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Note from the editor

Allison Finnamore

As a weekly publication, FCC Express explores Canadian agricultural news. But news sometimes travels at a pace beyond our deadlines. You can still keep up-to-date with news on the Farm Credit Canada website, where agricultural news links are posted as the stories break. The latest is at http://www.fcc-fac.ca/en/Agnews/agnews_e.asp.

Your comments, questions and story ideas are always welcome. You can contact me at allison@finnamore.ca.


1. Spring seeding may start early

One benefit to the mild, dry winter experienced in the Canadian Prairie's this year is that farmers may be able to start spring seeding ahead of normal.

That's the word from Trevor Hadwen, an agro-climate specialist with Agriculture and Agri-Food Canada's National Agro-Climate Information Service in Regina, Sask.

"People will be able to get on the land earlier and take advantage of the moisture that's there," he says.

Another benefit is that little spring flooding is expected. Provincial officials say the overall flood risk on the Prairies is small because of below-average snow cover and low soil moisture.

AAFC says soil moisture levels at winter freeze-up were below normal in Manitoba, western Saskatchewan and northern Alberta, although eastern Saskatchewan and southern Alberta are a bit better off.

The snow which fell at the end of February probably won't recharge soil moisture reserves because much of the water from melting snow usually runs off the land or evaporates, Hadwen says.

Most of the Prairies are one to two inches below normal in actual precipitation. But good spring rains, if they occur, could make up the deficit quickly, he says.

Hadwen notes winter is always the driest time of the year on the Prairies, while March and April tend to be wetter.

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 The bioeconomy and your business. Discover how agriculture and agribusiness will continue to be a key player in the bioeconomy. Read the new edition of Knowledge Insider.

2. VIDEO: The New Era of Grain Marketing with the President of Cargill Limited

Len Penner, President of Cargill Limited, discusses the changes for wheat and barley in the new grain marketing environment.

Watch more FCC learning videos on our multimedia page 

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3. Saskatchewan agri-food exports thrive

The Saskatchewan government says for the first time ever, the province exceeded $10 billion in agri-food exports in 2011.

It now surpasses Ontario as the top agri-food exporting province in Canada, the province points out.

"This significant growth in our agri-food exports exemplifies the importance of agriculture to our economy," says Agriculture Minister Bob Bjornerud.

In 2011, the province's top exported agri-food products included canola, canola oil and non-durum wheat.

Canola continues to have a major impact on the province's economy with canola seed overtaking non-durum wheat as the top agriculture export commodity. In the last five years, canola seed exports have increased by 250 per cent from $856 million in 2007 to more than $2.1 billion in 2011.

The top five markets for Saskatchewan agriculture products are the United States, China, Japan, Mexico and India. Since 2007, Saskatchewan agri-food exports have increased by 60 per cent, from $6 billion to $10 billion.

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4. Farmers welcome new CFIA procedure guide

Canada's livestock producers are applauding a new Canadian Food Inspection Agency service guide, which includes a mechanism for handling complaints and appeals.

The complaints mechanism is particularly welcome because it gives farmers a direct avenue for solving problems arising from CFIA's food inspection procedures, industry officials say.

"If there's a shutdown at a plant or if there's a transportation issue, that automatically backs up production on-farm," says Rick Bergmann, vice-chair of the Canadian Pork Council.

"Instead of phoning another department of CFIA to see what the problem is, there's an appeals committee that would focus directly and quickly on the concern."

CFIA recently announced a Statement of Rights and Service for producers, consumers and other stakeholders outlining what the agency does and what people can expect when dealing with it.

Its purpose, according to a news release, is to "offer stakeholders and CFIA staff a clear, plain language explanation" of the working relationship between the agency and the industry.

Farm and industry groups issued statements expressing approval for the initiative, especially the formation of the complaints mechanism, which will give them recourse if they disagree with a regulatory decision.

"This part of the initiative will be well received by industry and particularly producers who have experienced frustrations with the CFIA inspection process in the past," says Martin Unrau, the Canadian Cattlemen's Association's newly elected president.

Those frustrations include actions by CFIA inspectors at the receiving end which can immediately affect a producer's ability to ship live animals, says Bergmann, a weanling producer from Steinbach, Man.

"That causes a very quick bottleneck directly back to the farm," he says. "By having an appeals committee, it would keep everybody more accountable."

The Canadian Federation of Independent Business also welcomed CFIA's promise to improve accountability and service.

CFIB has criticized CFIA in the past for what it calls a lack of transparency in the way the agency deals with stakeholders. The complaints and appeals mechanism will help to correct that, says Marilyn Braun-Pollon, CFIB's vice-president for agribusiness.

"We believe this is one of the practical ways the CFIA can be more accountable and fair," says Braun-Pollon.

Canada's processors say CFIA's new guidelines will help them better understand their own responsibilities in dealing with the agency.

"In addition to clarifying CFIA expectations of industry, the guides identify the rights of companies during and following CFIA inspection activities," says a joint statement by the Canadian Meat Council, the Canadian Poultry and Egg Processors Council and the Further Poultry Processors Association of Canada.

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5. CWB programs set to launch

The Canadian Wheat Board is meeting with farmers prior to the launch of its new marketing programs at the end of March.

About half of the 21 meetings have taken place already, mainly in southern and central Saskatchewan.

The CWB will offer two pooling options in the open market environment, which begins on Aug. 1, for wheat, durum and malting barley.

The harvest pool and the early delivery pool will include 12 grades of red spring wheat, five grades of durum, one grade of prairie spring red wheat, two grades of red winter wheat and two-row malting barley.

The harvest pool is similar to the current offering under the CWB's single desk selling system. The early delivery pool provides a guaranteed delivery by Jan. 31 and an earlier final payment.

The CWB is promoting the simplicity and flexibility of pooling.

"We have a lot of different grades that farmers can choose from," says Gord Flaten, the vice-president of marketing and sales. "They can change the grades for free, depending on what they actually harvest. As they go through the year, if there are any grading issues, the pools will be able to accommodate those issues better than other options."

There will also be futures and basis contracts, deferred delivery contracts and a two-row malting barley production contract for the 2012-13 crop year.

Flaten says the pools will offer an opportunity to benchmark performance of the producer's entire grain marketing portfolio.

"They can test their own marketing results on the cash side by doing an on-farm comparison and putting some of their tonnage in the pool."

The CWB is negotiating with private grain companies to establish commercial grain handling agreements. The deals are needed because the wheat board does not own any country elevators or port facilities. The only agreement to date is with Cargill, the third largest grain handler in Western Canada. Cargill has 30 country elevators and port facilities in Vancouver, B.C., Thunder Bay, Ont. and Baie Comeau, Que.

Flaten says all of the negotiations are unique to each company.

"One of the reasons why this process takes time is we have to make sure the agreements work well for the CWB, the handling company and the farmers who want to deliver there, so we want to be careful and get them right," he says.

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6. Leaf disease control fungicide registered

Now registered in Eastern Canada, BASF Canada Inc.'s Twinline fungicide brings leaf disease control to cereals, states the company.

BASF says Twinline is registered for use on wheat, barley and oats, controlling a broad range of leaf diseases like tan spot, septoria leaf spot, leaf rust, stripe rust, spot blotch, net blotch, scald, crown rust and powdery mildew.

Over the past two years BASF evaluated the leaf disease control of Twinline in large-scale federal research authorization trials across western Canada. Results were positive, says the company, "with excellent disease control leading to an average yield response of two to four bushels per acre."

Trial results and other details, including application timing, are at http://agro.basf.ca/East/Products/TWINLINE.html.

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7. U.S. proposing changes to import regulations

The Canadian Cattlemen's Association says the United States' possible adoption of international animal health standards would secure this country's access to the U.S. and encourage other countries to adopt the same guidelines.

The United States Department of Agriculture's Animal and Plant Health Inspection Service is proposing new bovine import regulations in line with international animal health standards.

The intent, says APHIS, is to ensure the health of the U.S. beef herd as well as to assist in future negotiations to reopen important trade markets that remain closed to the U.S.

The proposed rule would allow for the safe trade of additional bovines and bovine products. It would not change other measures currently in place in the U.S. to safeguards against bovine spongiform encephalopathy, including the ruminant-to-ruminant feed ban and what the U.S. calls a robust BSE-surveillance program and the ban on animal materials that have been shown to carry the BSE agent from the food supply.

The proposed changes are based on World Organisation for Animal Health guidelines, which Canada also follows. These guidelines allow for live cattle and beef products to be safely traded, provided that countries have taken appropriate steps to manage BSE, such as feed controls and surveillance.

Agriculture Minister Gerry Ritz says Canada supports the announcement.

"We have always maintained that a science-based approach is the best way to manage BSE," Ritz says. "We know that trade should not be affected when countries such as Canada and the United States put in place appropriate measures to protect human and animal health."

Canada manages BSE through a series of integrated safeguards designed to protect both human and animal health. These include prohibiting risk materials from entering the human food and animal feed chains and testing cattle for BSE.

The Canadian Cattlemen's Association says Canada's cattle and beef trade with the U.S has already, for all practical purposes, been normalized from the trade interruption following the May 2003 detection of BSE in a Canadian cow.

The USDA is accepting comments on its proposed rule for 60 days. For more information on the proposal, visit http://www.aphis.usda.gov/newsroom/2012/03/bse_rule.shtml.

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8. Testing results now available

Alberta Agriculture has released the latest variety testing results from its regional variety testing program.

The online data offers a wealth of information on new cereal, flax and pulse crops in a user-friendly searchable format for producers and industry specialists.

Although results tend to focus on yield information, regional variety trial co-ordinator Alex Fedko reminds users to keep a few things in mind when evaluating the reports.

Fedko cautions that the yields are from small plots and can often be more than 20 per cent higher than crops planted on a field scale. Also, when evaluating a variety, yield results should only be one factor. Maturity, lodging and disease resistance should all be considered.

The testing program is administered by Alberta Agriculture, based on procedures approved by the Alberta/British Columbia Grain Advisory Committee. The four reports are available at http://www1.agric.gov.ab.ca/$department/deptdocs.nsf/all/webdoc12969.

The variety description report provides results for barley, chickpeas, dry beans, flax, lentils, oats, peas, spring wheat and triticale using a well-known check variety for comparison. Users can get extra details on specific varieties.

Additional information on variety characteristics and resistance to such things as disease, lodging, shattering and sprouting is available with just the click of a few extra buttons at the top.

A second report -- Compare Crop Varieties -- allows for the comparison of yield performance at specific locations in Alberta and parts of British Columbia. Add a variety and a location to compare by clicking on the "+" symbol and get comparisons as far back as 1996.

Growers interested in pulse crops will find data available in an online e-book that can also be downloaded in PDF format. Detailed information for Alberta and northeastern British Columbia includes yields by region as well as agronomic characteristics and specifics on resistance. The report covers results for yellow and green field peas, dry beans, lentils, chickpeas and faba beans.

A similar e-book and PDF format report provides data for cereals and oilseeds for Alberta and northeastern British Columbia. Crops include spring and winter wheat, rye, flax, barley, oats, spring and winter triticale and canola.

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9. Potato cyst nematode testing wraps up

Soil testing for the 2011 seed potato crop has received the all-clear signal from the Canadian Food Inspection Agency for potato cyst nematode.

About 44,000 soil samples were collected and analyzed as part of Canada's 2011 national potato cyst nematode detection survey. That amounts to about 78 per cent of last year's seed potato production area in the country.

Testing was conducted in conjunction with seed potato growers and other stakeholders.

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10. Market Focus - Canadian lentil acreage decline likely

Lentil acres in Saskatchewan may decline in 2012 because of the ample 2011 Canadian supply spilling over into the new crop year and still generally weaker prices.

Total Western Canadian lentil area is expected to fall as much as 15 per cent in 2012 from the 2.5 million acres that were seeded in the spring of 2011.

Despite the potential for lower lentil area in 2012, Prairie farmers may still give some consideration to red lentils. Values for the crop have improved lately, albeit only modestly. Some of the modest strength seen in red lentil values -- lifting prices off their 16 cent a pound winter lows to as high as 19 cents recently -- has come from light levels of fresh export demand, likely from Europe.

While still in the doldrums for now, I believe red lentils have a more promising price outlook when taking the longer term view. But in saying that, don't expect a quick return to the wildly profitable 30 plus cents a pound returns seen a year and more ago, at least not until excessive Canadian and global supplies are pared down. And that may take another full growing cycle before we start seeing the prospect of a more sustained turn higher in lentil valuation, assuming acreage in Canada and globally are scaled back.

In the near-term, if recently harvested supplies of Australian red lentils run out, buyers may be more inclined to take a look at higher quality Canadian red lentils once again.

But following a recent run-up to US$610 a tonne or so landed Asia, world red lentil prices have reportedly softened to US$30 a tonne or so in past few days. Red lentils at a price of $0.19 a pound at Prairie origin are now likely $0.18 or so.

Similar to lentil market conditions of the recovery-era of five years ago, this is a grinding process that could take another six to 12 months to fix. Canada still has a mountain of lentils to plow through.

On large green lentils, there remains a relatively quiet market. Some of the soft tone to demand for green lentils is being attributed to credit concerns in major buying countries, including countries in South America and Europe, along with Iraq and Iran.

But on large greens as well, there are some factors that could, in time, help improve the price potential. Resolving global credit problems amongst major buyers would be supportive. Fresh export business to India, which has been relatively quiet in the market, would also add a bullish flavor to the price outlook.

But I'm concerned that Prairie lentil growers may view cash bids for large green in the $0.23 to $0.25 cent a pound area as a market signal to start a big switch from red to green lentil production this year -- a market that is not well positioned to absorb a sizeable lift in production.

Users of both red and lentils still lack the urgency to panic at this time, but their tone in terms of buying interest should increasingly take their cue from India, the market-maker of the global pulse trade. Best prospect for a demand boost is fear, at some time in the future (say in eight months) where importers change their mindset from buying hand-to-mouth to buying a year's worth of demand in effort to rebuild inventory on fear of higher price. That's not the position of the market today, but may start evolving there a year from now. All said, the trend/cycle is playing out in what most would claim as the expected fashion.

Mike Jubinville of Pro Farmer Canada offers information on commodity markets and marketing strategies. Call 204-654-4290 or visit www.pfcanada.com to find out more about his services.

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The editor and journalists who contribute to FCC Express attempt to provide accurate and useful information and analysis. However, the editor and FCC cannot and do not guarantee the accuracy of the information contained in this report and the editor and FCC assume no responsibility for any actions or decisions taken by any reader of this report based on the information provided in this report.

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Copyright 2012, Farm Credit Canada