bound by a conflict-of-interest code that they are not allowed to take part in debates or Commons votes that could change policy in a way that would benefit them or their families. He said if the Conservatives believe their argument that an end to the board monopoly will improve farmer returns, then they will benefit and should not have voted.
“There’s at least seven, if not more, possibly nine Conservative MPs who are engaged in grain farming or at least their families are at this point that I believe are in direct conflict of interest,” Martin said. He named Alberta’s Ted Menzies, Rob Merrifield, Leon Benoit, Kevin Sorenson and Earl Dresshen, as well as David Anderson and Randy Hoback from Saskatchewan, and said there could possibly be two others. Martin noted that when the Commons debated and voted on a government bailout for the auto industry during the recession, two Ontario Conservatives with car dealerships stood aside from the vote. Conservative MPs that the New Democrat MP pestered about potential conflict either laughed it off or ignored the point. During the final hours of debate, Conservatives challenged the validity of the CWB-sponsored plebiscite that found 62 percent of wheat farmers and 51 percent of barley farmers in favour of the single desk. Saskatchewan MP David Anderson, parliamentary secretary on the CWB file, talked about a “little old lady” who approached a politician to say her brother and sister both received ballots but they were dead. He said opposition MPs should not give “credence to such a flawed survey.” Meanwhile, Scheer cleared the way for the evening vote earlier in the day when he ruled against Liberal Wayne Easter, who had argued that the bill was illegal because the government is not following the rules requiring a farmer vote in the CWB Act. C-18 will abolish the CWB Act. Scheer sided with government arguments that governments have the right to amend or abolish legislation passed by a former government. He cited a parliamentary authority to make his point. Peter Hogg’s volume on parliamentary rules says: “Not only may the Parliament or Legislature, acting within its allotted sphere of competence, make any law it chooses, it may repeal any of its earlier laws,” Hogg wrote. “This citation rightfully underscores Parliament’s continued right to legislate,” ruled Sheer. access=subscriber section=news,none,none
CANOLA | HARVEST
Harvest canola despite green seed, says agronomist Avoid overwintering in field | Scavenging rodents hurt yields and mould reduces grain quality BY SEAN PRATT SASKATOON NEWSROOM
Growers waiting for green seed counts to drop before harvesting canola should rethink that approach, says the Canola Council of Canada. The only way that will happen is if rain and humidity lift canola moisture back above 20 percent. But if moisture levels get that high there is a good chance the crop would not dry down again enough to harvest before snowfall. “The best bet would be to harvest
the crop now to maintain the yield and quality that’s there and start looking for buyers,” said Kristen Phillips, agronomy specialist with the council. “If canola stays in the field all winter, high green seed counts won’t be your only quality issue.” Canola that overwinters is often downgraded to sample due to mould damage and free fatty acids in the oil. There are also yield losses from shelling, rodents and a drop in bushel weight. Growers who have already com-
bined canola with high green seed counts should consider marketing the crop as soon as possible. “Early delivery is ideal because canola with a higher percentage of green seeds tends to spoil faster,” said Phillips. Discounts for high green seed counts are not as high as discounts for heated canola, which can be a real problem for growers storing high green seed canola. Growers should check bins frequently and may need to move the grain around to ensure hot pockets
are identified right away. Daryl Beswitherick, program manager for quality assurance at the Canadian Grain Commission, said the green seed problem is no bigger this year than in a normal year. “There are no alarm bells going off. We talked with the industry. Nobody is real anxious about it that we’ve heard,” he said. Chlorophyll content in the 1,208 samples of No. 1 canola analyzed by the commission as of Oct. 21 was 13.8 milligrams per kilogram, which is above the 12.6 mg/kg in the 2010
harvest but lower than the 15.4 mg/ kg in the 2009 survey. Beswitherick said the number will likely rise because some canola still in the fields in Alberta reportedly contains a lot of green seed. But he doesn’t believe it will reach a level that would be considered beyond normal. Phillips said growers may be able to blend some of their green seed contaminated canola with better quality product but if the level of contamination is too high, the council has a list of companies that buy downgraded product. access=subscriber section=news,crops,none
OCTOBER 27, 2011 | WWW.PRODUCER.COM | THE WESTERN PRODUCER
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MARKETING | BUYERS
Customer opinion mixed on CWB change Foreign buyers in the dark | Some buyers look forward to an open market, others worry quality will suffer order is what you get when you order Canadian wheat,” said Smyth. His customers want concrete evidence that they can count on sourcing the same consistent quality of wheat in a post-single desk environment that they received under the CWB monopoly.
BY SEAN PRATT SASKATOON NEWSROOM
Canadian wheat buyers are expressing feelings that range from neglect and confusion to relief and anticipation in the wake of legislation intended to pave the way for an open market for wheat and barley. Some say they have been left in the dark throughout the process. “This has all been about farmers. I don’t think anyone has talked to customers, which is perhaps a little surprising given that more than three-quarters of Canadian wheat is exported,” said Jeffrey Smyth, president of Database Analysts Ltd. Smyth is a Canadian-based consultant who has worked with Japanese food companies for more than 40 years. Japan is Canada’s second biggest export market for wheat. His customers feel abandoned by a process that didn’t include input from foreign buyers and confused about how to proceed come Aug. 1, 2012 when Canada transitions to an open market. Smyth said the way that the change has happened flies in the face of what is taught in Marketing 101. “You usually start with what the customer wants and work your way back as to how to provide it. In this case we seem to be starting from the o t h e r e n d a n d ju s t ma k i n g a n assumption that this is going to be fine with the customers,” he said. There could be repercussions. When a buyer operates in a market characterized by “confusion and no information,” they tend to gravitate to alternative markets that offer certainty and familiarity. “(Buyers) do have other options. There are other people in the world selling wheat,” said Smyth. Gordon Harrison, president of the Canadian National Millers Associaaccess=subscriber section=markets,none,none
DAVID ANDERSON CWB PARLIAMENTARY SECRETARY
Some international buyers want assurances that grain quality will be maintained. | FILE PHOT0 tion, represents a group that is the largest buyer of Canadian wheat. His members like to manage supply and price risk by forward contracting their wheat for up to 12 months. They were concerned they wouldn’t be able to enter into such agreements for the 2012-13 crop year. “We are pleased to see that (Bill) C-18 contains provisions in Part 1 that will allow producers and the rest of the supply chain to do this as soon as the bill receives royal assent. The remaining uncertainty is when that will occur,” said Harrison in an e-mail. He was also pleased with the affirmation that the CWB will retain con-
trol over the marketing of the entire 2011 crop and stocks from prior harvests. “Canadian millers and their customers in particular need this certainty and we are pleased to see that the interests of customers have been recognized in drafting (Bill) C-18 and (in) the minister’s transition plan.” The United States is Canada’s top export market for wheat and durum. The North American Millers’ Association, whose members represent about 95 percent of U.S. milling capacity, is pleased the single desk is being eliminated. “That has been NAMA’s position for more than 10 years,” said the association in an e-mail.
“We must have access to Canadian wheat, regardless of the seller. Currently there is only one seller but we look forward to the day when millers can buy from many sellers. More competition in a free market would be best.” Smyth saw nothing in the legislation addressing the biggest concern for the Japanese food companies he represents; how Canada will continue to provide the best wheat in the world when an organization that had a lot to do with maintaining that quality will have a diminished role. “The Japanese will pay up to 10 percent more for Canadian wheat than wheat that comes from anywhere else in the world because what you
David Anderson, parliamentary secretary for the CWB, addressed that concern during the parliamentary debate surrounding Bill C-18. “It is farmers who grow the grain, not the Canadian Wheat Board. The quality will not change because of the changes we would make,” he said. “The Canadian Grain Commission would continue to provide its services, regardless of who is marketing the grain.” But CWB chair Allen Oberg said quality will be a casualty of the move to an open market. “Over time, we’ll move to an American-type system,” he said. That will mean a shift in focus to quantity from quality. “Everybody out there will just be interested in volumes and making sales.” Oberg said the CWB played a crucial role in maintaining quality by providing customer feedback to the wheat industry, such as their concerns with the Grandin and Alsen wheat varieties. “It was at the wheat board’s insistence that those varieties were pulled out of the system.”
MARKETING | WHEAT
Companies may seek fewer grain classes to simplify handling BY ED WHITE WINNIPEG BUREAU
Farmers might market fewer classes and grades of wheat in a postmonopoly world. Economists and industry players expect the wide waterfront of Canadian Wheat Board wheat divisions to narrow once the board no longer controls the huge western Canadian crop. “The wheat board was obligated to take this grain from farmers. A grain company is not,” said agricultural
ED TYRCHNIEWICZ AG ECONOMIST
economist Ed Tyrchniewicz. “My guess is that there will be pressure to simplify the grading system.” Canada’s grain system has many wheat divisions by class and grade,
far more than most other countries. Experts say that is because the CWB takes control of a vast western Canadian wheat crop and can identify exact amounts of product it has to sell. Even small amounts of specific qualities and grades can be marketed by a large agency that can combine shipments from many sources. However, some analysts say grain companies in an open market will not be able to be sure of supplies that they haven’t yet bought. As well, they might not know for
sure how much of any specific class and quality they can safely contract to a buyer. They also might not want to handle so many different divisions of wheat because it makes grain handling more complex and less efficient. With less security of supply and a high cost of handling small quantities of specific types, companies will probably want to handle fewer, larger divisions of wheat. “There will probably be fewer segregations in the system just because they will be less affordable,” said Uni-
versity of Saskatchewan agricultural economist Richard Gray. University of Manitoba Transport Institute analyst Paul Earl told the recent Fields on Wheels conference in Winnipeg that wheat divisions might become simpler, but wheat would always be a more complex commodity because its end uses are more complex. Wheat millers have more specialized needs than the one simple standard on which crops like lentils and canola are built. access=subscriber section=markets,none,none
CONTINUED ON NEXT PAGE
MARKETS CONTINUED FROM PREVIOUS PAGE
Cam Dahl, a former Canadian Grain Commission commissioner, said a post-monopoly grain system will see farmers contracted to grow specialized wheat. â€œI think youâ€™re going to see more contracts like the Warburtonâ€™s contract, where you have specific mills and buyers in other countries â€Ś contracting for specific varieties,â€? said Dahl. Wheat marketing could become more complex and variety specific, which is not common now.
BARRY SENFT INDUSTRY EXPERT
Barry Senft, a former Canadian International Grains Institute head and former vice-president of Saskatchewan Wheat Pool, said buyers and processors will have the biggest impact on what grain companies choose to buy from farmers. â€œCanada will be tailoring the wheat to fit that particular customer,â€? said Senft. â€œIt depends what the customer wants.â€? The CWB is now required to move all the non-feed wheat that farmers produce. It tries to encourage them to grow types of wheat that buyers want and will pay for, but has to market the grain regardless. However, after the monopoly disappears, no one will be forced to move wheat types or grades for which there isnâ€™t a strong demand or canâ€™t be moved easily. Tyrchniewicz said farmers will need to check with grain companies and marketers about what buyers want them to produce. He also said grain companies will push for the grain commission to drop micro-divisions of quality because they add little value but add much complexity to grain storage and handling. Many farmers prefer multiple wheat divisions because it allows the CWB to obtain premiums for providing buyers with specialized products, but others wish wheat was less onerous to store, market and move. Regardless of what farmers want, Tyrchniewicz thinks grain companies will push hard to make wheat less of a drag on their systems. Other commodities move with far greater efficiency and less cost. â€œOther grain grading systems in wheat are much, much less complicated,â€? said Tyrchniewicz. â€œI think it can be simplified. If other countries can simplify it, why canâ€™t we?â€?
THE WESTERN PRODUCER | WWW.PRODUCER.COM | OCTOBER 27, 2011
MARKETING | FUTURE
Grain companies get contracts ready Forward contracts | Richardson hopes for level playing field with voluntary board BY BRIAN CROSS SASKATOON NEWSROOM
Major grain companies operating in Western Canadaâ€™s new marketing environment say they will waste no time rolling out forward contracting opportunities for producers. Executives with the companies, including Viterra and Richardson International, said they will begin offering forward contracts on wheat, durum and non-feed barley as soon as legislation ending the Canadian Wheat Boardâ€™s marketing monopoly receives parliamentary approval. Federal agriculture minister Gerry Ritz has said the majority Conservative government will ensure that legislation is passed before Jan. 1. If that happens, grain company contracts for the delivery of board grain after Aug. 1, 2012, could be unveiled later this year or early next. â€œThat should be immediate from Viterraâ€™s perspective,â€? said Fran Malecha, the companyâ€™s chief operating officer for grain. â€œI think we will be able to give farmers price signals for Aug. 1 and forward as soon as possible. Weâ€™re kind
FRAN MALECHA VITERRA
of targeting Jan. 1 of the New Year; thatâ€™s assuming that legislation is passed in late December.â€? Malecha said legislation would allow Viterra to use its assets more efficiently and free up capacity. â€œI think we see this as an opportunity to move to the next level of efficiency in moving grain from farmer to end user. We all know that there are times when capacity is constrained â€Ś so the more efficiently we can use that capacity, the better for the whole industryâ€? he said. Jean Marc Ruest, vice-president of Richardson International, offered similar views, saying his company will begin offering contracts for Aug. 1 delivery as soon as legislation receives royal assent. â€œThis path forward has been made quite clear by the government for
some period of time now so weâ€™ve taken the steps required to at least start preparing for that eventuality,â€? he said. Eliminating single-desk selling enables grain companies to manage their facilities more efficiently, leading to better service for farmers and end users, he said. He was surprised the legislation offers government guarantees to a voluntary wheat board for five years. Richardson anticipated it would offer concessions during the transition period, but the five-year term is longer than expected. The fact that the voluntary board will be free to deal in both board and non-board crops such as canola compounds those concerns. â€œWe donâ€™t fear competition from anyone and in fact weâ€™ve welcomed it on the non-board side of things â€Ś but we need to understand or be reassured that â€Ś weâ€™ll be competing against them on an equal footing in a commercial environment and that we wonâ€™t be competing at a disadvantage to this entity,â€? Ruest said. Independent grain broker Allan Johnston of Welwyn, Sask., called the
proposed legislation a welcome change that will attract more investment in Western Canadaâ€™s grain handling, milling and processing. â€œI was just delighted to hear it was happening finally,â€? Johnston said. If legislation is passed, Johnston predicted there will be a learning curve as farmers become accustomed to the new marketing environment. â€œWithin six to 12 months, theyâ€™ll see itâ€™s not going to be any different than marketing your canola, or your flax, or your oats, or your peas, or anything else,â€? he said. Johnston believes the changes will generate more business for his company. He has already been in touch with at least one large American grain broker seeking top quality wheat. â€œWe will almost certainly grow with this opportunity, but thatâ€™s not the reason Iâ€™m supporting (the changes),â€? he said. â€œI just donâ€™t think it (maintaining the single desk) is the right thing to do.â€? He said he has no qualms about the voluntary board or with Ottawa offering financial guarantees. access=subscriber section=markets,none,none
WHEAT | PROTEIN
Protein an issue in Australiaâ€™s large wheat crop BY SEAN PRATT SASKATOON NEWSROOM
Australiaâ€™s early harvest returns suggest high protein wheat could be in short supply in that country. PentAG Nidera Pty Ltd., an Australian grain marketer, said in a recent weekly market report that protein levels in the crop coming off in central and southwestern Queensland have typically been below 12 percent. A lot of the crop only graded Australian Standard White at 10 percent protein, it added. â€œClearly the market is becoming increasingly concerned over disappointing early har vest quality results,â€? said the company. A poor finish to the growing season in northern and central New South Wales and forecasts for more rain in coming weeks in those areas is adding to concerns, PentAG said in its Oct. 19 report.
Bruce Burnett, director of weather and market analysis with the Canadian Wheat Board, has heard similar reports from Australia. â€œFor us it is reasonably good news. It does reduce the supply of higher protein wheat the Australians will have to sell in the upcoming year.â€? Most of Australiaâ€™s quality wheat is produced in Queensland and northern New South Wales. That part of the country is expected to produce a high-yielding wheat crop because of good rainfall during the growing season, but low protein levels often accompany high yields. â€œWeâ€™re hearing that there isnâ€™t an awful lot of 13 percent Aussie wheat,â€? said Burnett. He cautioned that Australia is still in the early stages of a harvest that will last close to six weeks. Signs point to a near record size Australian crop of close to 21 million tonnes. A poor quality Australian wheat
crop would help offset an exceptionally high protein U.S. crop. The average protein content for the 2011 U.S. hard red spring crop is 14.6 percent compared to 13.7 percent last year and a five-year average of 14.2 percent. Global protein premiums collapsed in the wake of the U.S. winter wheat harvest. Burnett doesnâ€™t think a poor quality Australian crop would lead to a recovery in premiums, but it would make it easier to sell high protein Canadian spring wheat. However, there is a limited supply of that type of wheat this year. The average protein content in this yearâ€™s Canada Western Red Spring wheat crop is 13.2 percent, compared to the long-term average of 13.5 to 13.6 percent. Wheat markets will closely watch the Australian harvest to see if growers are in for a repeat of 2010, when late-season rain spoiled the quality
of a great-looking crop. Forecasters say La Nina is making a return, which usually means more wet weather is in store for Australia. â€œEverybody is a little on edge,â€? said Burnett. â€œWeâ€™ll have to monitor the weather pretty closely to see whether Australia has big wet weather problems with their crop.â€? Drew Lerner, president of World Weather Inc., doesnâ€™t expect conditions to be too soggy in eastern Australia. â€œIâ€™m not thinking weâ€™re going to have a huge problem, but we will have some of the late crop that will experience some more wet weather,â€? he said. Harvest weather looks pretty good for the next couple of weeks, but after that Queensland and New South Wales could become wetter. â€œThere will be some more quality issues but definitely not a widespread serious problem,â€? said Lerner. access=subscriber section=markets,none,none
Experience SALFORD VERSATILITY
DOUBLE DISC AIR DRILL
$BMMZPVS SALFORD %FBMFSUP UPEB EBZ Z PS PSWJ WJTJ TJUU
XXXTBBMGPSENBDI IJOF FDPN
0OUB 0O UBSJ UB SJP SJ P $ P $ $BO BOBE BE EB B tt0T 0TDF DFPM PMB B *PX *PXBt
OCTOBER 27, 2011 | WWW.PRODUCER.COM | THE WESTERN PRODUCER
CATTLE & SHEEP Steers 600-700 lb. (average $/cwt) Alberta
GRAINS Slaughter Cattle ($/cwt)
Live Oct. 14-Oct. 20
Previous Oct. 7-Oct. 13
Rail Oct. 14-Oct. 20
Previous Oct. 7-Oct. 13
108.50-112.00 103.93-116.57 n/a 95.00-100.00
107.50-109.50 106.22-116.01 108.25 94.00-98.75
95.45 92.75 n/a 82.50
182.50-185.50 182.00-185.00 183.00 n/a
180.00-182.50 181.00-185.00 n/a n/a
107.25-112.00 102.47-112.56 n/a 93.00-98.00
n/a 99.63-113.01 107.25 93.00-97.75
95.13 91.83 n/a 82.00
184.00-185.50 181.00-184.00 182.00-183.00 n/a
180.00-182.50 180.00-184.00 n/a n/a
Steers Alta. Ont. Sask. Man. Heifers Alta. Ont. Sask. Man.
*Live f.o.b. feedlot, rail f.o.b. plant.
$160 $155 $150 $145 $140 9/19 9/26 10/3 10/7 10/17 10/24
Feeder Cattle ($/cwt)
$135 9/19 9/26 10/3 10/7 10/17 10/24
Manitoba $155 $150 $145 $140 $135 9/19 9/26 10/3 10/7 10/17 10/24
Heifers 500-600 lb. (average $/cwt) Alberta $150
Steers 900-1000 800-900 700-800 600-700 500-600 400-500 Heifers 800-900 700-800 600-700 500-600 400-500 300-400
110-133 120-141 125-149 136-162 148-176 160-200
105-124 120-135 125-146 135-156 145-172 160-192
115-131 125-142 130-151 141-160 150-176 164-200
109-126 115-132 122-146 128-154 148-164 160-179
110-129 115-132 118-140 130-156 140-178 150-188
108-122 115-130 120-140 129-151 138-165 141-176
114-128 120-136 127-143 134-157 145-181 157-193
109-121 116-133 123-140 130-150 140-162 158-181 Canfax
Average Carcass Weight
$135 $130 9/19 9/26 10/3 10/7 10/17 10/24
Oct. 15/11 890 819 665 967
Steers Heifers Cows Bulls
Saskatchewan $145 $140 $135
Oct. 16/10 875 795 674 1014
YTD 11 849 776 674 1013
U.S. Cash cattle ($US/cwt)
$130 $125 9/19 9/26 10/3 10/7 10/17 10/24
Manitoba $145 $140 $135 $130 $125 9/19 9/26 10/3 10/7 10/17 10/24
Slaughter cattle (35-65% choice)Steers National 120.64 Kansas 120.62 Nebraska 120.99 Nebraska (dressed) 190.68 Feeders No. 1 (700-799 lb) South Dakota Billings Dodge City
Steers 137-146 134 136-139
Trend +2/+5 -2/-4 steady/+3
Cattle / Beef Trade
-12.67 -13.76 -13.02 -13.52 -25.32 -25.82 Canfax
Canadian Beef Production YTD % change 1568.5 -11 264.4 -14 1832.9 -11 Canfax
Exports % from 2010 454,274 (1) -33.5 65,940 (1) -63.9 166,831 (3) -23.8 224,426 (3) -20.7 Imports % from 2010 n/a (2) n/a 43,564 (2) +29.2 131,396 (4) +34.7 160,865 (4) +19.5
Sltr. cattle to U.S. (head) Feeder C&C to U.S. (head) Total beef to U.S. (tonnes) Total beef, all nations (tonnes) Sltr. cattle from U.S. (head) Feeder C&C from U.S. (head) Total beef from U.S. (tonnes) Total beef, all nations (tonnes)
(1) to Oct. 8/11 (2) to Aug. 31/11 (3) to Aug. 31/11 (4) to Oct.15/11 Agriculture Canada
$190 $180 $170 $160 $150 9/19 9/26 10/3 10/7 10/17 10/24
Close Close Oct. 21 Oct. 14 Live Cattle Oct 121.93 121.65 Dec 122.15 123.20 Feb 124.80 125.38 Apr 128.90 128.15 Jun 126.65 126.23 Feeder Cattle Oct 139.40 139.90 Nov 142.73 144.43 Jan 147.60 147.48 Mar 148.18 147.83 Apr 148.30 148.25
Trend Year ago
$160 $150 9/19 9/26 10/3 10/7 10/17 10/24
Nov 27-Dec 10 Dec 11-Dec 24 Dec 25-Jan 07 Jan 08-Jan 21 Jan 22-Feb 04 Feb 05-Feb 18 Feb 19-Mar 03 Mar 04-Mar 17 Mar 18-Mar 31 Apr 01-Apr 14 Apr 15-Apr 28
Maple Leaf Oct. 21 155.89-159.59 154.97-158.66 153.12-154.97 154.05-157.76 161.46-164.71 165.63-165.63 162.34-163.32 163.27-164.20 164.66-164.66 165.72-168.04 171.29-174.53
+0.28 -1.05 -0.58 +0.75 +0.42
102.20 101.70 104.18 106.63 103.60
Sltr. hogs to/fm U.S. (head) Total pork to/fm U.S. (tonnes) Total pork, all nations (tonnes) (1) to Oct. 8/11
-0.50 -1.70 +0.12 +0.35 +0.05
111.20 112.55 112.85 113.68 114.40
$360 9/19 9/26 10/3 10/7 10/17 10/24
Barley Sp Select 2-row $395 $390
$375 9/19 9/26 10/3 10/7 10/17 10/24
Wheat 1 CWRS 13.5% $440
$380 9/19 9/26 10/3 10/7 10/17 10/24
Cash Prices Canola (cash - Nov.) $530
Sheep ($/lb.) & Goats ($/head) Oct. 14 Previous Base rail (index 100) 3.65 3.65 Index range 88.51-106.17 93.25-107.06 Range off base 3.58-4.00 3.44-3.91 Feeder lambs 1.60-2.40 1.68-1.80 Sheep (live) 0.40-0.65 0.45-0.50 SunGold Meats
New lambs 65-80 lb 80-95 lb > 95 lb > 110 lb Feeder lambs Sheep Rams Kids
Oct. 17 2.10-2.52 2.07-2.55 1.82-2.11 1.80-2.10 1.40-1.70 1.85-2.30 0.90-1.10 0.89-0.95 70-120
2.15-2.71 2.20-2.50 1.70-2.10 1.80-2.00 1.90-2.05 1.85-2.30 0.90-1.10 0.85-0.95 70-120
Ontario Stockyards Inc.
Oct. 24 Wool lambs > 80 lb.1.68-1.75 Wool lambs < 80 lb. 1.85 Hair lambs 1.55 Fed sheep 0.35-0.60
$490 9/16 9/23 9/30 10/7 10/14 10/21
Canola (basis - Nov.) $0 $-10 $-20 $-30 $-40 9/16 9/23 9/30 10/7 10/14 10/21
Feed Wheat (cash) $215 $210 $205 $200 $195 9/16 9/23 9/30 10/7 10/14 10/21
Flax (elevator bid- S’toon) $540 $535 $530 $525
Sask. Sheep Dev. Bd.
n/a $520 9/16 9/23 9/30 10/7 10/14 10/21
Man. Pork Oct. 21 156.78-160.49 155.85-159.56 153.48-155.85 154.41-158.13 161.85-165.10 166.03-166.03 163.06-163.71 163.98-164.91 165.38-165.38 166.39-168.72 171.98-175.23
To Oct. 15 To date 2011 To date 2010 % change 11/10
Fed. inspections only Canada U.S. 15,799,477 85,087,596 15,945,961 84,667,096 -0.9 +0.5
$205 $200 9/16 9/23 9/30 10/7 10/14 10/21
Canola, western barley are basis par region. Feed wheat basis Lethbridge. Basis is best bid.
Index 100 hogs $/ckg Alta. Sask.
166.20 176.59 *incl. wt. premiums
(2) to Aug. 31/11
Export 773,396 (1) 202,956 (2) 742,226 (2)
Chicago Nearby Futures ($US/100 bu.)
Corn (Dec.) $720
% from 2010 -7.0 -7.4 +3.5
Import n/a 148,631 (3) 161,617 (3)
(3) to Oct. 15/11
% from 2010 n/a +6.4 +12.2 Agriculture Canada
Oct. 24 Avg. Oct. 17 Laird lentils, No. 1 (¢/lb) 29.00-31.25 29.75 29.75 Laird lentils, Xtra 3 (¢/lb) 18.00-23.75 20.58 20.58 Richlea lentils, No. 1 (¢/lb) 28.00-29.75 28.54 29.11 Eston lentils, No. 1 (¢/lb) 28.00-29.75 29.00 29.00 Eston lentils, Xtra 3 (¢/lb) 16.00-20.75 19.50 19.50 Sm. Red lentils, No. 2 (¢/lb) 17.25-20.25 18.71 18.71 Sm. Red lentils, Xtra 3 (¢/lb) 14.00-15.00 14.57 14.57 Peas, green No. 1 ($/bu) 8.50-9.25 8.84 9.01 Peas, green 10% bleach ($/bu) 8.30-8.50 8.47 8.47 Peas, med. yellow No. 1 ($/bu) 8.75-9.00 8.84 8.84 Peas, sm. yellow No. 2 ($/bu) 8.55-9.00 8.76 8.76 Maple peas ($/bu) 9.00-9.75 9.41 8.91 Feed peas ($/bu) 3.50-5.70 4.80 4.80 Mustard, yellow, No. 1 (¢/lb) 34.75-35.75 35.25 35.17 Mustard, brown, No. 1 (¢/lb) 30.75-31.75 31.08 31.08 Mustard, Oriental, No. 1 (¢/lb) 26.40-27.75 27.30 27.30 Canaryseed (¢/lb) 24.75-27.25 26.46 26.68 Desi chickpeas (¢/lb) 27.50-27.75 27.63 27.63 Kabuli, 8mm, No. 1 (¢/lb) 47.00-50.50 49.63 49.63 Kabuli, 7mm, No. 1 (¢/lb) 38.50-40.50 40.00 40.00 B-90 ckpeas, No. 1 (¢/lb) 37.10-39.00 38.53 38.53 Oct. 19 Oct. 12 Year Ago Rye Saskatoon ($/tonne) n/a 195.65 123.45 Snflwr NuSun Enderlin ND (¢/lb) 26.40 26.95 19.35
Oct. 14-Oct. 20 U.S. Barley PNW 295.00 U.S. No. 3 Yellow Corn Gulf 283.16-285.42 U.S. Hard Red Winter Gulf 299.37 U.S. No. 3 Amber Durum Gulf 495.67 U.S. DNS (14%) PNW 389.76 No. 1 DNS (14%) ($US/bu.)Montana elevator 8.55 No. 1 DNS (13%) ($US/bu.)Montana elevator 7.99 No. 1 Durum (13%) ($US/bu.)Montana elevator 12.10 No. 1 Malt Barley ($US/bu.)Montana elevator 6.36 No. 2 Feed Barley ($US/bu.)Montana elevator 4.92 Canadian Wheat Board
Pulse and Special Crops Information supplied by STAT Publishing, which solicits bids from Maviga N.A., Roy Legumex, CGF Brokerage, Parrish & Heimbecker and Walker Seeds. Prices paid for dressed product at plant.
International Grain Prices ($US/tonne)
This wk Last wk Yr. ago 202-204 202-204 184-186
$600 $560 9/19 9/26 10/3 10/7 10/17 10/24
Soybeans (Nov.) $1400
Grain Futures Oct. 24 Oct. 17 Trend Wpg ICE Western Barley ($/tonne) Dec 215.00 215.00 0.00 Mar 220.00 220.00 0.00 May 225.00 225.00 0.00 Jul 225.00 225.00 0.00 Wpg ICE Canola ($/tonne) Nov 522.60 533.70 -11.10 Jan 530.60 544.20 -13.60 Mar 538.90 553.20 -14.30 May 545.80 560.80 -15.00 Jul 551.10 566.20 -15.10 Chicago Wheat ($US/bu.) Dec 6.4250 6.2425 +0.1825 Mar 6.7750 6.5800 +0.1950 May 6.9525 6.8100 +0.1425 Jul 7.0750 6.9675 +0.1075 Chicago Oats ($US/bu.) Dec 3.4100 3.3950 +0.0150 Mar 3.5100 3.4950 +0.0150 May 3.5750 3.5600 +0.0150 Jul 3.6350 3.6200 +0.0150 Chicago Soybeans ($US/bu.) Nov 12.2675 12.5300 -0.2625 Jan 12.3525 12.6050 -0.2525 Mar 12.4475 12.6775 -0.2300 May 12.5175 12.7100 -0.1925 Chicago Soy Meal ($US/short ton) Dec 321.5 323.0 -1.5 Jan 322.9 325.0 -2.1 Mar 326.2 327.3 -1.1 May 328.2 328.1 +0.1 Chicago Soybean Oil (US¢/lb.) Dec 51.79 52.90 -1.11 Jan 52.06 53.18 -1.12 Mar 52.40 53.53 -1.13 May 52.69 53.77 -1.08 Chicago Corn ($US/bu.) Dec 6.5100 6.4050 +0.1050 Mar 6.6225 6.5125 +0.1100 May 6.6800 6.5800 +0.1000 Jul 6.7175 6.6225 +0.0950 Minneapolis Wheat ($US/bu.) Dec 9.1725 8.9575 +0.2150 Mar 8.5425 8.3975 +0.1450 May 8.3350 8.2175 +0.1175 Jul 8.2375 8.1425 +0.0950 Kansas City Wheat ($US/bu.) Dec 7.3500 7.1425 +0.2075 Mar 7.4825 7.3025 +0.1800 May 7.5575 7.3850 +0.1725 Jul 7.6275 7.4575 +0.1700
Year ago 180.00 185.00 185.00 185.00 525.40 535.10 542.10 544.70 543.70 6.7400 7.1225 7.3100 7.4125 3.6500 3.7700 3.8200 3.8700 12.1775 12.3000 12.3725 12.3925 334.6 335.7 337.9 338.6 49.47 49.82 50.17 50.36 5.6875 5.8150 5.8725 5.9075 7.3250 7.4675 7.5525 7.6350 7.2175 7.3725 7.4575 7.5125
Chicago Hogs Lean ($US/cwt)
$150 9/19 9/26 10/3 10/7 10/17 10/24
Hogs / Pork Trade
Barley Sp Select 6-row
$540 9/19 9/26 10/3 10/7 10/17 10/24
St. Lawrence Asking
Est. Beef Wholesale ($/cwt)
Fixed contract $/ckg
W. Barley (cash - Dec.)
Due to wide reporting and collection methods, it is misleading to compare hog prices between provinces.
HOGS Index 100 Hog Price Trends ($/ckg)
Chicago Futures ($US/cwt)
million lb. Fed Non-fed Total beef
To Oct. 15 Fed. inspections only Canada U.S. To date 2011 2,293,621 26,647,207 To date 2010 2,580,320 26,609,981 % Change 11/10 -11.1 +0.1
Montreal Heifers 120.85 120.84 121.92 190.69
Alta-Neb Sask-Neb Man-Neb
YTD 10 846 784 671 1020
Durum 1 AD
CWB T.Bay Domestic Asking Prices
Dec Feb Apr May
Close Oct. 21 89.65 92.03 94.75 99.90
Close Oct. 14 90.08 92.55 94.45 99.10
Trend -0.43 -0.52 +0.30 +0.80
Year ago 70.65 75.93 79.95 85.20
Jun Jul Aug Oct
EXCHANGE RATE: OCT. 24 $1 Cdn. = $0.9970 U.S. $1 U.S. = $1.0030 Cdn.
Close Oct. 21 100.63 99.33 97.58 85.90
Close Oct. 14 100.70 98.95 97.00 84.50
Trend -0.07 +0.38 +0.58 +1.40
Year ago 87.75 86.80 85.90 77.90
$1120 9/19 9/26 10/3 10/7 10/17 10/24
Oats (Dec.) $350 $340 $330 $320 $310 9/19 9/26 10/3 10/7 10/17 10/24
Canadian Exports & Crush (1,000 To tonnes) Oct. 16 Wheat 156.8 Durum 29.8 Oats 27.7 Barley 65.2 Flax 1.4 Canola 240.5 Peas 10.9 Canola crush 115.3
To Oct. 9 207.6 20.0 15.0 4.7 11.3 260.4 12.0 124.3
Total to date 2376.2 537.0 338.0 122.3 50.1 1590.9 534.0 1275.6
Last year 2320.6 900.4 337.0 255.6 64.2 1374.9 625.6 1267.7
THE WESTERN PRODUCER | WWW.PRODUCER.COM | OCTOBER 27, 2011
ECONOMY | WORRIES ABOUT RECOVERY
Fed cattle sales rose to capture price increase
FED PRICE RALLIES The Canfax weighted weekly average fed steer price was $110.15 per hundredweight, up $1.21, and heifers were $110.37, up $1.81. Tight market-ready volume lifted prices, but the rising loonie limited gains. Large volume packages proved desirable because packers were eager to acquire inventory. Some producers opted to ramp up offerings because of the bounce in prices from last week. Accumulated sales totalled 21,198, up 30 percent from the previous week. The cash-to-futures basis has narrowed for three weeks, closing last week at -$13.76. Weekly fed exports to the United States totalled 8,588 head, down 12 percent from the previous week. The strong U.S. fed market provides a solid price foundation to the Canadian market. Tight processing margins and difficulty in getting retailers and consumers to accept higher beef prices could cause packers to reduce slaughter.
COWS WEAKER A better supply of non-fed cattle pressured prices lower. D1, D2 slaughter cows were $62$72 to average $67.11 per cwt., down access=subscriber section=markets,none,none
75 cents. D3s were $52-$68 to average $60.07, down 50 cents. Dressed slaughter cows were $128$132. Butcher bull prices slipped almost $1 lower. Weekly non-fed exports to Oct. 8 fell to 2,988 head.
FEEDERS STRONGER Average Alberta stocker and feeder prices were the highest since October 2001. With harvest mostly concluded and excellent feeder prices, a substantial volume of 400-700 pound calves went to market. Feeders steers on average were up $1.87 per cwt. and heifers rose $2.58. Auction volume was up 67 percent over the previous week. It was only the fourth time that weekly auction volumes were larger than the previous year. Weekly feeder exports to Oct. 8 were light, down three percent from the previous week to 494 head. A good volume of fall calves is expected at auctions and special calf sales. Good buyer interest should continue. Bred cows were $1,250-$1,550.
BEEF LOWER U.S. beef cut-out values traded almost $1 US lower on moderate demand and a light to moderate offering. The Choice-Select spread continued wide but steady at $17.76. The Montreal wholesale market for delivery this week rose to $202-$204 Cdn. Weekly Canadian cut-out values to Oct. 14. saw a wider spread and lower values with AAA cutouts down $1.58 at $173.61 Cdn per cwt. AA cutout was $3.87 lower at $164.71. This cattle market information is selected from the weekly report from Canfax, a division of the Canadian Cattlemen’s Association. More market information, analysis and statistics are available by becoming a Canfax subscriber by calling 403275-5110 or at www.canfax.ca.
China taps on brakes MARKET WATCH
he panic that hit markets in late summer seems to be abating as Europe addresses its debt crisis and monthly data indicates the United States is not falling into a second recession. Stock markets have made up September losses and quarterly corporate profit reports are mostly strong. The loonie is again near par and Brent crude is about $110 per barrel . Can we hope that crop markets will
not be hit again by panic washing in from the wider economy? The relative market calm rests on tentative foundations. The next source of worry might be the economic health of China, the world’s second largest economy. Its gross domestic product grew by only 9.1 percent in the third quarter, the slowest pace in more than two years. That is still spectacular growth compared to mature economies such as Canada and the U.S., but it is a concern for China, where growth was 9.7 percent in the third quarter last year. China actually wanted to cool its red hot economy because inflation had become a huge problem. Markets will keenly study every economic report from the Asian giant to determine whether China’s leaders pilot to a soft landing or over steer into a real slowdown. access=subscriber section=markets,none,none
WP LIVESTOCK REPORT HOGS STEADY Strong pork exports are offsetting the negative effect of seasonally increased hog supply. The U.S. dollar is the weakest compared to the Chinese yuan since 1993, making American pork more attractive to China, which is trying to rein in food inflation. Iowa-southern Minnesota cash hogs delivered to plants were about steady at $69.50 US per cwt. Oct. 21, compared to $69 Oct. 14. Cash U.S. pork carcass cut-out value closed at $99.61 Oct. 21, up from $98.71 Oct. 14. The U.S. federal weekly slaughter estimate was 2.32 million, steady with the previous week. The rising loonie is weakening hog prices in Canada.
Pork cut-out value rises in U.S. Hair lambs lighter than 70 lb. were $187-$214 per cwt., 70-85 lb. were $185-$204, 86-105 lb. were $165$183 and 106 lb. and heavier were $155-$173. Hair rams were $70-$80 per cwt. Cull ewes were $70-$80. Good kid goats lighter than 50 lb. were $200-$237.50. Those heavier than 50 lb. were $200-$235 per cwt. Nannies were $75-$95 per cwt. Billies were $100-$141. Ontario Stockyards Inc. reported 1,584 sheep and lambs and 108 goats traded Oct. 17. All classes of lambs, sheep and goats sold steady.
Machinery of the Past returns to the PFR on Oct. 29 & 30th where the vintage tractor pull at the 2011 Calgary Stampede is featured
Country destinations including a remodelled railway dining car complete with a caboose to overnight in November 5th and 6th
BISON STEADY The Canadian Bison Association said 2010 animals are starting to come to market, which could weaken prices in coming weeks. Grade A bulls in the desirable weight range were $3.85-$4 Cdn per pound hot hanging weight. Grade A heifers were $3.80-$4. Animals older than 30 months and those outside the desirable weight range may be discounted. Slaughter cows and bulls averaged $2.80.
SHEEP REPORT Beaver Hill Auction in Tofield, Alta., reported 1,408 sheep and 134 goats sold Oct. 17. Wool lambs lighter than 70 lb. were $205-$240 per cwt., 70-85 lb. were $186-$226, 86-105 lb. were $175$204 and 106 lb. and heavier were $171-$186. Wool rams were $70-$81 per cwt. Cull ewes were $65-$75 and bred ewes were $160-$190 per head.
Catch up on the latest cropping trends like the successful production of soybeans on the prairies November 12th and 13th
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OCTOBER 27, 2011 | WWW.PRODUCER.COM | THE WESTERN PRODUCER
Editor: Joanne Paulson Phone: 306-665-3537 | Fax: 306-934-2401 E-Mail: email@example.com
PARLIAMENTARY PROCESS | CWB REORGANIZATION
Democratic process lacking in handling of CWB changes
e invite great guffaws of laughter in suggesting that changes to the Canadian Wheat Board deserve more debate. After all, and as federal agriculture minister Gerry Ritz attests, farmers have been debating the merits and activities of the board for more than 20 years. Yet the haste with which the Conservative government is proceeding in the passage of Bill C-18, An Act to Reorganize the CWB and to Make Consequential and Related Amendments to Certain Acts, generates unease. Legislation that will fundamentally change western Canadian grain marketing surely deserves the full benefit of critical thought offered through the usual process. The government has given itself seven weeks of parliamentary time to enact this legislation, which was introduced Oct. 18. Seven weeks to get a complex bill through all phases including the Senate has rarely, if ever, been seen in the Canadian parliamentary process, with the exception of emergency bills such as back to work legislation. Two of those weeks are already gone and the government has committed itself to an aggressive push that has limited debate and raised accusations about abandonment of democratic process. The Conservatives have been clear in their intentions to eliminate the wheat board monopoly. A majority government now makes the intentions possible. Those who suggest farmers were somehow blindsided by the bill’s introduction have little credibility. To use the metaphor recently favoured by Ritz — that train left the station the day after the election and is barreling down the tracks. Likewise, legal challenges that suggest the current majority government cannot change legislation enacted by a previous government hold no water. Canadians elect new governments precisely so that they can change existing legislation. Given those points, the Conservatives have apparently decided that reasonable debate is moot. If that is the case, it’s something of an
insult to the parliamentary process, which, in a perfect world, thoroughly examines proposed bills and raises issues that might require alteration to better serve the public good. Stephen Vandervalk, president of Grain Growers of Canada, which supports the bill, called last week for “calm in a rising storm of rhetoric.” Though that is another train that has already left the station, it does raise a warning that in heat of battle, supporters of the CWB monopoly may ascribe qualities to the board that it in fact has never had, such as protection of grain quality (managed by the Canadian Grain Commission) and the use of producer cars. Any debate about the CWB has always contained rhetoric aplenty and that will never be truer than in the next five weeks. Given the Conservatives’ full-speedahead plan, it may seem futile to complain about the lack of the usual parliamentary process, but there are other areas where the roughshod approach is unworthy. Two cases in point: the decision to send the bill to a special committee rather than the agriculture committee, to expedite passage; and a plan to displace the current CWB board of directors once the bill is passed and replace them with a slate of appointees. Most of the board members are farmers elected by farmers. They know the workings of the CWB better than anyone and they have expertise and farmer input that it seems foolish to squander. Yes, we can hear the whistle of the oncoming train and the government says that train has no reverse gear. Or brakes. It is already too late to recommend a more reasoned and less hasty approach to changes until the costs are better known and effects are better understood. When the train chugs into the station, its passengers will include a new era in western Canadian grain marketing and a bedraggled parliamentary process. Bruce Dyck, Terry Fries, Barb Glen, D’Arce McMillan and Joanne Paulson collaborate in the writing of Western Producer editorials. access=subscriber section=opinion,none,none
I go about looking at horses and cattle. They eat grass, make love, work when they have to, bear their young. I am sick with envy of them. SHERWOOD ANDERSON AMERICAN NOVELIST
A rider drives cattle to new pastures near Minton, Sask. |
CANADIAN WHEAT BOARD | PARLIAMENTARY DEBATE
Iron-fisted Conservatives waste no time pushing through legislation NATIONAL VIEW
ow could the launch of the decisive parliamentary debate on the future of the Canadian Wheat Board have been so tame? True, there was some Conservative cheering and opposition jeering when agriculture minister Gerry Ritz stood, seconded by minister of state for finance Ted Menzies, to table Bill C-18 Oct. 18.
But the next afternoon when debate began as the first step in demolishing the monopoly, there was little emotion on the floor of the House of Commons. For Ritz, who says ending the CWB monopoly led to his entry into federal Reform politics in Saskatchewan in 1993 and then election as an MP in 1997, it sounded like another day at the office. “There were two issues that got me into Parliament way back then,” he said last week. “One was the long gun registry and the other was the wheat board.” But how was he feeling the moment he became the minister to do the deed after all these years? “I’m not saying I’m euphoric or anything like that,” he said hours after debate began. “It is just a good
solid business move for my bottom line and for the other farmers out there.” Can’t you feel the passion? Perhaps it is a Conservative plan to not appear too triumphant, but Prince Albert, Sask., MP Randy Hoback fell off the wagon a bit by telling the Commons it was a great day for farmers. “I am so excited.” In response, opposition MPs were more energized, emotional and rhetorical, but still, the debate at times seemed a bit like listening to a discussion of amendments to clause one, sub-clause two of the Income Tax Act. The debate has been filled with emotion, theatrics, toxic anger and venom since the Palliser Wheat Growers Association first began challenging CWB hegemony and
Saskatchewan Wheat Pool’s support of it in the 1970s. Demonstrations were held on the Prairies last week but none on Parliament Hill, unlike the days of the Crow rate grain subsidy debate in the early 1980s. But in Parliament, despite allegations that Bill C-18 is illegal (from the Liberals) and earlier promises from the New Democratic Party to use “every trick in the book” to delay the bill, there seemed little occasion. Perhaps it is that the arguments have been made, the debate is decades old and there is little new to say. Perhaps it is that both main opposition parties are without permanent leaders and their focus is on leadership (the NDP) or rebuilding
(Liberals). Or maybe NDP critic Pat Martin explained it even as he ridiculed and challenged government defences. “I must admit that there is a feeling of helplessness on this side because the Conservatives have chosen to use their majority to ram this change through to the prairie economic base without even consulting the farmers or allowing them the vote that they are guaranteed through legislation,” he said. Indeed, the majority Conservatives have shown themselves prepared to use an iron parliamentary fist to force it through in almost record time. So barring an unlikely court reversal, the debate is almost over and its end not in doubt. Maybe that’s it. access=subscriber section=opinion,none,none
THE WESTERN PRODUCER | WWW.PRODUCER.COM | OCTOBER 27, 2011
& OPEN FORUM HALLOWEEN | WHAT TO WEAR
SASKATCHEWAN | BOOM
Marketing freedom start of good ag policy Following is an excerpt from a new book by David Seymour of the Frontier Centre for Public Policy, titled Birth of a Boom: Saskatchewan’s Dawning Golden Age. Author’s note: The federal government’s decision to offer marketing freedom to farmers should be welcomed, as I wrote in my book, which was published months before the decision became certain — though it is only one of many policy reforms that would take Saskatchewan from good to great. The central theme behind ending the CWB monopoly, making water rights tradable and opening up farmland to foreign investment is giving the agricultural sector the power to choose its own destiny.
he region that produces half of the world’s traded durum wheat has to import pasta. It has only one pasta factory of its own. Its most important natural resource is not bought and sold on an open market but allocated by a Soviet style system where the government grants allocations based on perceived need. It is illegal for the country’s national pension plan to invest in farms there because some creditors are not residents of Canada. Saskatchewan’s vaunted agricultural sector is a weird and wacky place, or at least its public policy environment is very odd. It is true that Saskatchewan is one of
Market freedom, tradable water rights and allowing foreign investment in farmland would help develop Saskatchewan’s economy. | FILE PHOTO the most important producers of durum wheat in the world, yet it has no pasta factories, while neighbouring North Dakota has five. Many farmers blame the Canadian Wheat Board’s monopoly on marketing Saskatchewan wheat for this and other sad states of affairs. There are no tradable rights for water, and farmers and manufacturers who wish to use water must apply to the (Saskatchewan) Watershed Authority, which then assesses their need and may grant an allocation. It is also true that the Canada Pension Plan is technically banned from buying farmland in Saskatchewan
because some of its creditors, funnily enough including myself, are foreign nationals. Even Canadian organizations cannot invest in Saskatchewan farmland if they have any foreign owners. These policies are not in the spirit of a golden society. All of them increase the importance of political decision-making and reduce the ability of individuals and local groups to use their knowledge and create wealth. Three reforms in agricultural policy would dramatically improve the outlook for agriculture, the industry that gives the province its wheat sheaf emblem.
The first is an end to single desk marketing of wheat and barley by the Canadian Wheat Board, a policy that is not followed elsewhere in the world or even other parts of Canada, and which improvements in communication technology have made an anachronism anyway. The second is the introduction of tradable water rights. Markets and prices would help answer the question of how best to use water, a resource that will only become more valuable as global demand for food rises. An end to restrictions on the purchase of farmland by foreign interests would increase the amount of capital available for developing this important part of the Saskatchewan economy, particularly as retiring baby boomers look to cash out of the sector. The choice for someone who believes in the golden society should be obvious. Ownership restrictions, government water allocation and the single desk are values opposite to what made free trading, individualvaluing Athens, the Islamic golden age and Enlightenment Scotland inventive and prosperous. All of the examples in this book carry that fundamental distinction at their core. Saskatchewan agriculture will not wither in the absence of these policy reforms. Yet all of them would help to make it more productive, diverse and ultimately more interesting. If Saskatchewan is to extend its golden age into agriculture, then these changes would be a good start. access=subscriber section=opinion,none,none
AFTER THE CWB | MARKETING
Where will you sell grain post-marketing board? HURSH ON AG
he new Canadian Wheat Board is going to have a difficult time attracting the business of farmers. Let’s put the passion and vitriol aside for a moment. Barring some surprise in the courts, a voluntary CWB will be in place at the start of the new crop year. Whether you like the government’s direction or you don’t, we will soon be faced with the decision of whether to sell our wheat, durum and barley to one of many private players or whether to do business with the new and voluntary CWB. It won’t be a farmer-run CWB. The farmer-elected directors will be
gone, leaving just five government appointees. This will be a government institution that has up to four years to submit a commercialization (privatization) plan to the government. As soon as the legislation is passed, the private grain trade in competition with the new CWB can begin contracting wheat, durum and barley for delivery after Aug. 1, 2012. To whom are you going to sell? According to the federal government, the voluntary CWB will offer “pooling options to farmers who wish to market in this manner.” Some commentators confuse price pooling and single desk selling. The purported benefit to the single desk is that a single seller should be able to extract a premium from the marketplace. Whether the CWB has truly accomplished that is a matter of hot debate. Price pooling is a result of the marketing system, not part of any tangible advantage. Producers sell into a pool, not knowing what their final price will be. Their delivery opportunities are controlled and they have to
wait a considerable length of time to get all their money. Of course, the CWB has come up with many pricing options to allow farmers to lock in prices and get their money sooner. Hopefully those sorts of options will continue in the new CWB, but the underlying fundamental will still be price pooling. When the act is passed and the farmer elected directors are terminated, expect the organization to be only a shadow of its previous self. Many of the current functions won’t make sense in a competitive environment. And how many people do you employ when you don’t have a clue how much grain you’re going to attract? Will CWB supporters rally behind the new CWB? Farmer control has been lost. The single desk has been lost. And the new entity is the creation of a government dedicated to marketing freedom. Will market choice supporters do business with the new CWB? Theoretically, they should do business with whoever can offer the best price, but in reality the producers who have
fought for market freedom would have to see a big benefit before marketing through a voluntary CWB. The new entity will enjoy government guaranteed borrowing and initial payments, and assuming there is some continuity with the existing CWB, it should have strong marketing connections around the world. The disadvantages include no grain handling facilities, internal turmoil as many employees are lost and all the uncertainty that comes from operating in an entirely different environment. You know how it works when you sell your canola, field peas or lentils to a buyer. That’s how it will work selling your wheat, durum or barley to the private trade. Will a new CWB be able to demonstrate competitive prices and earn your business? It’s doubtful at best. That leads to the next question. How do you commercialize a sinking ship? Kevin Hursh is an agricultural journalist, consultant and farmer. He can be reached by e-mail at firstname.lastname@example.org. access=subscriber section=opinion,none,none
There’s still time to think of timely costumes EDITORIAL NOTEBOOK
JOANNE PAULSON, EDITOR
Will anyone dress up as a single desk?
orry to be mixing my holidays, but I am the Grinch of Halloween. I thought it was fun for about three years when I was dashing around the block collecting bags of candy. Indeed, candy is the only reason for Halloween, in my view. We buy huge boxes of baby Mars bars because they are our favourites, and then eat the leftover ones until Christmas. That being said, I have attended a few Halloween parties in adulthood. From such parties, and the children shrieking at the door, it’s clear that the most popular costumes are related to the top news stories of the year. For example, I think you can count on mini-Moammar Gadhafis trick or treating on Monday, and a Sarah Palin or two may arrive at the more adult shindigs. Some costumes are a little less obvious. Back in about 2003, someone very near and dear to me decided to dress up as a mad cow. He wore little horns stuck to his forehead and a massive rubber glove blown up and strapped to his mid-section. He occasionally wandered around the party room babbling nonsense (mad, you see.) It was udderly ridiculous, but people still remember his costume and tease us about it. BSE was the story of the year back then, agriculturally speaking, so the mad cow outfit chimed with people. To express the obvious, this year’s top story is the removal of the Canadian Wheat Board’s monopoly. One could try to throw on a pair of glasses and mustache, and rent an ostrich for the evening, in an effort to impersonate agriculture minister Gerry Ritz (lore has it he raised the big birds.) It’s unlikely the ostrich would be welcomed in most homes or party rooms, but it would be pretty original. One could fashion a desk — a single desk — with the CWB logo on it, wear it like a sandwich board and pierce it with an arrow or knife. Just be careful how you sit. One could also blow up a copy of the Monopoly board game on a T-shirt, cross out its title and write in Open Market instead. One could have a lot of fun with the little squares, too. It’s probably easier just to wear a sheet or vampire teeth. As for me, I’ll be home with my Mars bars. access=subscriber section=opinion,none,none
OCTOBER 27, 2011 | WWW.PRODUCER.COM | THE WESTERN PRODUCER
OPEN FORUM LETTERS POLICY: Letters should be less than 300 words. Name, address and phone number must be included for verification purposes and only letters accepted for publication will be confirmed with the author. Open letters should be avoided; priority will be given to letters written exclusively for the Producer. Editors reserve the right to reject or edit any letter for clarity, brevity, legality and good taste. Cuts will be indicated by ellipsis (…) Publication of a letter does not imply endorsement by the Producer.
IT’S ABOUT CHOICE
hundreds of news releases every week and they get into print. Why should we who pay for a paper have to see letters to the editor as well? I would say most of the letters to the editor and commentaries sent out from government are written by staff. They should not be printed. Mr. Ritz has also made statements that Australian farmers are better off now that they don’t have a wheat board. My wife and I were in Australia and toured and talked to farmers and we have kept in touch over the years and they tell us they are in worse shape with the Australian Wheat Board no longer in existence. The open market gives more profit to the multinational grain companies. Remember, once that grain is in
their pit you don’t know what price they get when they sell it to the end user. David Bailey, Saskatoon, Sask.
NO GLOOM HERE To the Editor: I was quite surprised to drive out to the country on a late September Sunday afternoon, only to discover that most of the crops in this area had been harvested. I would estimate that at least 85 percent of the crops were threshed. When I asked one older farmer how
this was possible when we had experienced such a wet spring, he took off his Roughrider hat, put it back on with the sunshade pointing upwards and said, “the weather was in our favour.” Contrary to what the predictors of gloom and doom were telling us this spring, everything seems to have worked out OK for farmers in southern Saskatchewan. Most of the crop was harvested dry, yields were average to above average, prices are strong and markets look good. Looking at last spring’s scenario, things didn’t look too promising. In the end, thanks to favourable weather, things are now OK. Maybe if we let the climate surrounding the open markets of the world unfold, the cli-
mate that ultimately controls the price of wheat and other crops, things will work out in everyone’s favour. The harvest scene brought to mind the people predicting gloom and doom if the Canadian Wheat Board goes to dual marketing, usually the same people that predict gloom and doom about everything else. Perhaps positive thought is the commodity that is lacking the most in these people’s lives. In ending, I quote French artist Henri Matisse: “There are always flowers for those who want to see them.” John Hamon, Gravelbourg, Sask.
I grew up on an 80 acre farm in central Alberta. I don’t think I knew much about farming until I moved to my husband’s 8,000 acre farm in southeastern Saskatchewan. Since moving here, I’ve learned how to drive a combine and bring in the harvest, and I’ve learned enough about the Canadian Wheat Board to make an informed decision. You can’t compare the plebiscite that just occurred with a federal or provincial election. In a federal election, every vote is equal, and in that sense, the same goes for this plebiscite. However, that means that my father’s vote has the same weight as my husband’s. My husband is a full-time farmer. It’s his business and his life. My dad is an electrician and a farmer on the side who raises cattle and rents out his cropland, entitling him to vote. If this survey wanted accuracy, some weight should have been given to production, not just one permit book, one vote. My husband and I are expecting a baby in January and we’re both very excited to know that this child will grow up in a country where it’s not a crime for his parents to sell their own wheat and barley as of Aug. 1, 2012. Because it’s not about getting rid of the CWB, it’s about having a choice.
To the Editor:
Amy Hewson, Langbank, Sask.
STOOPING LOW To the Editor: I see that (federal agriculture minister Gerry) Ritz has really stooped low in the gutter. He hints (WP op-ed Sept. 15) that farmers that support the Canadian Wheat Board are linked to communists. It seems to me that it’s just a few years ago that people under communist rule did not get to vote. Now Mr. Ritz won’t let farmers have a say with a vote on wheat and barley. So, Mr. Ritz, are you for democratic rights for the common person or not? Most papers state on their preamble on the editorial page: “open letters not accepted.” This letter that Mr. Ritz wrote was sent word for word to many newspapers. Does this mean that an MLA or MP has more pull than the citizens of Saskatchewan or even Canada? Mr. Ritz is making statements that are not true and should come into question, or not even put into print…. The governments of the day put out access=subscriber section=opinion,none,none
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OPINION WASTE OF ENERGY To the Editor: Re: Sept. 15, WP op-ed by agriculture minister Gerry Ritz. It is such a relief to finally get a clear explanation as to why the Harper government is so fixated on dismantling the Canadian Wheat Board. We should have seen it coming — all the signs are there. The wheat board is a communist plot. Nothing less than scorched earth will do to stamp this menace out. After all, how can you trust people that hire buses to travel long distances to attend meetings? Clearly dangerous people. Next thing you know they will try to market their grain together. Come on Mr. Ritz, your shrill tone and over-the-top rhetoric contributes nothing to the debate, while on the other hand, you call for positive input? …
If the Canadian public doesn’t pay close attention to the tactics of this government on this issue, we are headed for serious trouble. Anti-board people characterize this issue as one of freedom, even human rights. They have never proven their case on economic ground, so this is their trump card. So it’s freedom, you say? When was anyone forced to produce anything for the wheat board? When were machine guns or secret police involved telling you what and when to grow? A load of rubbish. You know when you plant milling wheat, it will sell through the board for export. You have the option to plant all sorts of other crops or not plant at all, or leave this country. This is true complete freedom. By acting as you are, Mr. Ritz, you are taking away my freedom of association with the 62 percent who want a wheat board. If you are really seri-
THE WESTERN PRODUCER | WWW.PRODUCER.COM | OCTOBER 27, 2011
an Wheat Board, voted in favour of protecting the monopoly, a foregone conclusion. When the math is done right, confirmed by Sidney Green, it is in fact only 34 percent of all farmers. However, whatever percentage you want to use, the difference, be it 38 percent or 66 percent of farmers, currently have their freedom of choice taken away under the powers of the monopoly, by those who have voted in favour of retaining the powers of the CWB monopoly. It is also correct that 39.1 percent, or 24 percent of eligible Canadian voters, voted in the Conservative majority, which protects 100 percent of all Canadians their right to freedom of choice. As Canadians, we all have the right to freedom of choice regardless of the government in power. The current Conservative government is the only party that is going to ensure that
ous about positive change with input from co-op minded people, do the folowing: No. 1. Start by backing off your plan to kill the board. No. 2. Replace all appointed directors with elected farmers. No. 3. Pass legislation to guarantee board access to continued federal government credit. No. 4. Make the board truly at arms length from political interference. Maybe then the board can thrive and this waste of energy will end. Don Voss, Spiritwood, Sask.
FREEDOM OF CHOICE To the Editor: It is correct that 62 percent of eligible farmers, deemed by the Canadi-
equal right to those farmers currently being denied their right to freedom of choice. If the 62 percent own 62 percent of the tonnage now controlled by the CWB, what’s their problem? Get on with the new corporation, as they have the majority ownership of the tonnage. If, however, this is not the case, the CWB does not have the right to take away the others’ right to freedom of choice. The CWB chooses not to disclose certain information under the socalled privacy act screen, but they know who owns what percentages of the tonnage of the wheat that they currently have control over, including the 38 percent that want the right to market their own wheat. There certainly is no comparison of the same being equal. Lorne Neyedly, Lockport, Man.
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ave you ever thought about the biblical story of the man who sat by the temple pool in ancient Jerusalem for 38 years but didn’t want to get better? This was a special pool where the water bubbled up from time to time, probably because of a spring that fed it. Many thought the bubbling was the work of angels. They believed this place had mystical healing properties. The sick and lame flocked close around the edge so they could scramble in when the turbulence started. When Jesus visited, his attention was drawn to one particular man who was a pitiful sight. He’d been coming here for 38 years, but hadn’t managed to get into the water. What was wrong? “Do you want to be healed?” Jesus asked. The man bristled with hostility. Everything was the fault of someone else. His grungy sleeping mat and chronic condition had become his crutch. “Come now,” Jesus challenged. “Get up and walk.” And immediately, without thinking, the man got up, picked up his mat and walked. But the healing made him more hostile. If he could walk, more would be expected of him. His complaints and curses were hurled at everyone. His fear held him captive. Jesus offered him the gift of freedom, but he couldn’t accept it. Readers are invited to think of their own fears and to listen to the futility of their own complaints and excuses. Would we be grateful for the healing, or would we be angry because someone dared to take our crutch away? Do we see the opportunities God has given us, or do we cringe with fear? access=subscriber section=opinion,none,none
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Joyce Sasse writes for the Canadian Rural Church Network at www.canadian ruralchurch.net.
OCTOBER 27, 2011 | WWW.PRODUCER.COM | THE WESTERN PRODUCER
COYOTES | POPULATION CONTROL
Trapper teaches producers how to combat coyotes Fences? traps? | Dogs are the best non-lethal coyote control, says expert STORIES BY BARBARA DUCKWORTH CALGARY BUREAU
MORNINGSIDE, Alta. — Coyotes are opportunistic, intelligent and adaptable to urban and rural areas. The more contact they have with people, the less fear they show. As a result, phones at municipal offices are ringing off the hook with complaints about coyote problems throughout Alberta. “My typical calls are in spring calving or in the early fall,” said Dion Burlock, agriculture fieldman with Lacombe County. The lamb flock is growing in the province, as is the number of complaints about coyotes, he told a producer workshop about predators that have developed a taste for Alberta lamb and beef. More complaints are expected as Alberta’s population spreads into traditional wildlife habitat. “As Alberta grows and our acreages expand and as we bring more people into the rural area that really don’t have a background in farming or living on the land, places like Calgary
have a lot more problems than we did in the past,” said Greg McKinnon, a professional trapper who works with livestock producers. Coyotes are listed as a pest under provincial law, and counties can supply poison to producers who have confirmed kills on their property. However, Ken Wick of Alberta Agriculture said poison should be a last resort. Coyotes are excellent hunters but will also eat whatever is available. Parents teach their young how to scavenge and hunt, which tells McKinnon that they can be trained to stay away from certain areas. As well, the animals’ relentless nature means farmers and ranchers cannot give up from one year to the next. “The adults teach the young what is acceptable and what isn’t,” he said. “You can train coyotes to stay away and you have to use every tool at your disposal, whether it is shooting them, whether it is fences or the dogs. Your main focus is to teach those bad coyotes this is unacceptable.… One bad coyote will cause
You can train coyotes to stay away and you have to use every tool at your disposal, whether it is shooting them, whether it is fences or the dogs. GREG MCKINNON PROFESSIONAL TRAPPER
you a lot of grief.” Wick said producers also have to take responsibility to protect their investment. He advises cleaning up garbage around the farmyard, removing dead animals and afterbirth from lambing and calving areas and installing and maintaining fences. Guard dogs that live with the flock work well, as do llamas, donkeys or a horse trained to hate dogs. “Dogs are the best non-lethal coyote control,” said Wick. Electric fences may not be enough of a deterrent. “Coyotes are so smart it doesn’t access=subscriber section=news,livestock,none
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Professional trapper Greg McKinnon demonstrates setting a snare to capture coyotes. The snare consists of unbreakable wire with a spring action. They must be strategically placed to capture the animal properly. The disadvantage is the snare may catch the wrong wildlife or pets. | BARBARA DUCKWORTH PHOTOS
take them long to figure it out.” Producers need a defendable perimeter around their farms, especially in spring when young animals are born. “Every time you see a coyote inside your perimeter, you have to drive him out,” McKinnon said. They will travel up to eight kilometres from the den, and not all are troublesome. “You should focus on the problem animal, not the species, because you are not going to wipe out coyotes,” he said. Producers might also consider hiring a professional trapper who understands predators and has the best tools to eliminate them in a fast
and humane way. McKinnon would like to see a pilot program launched where trappers and producers work together on predator control. “Trappers study and understand the animal and they use their knowledge of the animal in order to capture it,” he said. McKinnon is a retired RCMP member who has been trapping since he was 10 years old. He teaches a 27 hour course to trappers based on a 400 page manual. He prefers modern foothold traps over snares or poison to avoid killing the wrong animals. He uses a foothold trap that does not mangle or cut off the blood supply. Coyotes usually travel at night,
THE WESTERN PRODUCER | WWW.PRODUCER.COM | OCTOBER 27, 2011
COYOTES | CONTROL MEASURES
Lamb producers want compensation Producers hope the new agriculture minister will help find solutions to the predator problem MORNINGSIDE, Alta. â€” Bill Gibson figures the coyote problem in his area is the worst he has experienced in his 35 years in the lamb business. The farmer from Tees, Alta., is frustrated as he tries to match wits with wily coyotes that took 30 lambs and a ewe this year. That is three times his normal loss to predators. â€œThey teach each other to kill and they learn that lamb tastes good,â€? he said. The Alberta Lamb Producers director uses the recommended fencing and six guardian dogs and has a rifle on hand, but it was not enough. He eventually hired a professional trapper that cost $9,200 to control the problem. He and his fellow board members have met with provincial government officials and are preparing briefs for the new agriculture minister, Evan Berger, to find solutions to a costly problem. At the very least, they would
like a compensation program similar to what the other provinces provide. Gibson said the problem worsened since BSE. People used to call a rendering company to pick up dead animals but since 2003 they have been charged a fee. As a result, more farmers are reluctant to use the service and instead leave carcasses outside for nature to take its course. Natural disposal is legal in Alberta, but carrion is a common food source for coyotes, said Dion Burlock, agriculture fieldman with Lacombe County. He works with producers to control problem wildlife such as coyotes, deer, gophers, mice and skunks. Coyotes are designated as pests under the provincial agricultural pests act and pest and nuisance control regulation. The difference between a pest and a nuisance is the method in which they are controlled. A pest is eradicated and a nuisance is
which means itâ€™s important to check traps first thing in the morning. That way animals wonâ€™t be caught for too long and the trapper can shoot them and salvage their pelts. These traps are easy to set up, but it is harder to trick coyotes into stepping on them. McKinnon digs a small hole and drives two metal stakes into the ground to secure the trap, which is carefully buried with a light covering of soil and grass. The bait is set 25 centimetres behind the trap, which a coyote steps into with its front foot when sniffing the bait. Mid fall is the best time to set traps because young coyotes are still relatively naive. Neck snares are spring loaded, unbreakable wire. It is hard to kill them this way because coyotes have tough neck muscles. Snaring also requires a trapperâ€™s permit from the sustainable resource development departmentâ€™s fish and wildlife division. There are 3,000 trappers in the province, who can be contacted through the Alberta Trappers Association.
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nism pounded into the ground. The trigger is set off when a coyote sniffs it, sending a cloud of lethal cyanide into its face. The animals is killed quickly. Alberta once employed two predator control inspectors, but the duties were switched to provincial regulatory services and municipal fieldmen. Seventy-seven counties and municipalities participate in coyote control programs. access=subscriber section=news,livestock,none
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controlled. Burlock said landowners are ex-pected to control pests, but there is no compensation if a coyote destroys livestock. â€œThis program was designed to deal with one or two problem coyotes,â€? he said in an interview during a recent producer meeting in Morningside. Fieldmen are trained to see the difference between predation and scavenging. The county is allowed to provide poison and other advice to get rid of killer coyotes if the case is proved. One option is the sodium monofluoroacetate 1080 tablet, which is hidden deep inside a carcass or chicken head. It is odourless, tasteless and has no antidote. Animals are sent into cardiac arrest and are dead within about two hours. Municipalities can also offer the M-44 cyanide system, which contains a c yanide capsule that is released by a spring-loaded mecha-
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OCTOBER 27, 2011 | WWW.PRODUCER.COM | THE WESTERN PRODUCER
CANADIAN WHEAT BOARD | PARLIAMENTARY DEBATE
Historic agricultural bill sets off House debate Steps to end monopoly | Bill C-18 will eliminate the 10 elected director positions and cover most of the transition costs STORIES BY BARRY WILSON OTTAWA BUREAU
Agriculture minister Gerry Ritz had the first word as he opened debate Oct. 19 on government legislation that will abolish the 68-year-old Canadian Wheat Board monopoly Aug. 1, 2012. It was low-key. “I welcome this opportunity on behalf of western Canadian farmers to open debate on the bill … that would give them marketing freedom very similar to what farmers have been enjoying in Ontario already for some years,” Ritz said. After questions for Ritz from opposition MPs, Winnipeg New Democrat Pat Martin had the second word. His downtown riding houses the CWB head office and he was less low-key. “The bill is a mistake in the making,”
he said. “We are watching a terrible economic mistake unfold before our very eyes. I must admit there is a feeling of helplessness on this side.” So began what will be a short debate on the historic legislation. After just two opposition MPs spoke, the government said it would cut short debate after two more days, ending it Oct. 24, forcing a vote in a Conservative majority Parliament and sending it to a special parliamentary committee for fast consideration. Ritz has vowed to get it through all parliamentary stages and into law by mid-December. The most unexpected clause in the legislation is the one that eliminates the positions of the 10 elected CWB directors when it takes effect, possibly before the end of the year. Instead, the interim CWB will be run by five
government appointees including president Ian White. Bill C-18, An Act to Re-organize the Canadian Wheat Board, sets out a series of steps that will end the wheat and barley monopoly Aug. 1, 2012, abolish the CWB Act that day, provide financial support for the interim voluntary CWB through federal back-stopping of initial payments and board borrowings and create voluntary research checkoffs at point of sale. Business plan approval required Board directors will have to create a business plan by 2016 or sooner on how the CWB can morph into a voluntary private grain company without government support. Government officials last week did not rule out a business plan that in-
cludes a proposal to sell the board business to an existing domestic or international grain company. The CWB will be dissolved by 2017 if the minister of the day does not approve the plan. Ritz also promised that Ottawa will cover most or all “transition” costs such as penalties for cancelled contracts or employee severance so producer pools are not affected. Government officials and Ritz said Ottawa believes CWB estimates of closedown costs of up to $500 million can be reduced. Although it is not in the legislation, the government also promised that it will spend almost $30 million during the next five years to help the Port of Churchill upgrade and continue to be an agricultural commodity export port during the transition. The government acknowledged
that the northern Manitoba port will be affected because the existing CWB has accounted for up to 90 percent of its traffic. The bill says that the voluntary board will be able to acquire property such as elevator and storage facilities during the transition period, but only if the agriculture minister approves. The board is not being offered guaranteed access to facilities owned by future competitors. The legislation says other than the president, directors appointed by the government will be part time and for a four-year term and a maximum of 12 years. The voluntary board would be able to handle all grain and special crops rather than just the wheat and barley for export and domestic human consumption that is in its current mandate. access=subscriber section=news,none,none
CANADIAN WHEAT BOARD | LEGALITIES
Government has power to amend act, Ritz tells critics Producers and farm groups that support the end of the Canadian Wheat Board monopoly are the “real farmers” in Western Canada, agriculture minister Gerry Ritz said last week. As well, he insisted that attempts by opposition MPs and CWB support groups to delay passage of the bill through parliamentary tactics or court challenges will only create market uncertainty for farmers and hurt the chances that the new voluntary CWB will be able to survive. Ritz made his comments in the House of Commons after tabling legislation and in a later interview. During a heated House of Commons exchange Oct. 19 in which the minister defended Bill C-18 that will end the monopoly Aug. 1, 2012, Edmonton New Democrat Linda Duncan listed farm organizations
It’s just a good solid business move for my bottom line and for other farmers out there. GERRY RITZ FEDERAL AGRICULTURE MINISTER
condemning the Conservatives for ignoring the majority of farmers who supported the single desk in a CWBorganized plebiscite. She mentioned Agricultural Producers of Saskatchewan, Wild Rose Agricultural Producers in Alberta, the Canadian Federation of Agriculture and the National Farmers Union as opponents of the government move. “Who exactly is the government representing?” Duncan said.
Ritz was quick onto his feet. “It is unfortunate (Duncan) has not broadened that scope to the real farmers in Western Canada,” he responded. “The western wheat and barley producers, Grain Growers of Canada and the Canadian Cattlemen’s Association all support this initiative that we are moving forward.” He said provincial governments in Saskatchewan, Alberta and British Columbia, which represent more than 85 percent of CWB grain production, also support Ottawa. In a later interview, Ritz said efforts by defenders of the board to delay implementation of the bill beyond the government’s mid-December deadline are only hurting the one they say they love. “The biggest loser would be the new entity itself and they should be
cognizant of the fact that it needs as much time as possible to do contracting in the future and so on. If they are going to give a rejuvenated wheat board a chance at all, they need that kind of framework.” Ritz said in the interview that while he got involved in politics almost two decades ago partly to try to end the CWB monopoly, being the agriculture minister who finally got to table the bill did not make him “euphoric or anything like that. It’s just a good solid business move for my bottom line and for other farmers out there.” He also dismissed claims by Liberals and CWB support groups that the government bill is illegal because it is not following the farmer consultation rules set out in the CWB Act that will be rescinded. “A former government can’t bind a
future government,” said Ritz. Prime minister Stephen Harper has made the same point, and fiery New Democrat MP Pat Martin, who is leading the official opposition fight against Bill C-18 and denouncing it as economic folly and ideological, agreed. “I don’t actually buy the argument that section 47 precludes the current government from amending the act,” he told reporters. “I think the prime minister is right. You would have a constitutional crisis and you would be setting a terrible precedent where every subsequent piece of legislation would have a poison pill that would preclude future governments from ever amending that bill. It’s an impossible scenario.” FOR MORE ON THE CANADIAN WHEAT BOARD, SEE PAGE 81 access=subscriber section=news,none,none
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THE WESTERN PRODUCER | WWW.PRODUCER.COM | OCTOBER 27, 2011
WORTHY WORK After more than 125 years, the Erinview Anglican church located near Shoal Lake, Man., is showing its age. Community members put their skills to work to keep the building safe and warm. | Ed White photos
John Thiessen, front, and Bill Howard work around the windows and fix the crumbling exterior.
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OCTOBER 27, 2011 | WWW.PRODUCER.COM | THE WESTERN PRODUCER
CATTLE | DISEASE
Cattle group evaluates tuberculosis testing kits
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Workers harvest pumpkins in a Mar Farms field in Saanichton on Vancouver island. The boxes full of pumpkins are shipped to retailers. | DON DENTON PHOTO
New blood test | Skin test and post mortem inspections now used are less effective and time consuming BY BARBARA DUCKWORTH CALGARY BUREAU
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The Canadian Cattlemen’s Association has received $320,000 from the federal government to evaluate new blood tests for bovine tuberculosis. Canada is considered TB free but wants better surveillance tests that are easier and less expensive to run than the current skin tests. Skin tests and post mortem inspection of animals at abattoirs do not always detect disease, said Louis Desautels, an animal health consultant to the CCA. The skin test has been used since 1885 and results take three days. A blood test yields same day results. “It is a bit subjective and if we could get a blood test to replace it, it would be less subjective,” he said. Disease surveillance could be changed and border crossings and abattoir tests could be run more quickly. The three year project is r un through the CCA’s Beef Cattle Research Council. Canada has few positive cases to test the kits, so the United States and Mexico will provide samples from the U.S. Department of Agriculture’s serum bank at Ames, Iowa. CFIA scientists will receive the kits for evaluation. If successful, the study will identify one or a combination of tests that are easier and less expensive for regulatory agencies to administer. “You won’t replace the skin test today, but if you can get where the regulators are involved they will have a better idea of how effective these skin tests are,” said Desautels. Tuberculosis is a contagious disease caused by an infection in the lymph nodes that spreads to other organs such as the lungs. It affects practically all mammals and was one of the major diseases of man and domestic animals before control measures were adopted. access=subscriber section=news,livestock,none
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THE WESTERN PRODUCER | WWW.PRODUCER.COM | OCTOBER 27, 2011
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OCTOBER 27, 2011 | WWW.PRODUCER.COM | THE WESTERN PRODUCER
ONTARIO | NEW GOVERNMENT
Cabinet veteran named Ont. ag minister SASKATOON NEWSROOM
Ted McMeekin has been sworn in as Ontario’s agriculture minister following the Oct. 6 election, in which the Liberals won 53 seats, just one short of a majority.
McMeekin, from the Hamilton area, has previously served as minister of consumer services, minister of government services and as parliamentary assistant to the minister of education and to the minister of training, colleges and universities.
McMeekin first won a seat in the Ontario legislature in a 2000 byelection. He has also sat as mayor of Flamborough, then as a Hamilton city councillor, and holds a master’s of social work degree from Wilfrid Laurier University.
Ontario’s previous ag minister Carol Mitchell lost her seat in the election, as did Leona Dumbrowsky, agriculture minister from 2005-10. McMeekin lives in Waterdown, Ont., with his wife Barbara and three daughters. access=subscriber section=news,none,none
TED MCMEEKIN ONTARIO AGRICULTURE MINISTER
CATTLE | MANAGEMENT
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CHAIN L AKES, Alta. — When Gordon Hazard hires new people to work on his Mississippi ranch, he emphasizes a philosophy of low stress livestock handling. “I don’t want a cowboy. I want a cattleman,” he said earlier this fall during a seminar on grazing and cattle management at Chain Lakes in southern Alberta. Nervous cattle defecate, urinate and salivate more. That costs money because they are losing weight. “Every time that calf defecates, it costs you $5.” He uses the concept of low stress handling and understands cattle are prey animals that regard people as predators. They have a flight zone or personal space and if someone gets too close, they move away. Not understanding this can force them to go the wrong way. He trains his cattle within a few days to move to new paddocks and not to fear him so they can be moved into new pastures or loaded more easily into trucks. “The only way to get them to stop is to make them think you are their friend,” he said. Temperament is heritable but some problems could start at weaning with certain animals, said Hazard. His operation practices soft weaning where the calves are slowly removed from their mothers. The cattle are quieter and there is less sickness. In the last 15 years Alberta meat inspector Sandy Stafford has seen the results of low stress handling and improved care of livestock when they come to the abattoir. “Improved handling has come so far as the herd health has,” he said. Inspectors watch how animals are handled at plants and see the damage from bruises and other injuries that could devalue a carcass. The inspectors are also looking for overall condition and disease where they check the head, carcass and organs. “The lymphatic system can reveal the story,” he said. If they find something wrong, they contact the veterinarians on staff. In provincial plants they tend to see fewer abscessed livers compared to a large federal plant where 20 percent of livers may have to be condemned. Heart, kidney and liver problems may be related to what happened to them at the feedyard. “You can almost tell which feedlot they came from,” he said. access=subscriber section=news,livestock,none
THE WESTERN PRODUCER | WWW.PRODUCER.COM | OCTOBER 27, 2011
BIOFUEL | CELLULOSE
Dutch company develops enzyme technology to make ethanol Yeast method already in trials | The enzyme method converts cellulose into sugar, which is then treated using yeast technology AMSTERDAM, The Netherlands (Reuters) — A Dutch life sciences company says the development of second-generation biofuel is nearing a major breakthrough. Commercial production is just a couple of years away and could open up a market worth $5 billion a year, DSM added. Second-generation biofuel is increasingly being seen as a preferred alternative to first-generation fuel, which has been accused of sparking food inflation because it is made from food crops such as corn, sugar cane and rapeseed. DSM is developing yeast and
enzyme products to convert cellulose from waste plant matter into sugar and then ethanol, which is used as a motor fuel. It recently unveiled an enzyme technology that can improve the efficiency of biofuel production from sources such as agricultural waste like wheat and corn stalks. Although the industry is still in its infancy, DSM is confident the market is set to finally open up. “We see refineries being built, particularly in the United States, in the next two years. So by 2014 or the end of 2013 we see a meaningful market with maybe about a dozen second-
generation biorefineries,” said DSM board member Stephan Tanda. Spanish ethanol producer Abengoa started building a second-generation biofuel plant in the U.S. in September, while U.S.-based rival Poet said in July it will open its first commercial-sized cellulosic ethanol plant in 2013. In an April report, the International Energy Agency said biofuel could provide 27 percent of total transport fuel by 2050, playing an important role in reducing carbon dioxide emissions. However, it said improvements were needed in efficiency, cost and overall sustainability. As
U.S. AG BILL | BIOFUEL SUBSIDY
U.S. senator’s move to halt subsidy at pump fails WASHINGTON, D.C. (Reuters) — A proposal that would have stopped subsidies for new gas station pumps to boost ethanol sales has failed to make it into the Senate’s version of the 2012 agriculture budget. The measure, proposed by senator John McCain as a way to trim federal spending, would have prevented the U.S. Department of Agriculture from offering grants and loans for rural gas stations to install blender pumps. The pumps let consumers blend gasoline with up to 85 percent (E85) ethanol for cars designed to handle the higher levels. However, McCain withdrew his amendment before the Senate could vote on whether to attach it to the agriculture appropriations bill. No reason was provided. The House version of the bill has a similar provision that would prevent the USDA from spending money on blender pumps. Lawmakers from the House and Senate will have to negotiate the issue when they finalize funding for the USDA for 2012. The Senate version of the bill proposes $4.5 million for the USDA program that would fund the pumps, among other rural energy efforts, while the House approved $2.3 million for the energy program, with the proviso money not go for pumps. Funding for blender pumps is important for ethanol makers, who see the lack of ethanol infrastructure as a limiting factor for expanding the market for the corn-based fuel additive. Ethanol makers expect to lose a tax credit worth $6 billion per year at the end of 2011 and have said government subsidies for infrastructure would help make up for that loss. The tax credit has been in place since 1978 and has long been supported by lawmakers from farm states who wanted to help increase demand for corn. However, the subsidies have become controversial as corn prices rose to recent record levels. Ethanol has been blamed for raising prices for food and livestock feed. access=subscriber section=news,none,none
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well, substantial further investment in research was needed to make biofuel commercially viable. Tanda said DSM, the world’s largest vitamin maker, aims to tap into a market that will supply yeast and enzymes to second-generation ethanol producers in a sector that could be valued at $3 to $5 billion annually within 10 years. Claiming a major step forward, DSM said their unique technology uses yeast to efficiently ferment two types of sugar into ethanol. “Very few competitors can do that, which means we are talking at least to about two-thirds of the players to
supply the yeast for their bioethanol,” Tanda said. DSM has already conducted trials with Abengoa using its yeast technology but is also developing an enzyme technology that breaks down plant cellulose into sugar, which can then be treated with yeast technology. The enzyme technology competes with that of DuPont, which closed a deal to buy Denmark’s Danisco in May, and Danish rival Novozymes. Still, DSM’s technology is more costly than its rivals and the company is aiming to close the gap before the new cellulosic ethanol plants become operational. access=subscriber section=news,none,none
OCTOBER 27, 2011 | WWW.PRODUCER.COM | THE WESTERN PRODUCER
BIG WHEAT, BIG INVESTMENT A Cando, Sask., farmer averaged 117 bushels of soft white wheat per acre using an intensive agronomic strategy system dubbed Ultimate Yield Management. | Page 24
PRODUCT IO N E D I TO R: M I C HAEL RAINE | P h : 306- 665- 3592 F: 306-934-2401 | E-MAIL: M IC H AEL.RAIN E@PRODUC ER.C OM
SOIL | SAMPLING
Sampling vital to ensuring soil fertility Test now | Many fields show signs of nitrogen depletion BY MARY MACARTHUR CAMROSE BUREAU
Good crops in the past two years have depleted soil fertility levels, and it’s beginning to show up in early soil samples. Blaine Welsh of the Agro Guys in Galahad, Alta., said only two of the seven soil samples sitting on his desk have more than 10 pounds of available nitrogen in the soil. “The two fairly good crops in a row have sucked most of the nitrogen out of the ground,” said Welsh. “It’s going to take a little nitrogen if guys want to get the same yield next year. Some of them have depleted the buffer that may have been left from the drought years.” Spending a few days crisscrossing fields taking soil samples is one of the simplest and most accurate ways for farmers to determine the level of nutrients in the soil available for next year’s crops. Ross McKenzie of Alberta Agriculture said only 10 to 15 percent of farmers soil test their fields. It’s those soil samples that give farmers a clear picture of how much and what kind of fertilizer they need to apply, said Welsh. “We’ve got people who don’t soil sample and some that do it every year. The guys that don’t soil sample, it’s hard to know what’s happening in their ground. Some are just plain frugal, which makes no sense to me.
At less than a buck an acre, or two pounds of nitrogen, if you can fine tune your nitrogen, that’s the price of a soil sample. The guys who do it every year know what’s going on. BLAINE WELSH AGRO GUYS
At less than a buck an acre, or two pounds of nitrogen, if you can fine tune your nitrogen, that’s the price of a soil sample. The guys who do it every year know what’s going on.” Soil tests cost $50 to $150, depending on how much infor mation farmer’s want back from the laboratory. Welsh said soil tests have given his clients a better understanding of low chloride levels and the low soil pH, which can affect chemical residue. With the soil tests, Welsh knows the addition of potash is a relatively simple fix for low chloride levels. “I’m looking at one sample. It says he
has 11 lb. of nitrogen in his soil and if he wants to grow a 30 bushel canola crop, they’re saying he needs between 90 and 100 lb. of N, and to be flat honest, I know damn well he ain’t putting that on. He’s a 50 lb. of N guy. But maybe that’s why he got 25 bu. of wheat this year and everyone else got more.” Welsh said older farmers tend to follow the same fertilizer prescription that has given them good crops
in the past, and they’re not going to change their fertilizer requirements based on soil test results. “The older generation probably doesn’t have a lot of faith in soil sampling. The younger generation tend to look at stuff a little differently,” said Welsh, one of the many farm input retailers on the Prairies who offer soil sampling services. Alberta Agriculture agrologist Mark
Cutts said the increasing price of fertilizer has encouraged some farmers to soil test this fall. “They want to be sure they’re spending their money properly if prices are going to be high. It’s not uncommon to spend a little money, evaluate the nutrient level of their fields and make their fertility decisions based on that,” said Cutts of the Ag-Info Centre in Stettler.
“Nitrogen certainly is the big driver for guys to go out and get soil samples and figure out where they’re at for fertilizer.” However, he said many farmers put on the same amount of fertilizer each year. “If their target yields are being met by their present fertility applications, then they’re probably happy with what’s going on.” Like Welsh, Cutts expects nitrogen levels will be low after two years of
THE WESTERN PRODUCER | WWW.PRODUCER.COM | OCTOBER 27, 2011
DISEASE | PREVENTION
Alberta soil tester combats clubroot BY MARY MACARTHUR CAMROSE BUREAU
This truck-mounted soil sampler allows for proper soil sampling without having to leave the cab. | MARY MACARTHUR PHOTO
The discovery of clubroot in eastern Alberta has prompted a young entrepreneur to invent a cleaning system for her truck-mounted soil sampler. Sheena McKelvie attached sprayer nozzles to the wheel wells of her truck that spray a 12 percent bleach solution on the tires. She turns on the sprayers by activating a switch in the cab. McKelvie said spraying the bleach solution each time she enters and leaves a field eliminates the spread of clubroot by any soil stuck to her truck tires. Clubroot is mainly spread through soil. â€œWhen youâ€™re trying to do business in farmersâ€™ fields, you want to show youâ€™re doing the right thing,â€? said McKelvie, who started her own independent soil testing business, Sheena Soil Sampling, earlier this month. â€œItâ€™s important for an agronomist to take the lead.â€? The discovery of clubroot in Vermilion County this fall prompted McKelvie and her farming partner, Mads Merrild, to invent a way for McKelvie to take soil samples with
Sheena McKelvie shows a nozzle that sprays a bleach solution on tires to help prevent the spread of clubroot. | MARY MACARTHUR PHOTO her truck-mounted soil sampler without the possibility of spreading the disease through fields. â€œIt would have stopped the business going forward.â€? The bleach solution is contained in a tank on the truck. McKelvie said soil sampling is an important tool for farmers but is difficult to do properly by hand, especially if the ground is hard. The truck-
mounted soil probe allows correct soil samples to be taken without leaving the truck cab. â€œItâ€™s all controlled from inside the cab and the only time I have to get out of the truck is to dump the stainless steel bucket into the sample bag at the end of each field,â€? she said. Clubroot has the potential to reduce canola yields in half. The confirmation of a field in Vermilion County contaminated with clubroot raised fears among farmers about the spread of the disease by contractors driving through fields. Blasts of air clean the soil probing equipment after each soil sample, which she said eliminates the possibility of contamination through the soil sampling equipment. Stephen Srelkov, a clubroot specialist from the University of Alberta , said bleach is an effective way to kill clubroot pathogen spores, particularly if the spores are present in a fine dust. It be wouldnâ€™t be as useful if spores are in big clumps of soil, he added. Srelkov said mounting spray nozzles near the wheels sounded like an â€œinteresting system.â€?
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