AgriSuccess Express

Quebec’s travelling dairy store a hit Canada’s largest producer co-operative formed Producers’ share examined Harvest delayed in Saskatchewan FSP hits budget limits Farm assessment review begins in B.C. Manitoba forage assistance program rolling Alberta Beekeepers survey confirms high winterkill losses Benefits of vitamin D in beef recognized Market Focus – Macro market review

As timing goes, the launch of a unique marketing concept aimed at promoting the quality, safety and goodness of Quebec dairy products couldn’t have come at a more opportune moment.

“This is the perfect thing at a time like this,” says Nicole Dubé, marketing director for the Fédération des producteurs du lait du Québec, about Lait à la bouche, the federation’s new nomadic milk store.

The 400-square-foot moveable milk counter is equipped with freezers, fridges and microwave ovens and can be set up in three different configurations. The store is designed to showcase and sell everything from standard milk and cheese to specialty products like ice cream and yogurt at shopping malls, office buildings and farmers markets across Quebec.

According to Dubé, who spent the past two years working on the project, the store’s raison d’être is to be a vehicle to inform consumers in both the marketplace and the workplace about the wide variety of specialized dairy products now available.

First set up in a Montreal mall for four days in late August, the store will be up for about 40 days in similar locations by the end of 2008. In 2009, it will travel to smaller urban centres in Quebec.

Dubé says there has so far been a constant flow of people into the store when it is set up.

“Our goal isn’t to sell products, it’s to give them credibility and visibility in places where people are shopping or working,” Dubé says. “The spontaneous reactions we’ve had so far suggest we’re on the right track. People are telling us the store is beautiful, clean and futuristic. It puts a very modern face on the dairy industry.”

In addition to a dietician, a nutritionist and a barker who attracts passersby, the store also features a master cheese maker. In light of public concern over cheese-borne listeria right now in Quebec, Dubé says the cheese maker is especially busy.

“People are asking a lot of questions about cheese and they say they really appreciate the information we’re giving them about it,” Dube says. “We could have 20 of these stores right now and they’d all be busy.”

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Tree fruit growers in British Columbia’s Okanagan region have created one of the largest producer co-operatives in Canada.

The Okanagan Tree Fruit Co-operative is the result of a merger of four co-operative packing houses in B.C.’s southern interior valleys. The new company is a sorting, packing and shipping consortium for more than 900 growers who work 4,856 hectares of orchard from Osoyoos to Salmon Arm, Keremeos to Creston.

The amalgamation should result in a better eating experience for consumers and better prices for higher quality fruit says Jim Elliot, president of the co-operative’s interim board. With a single packing house serving the region, growers will have to comply to the co-operative’s criteria for when they harvest fruit, with the intent of ensuring each fruit is picked when it’s at its best, Elliot says. It could be more difficult for larger growers to get all their fruit picked at the same time, but the result will be higher quality fruit going to market.

Elliot says he enjoys leading a grower organization when prices are strong for products like early apples. Cooler, wet weather of the past couple weeks has helped apples to colour up before they become over-mature, so the weather is ideal for the upcoming apple harvest. Despite pockets of hail damage, the crop this year is expected to be a good one, although smaller than normal.

The four packing houses that formed the co-operative packed a wholesale value of over $100 million in 2006 and shipped across Canada and into the United States, Mexico, Latin America, Europe and Asia. Gary Schieck, chief executive officer, says the book value of the assets of the four co-ops is over $54 million, but market value is estimated to be higher, since the 15 properties include waterfront and are usually key downtown locations in major centres. The new co-op employs 640 people.

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Increased attention has been given to the rising price of food in the last year, however, two prairie farm groups are explaining how much agriculture producers receive from what consumers pay in the supermarket.

In research conducted this summer, the Keystone Agriculture Producers Association and the Agriculture Producers Association of Saskatchewan found an average of 27 per cent of the cost of an entire week’s worth of groceries for a family of four goes back to the farm gate.

“Manitobans have access to some of the most affordable food in the world, but only a relatively small portion goes back to the farmers that grow and raise it,” says Ian Wishart, president of KAP.

“We’re hoping this information helps people understand where their money is going, and helps them think critically when media is saturated with stories that put the blame on rising food costs straight back to the farm gate,” he says.

APAS president Glenn Blakley says the vast majority of a producer’s share is simply the cost of doing business. Growers’ expenses and inputs account for about 86 per cent of their revenue, according to figures from Statistics Canada.

"This ridiculous escalation in the price of fertilizer is probably going to have more of a negative effect on the price of food than anything the producers do themselves," Blakley says.

With the cost of production rising faster than grain and oilseed prices, Blakley believes producers will have to cut back.

"That's going to lead to a reduction in the use of fertilizer which will lead to a reduction in the production of the product, and as soon as there's a shortage, we'll see an increase in the price of food," he says.

The menu selections in the study were based on Canada’s Food Guide to Healthy Eating for two adults, a teenager and a child. The total food cost before taxes was $186.22, with 89 per cent of the foods listed as being produced in Canada.

The producer’s share ranges widely between food products, often depending on the number of steps in the chain between the farm and the grocery store. Less-processed foods, like meat or vegetables, often showed a greater return to the producer. In the case of bread or other grain products, the actual return to the farm gate is small.

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Cool, wet weather has delayed harvest in all areas of Saskatchewan this past week.

Twenty-two per cent of the 2008 crop has been harvested, up just two per cent from last week. This is behind the five-year average (2003-07) of 49 per cent harvested for this time of year.

Harvest continues to be furthest advanced in the southwest where 36 per cent of the crop is harvested, followed by the southeast at 30 per cent. Combining is least advanced in the northwest where only 10 per cent of the crop is off.

Current yield estimates continue to point to above-average provincial production for 2008.

Weather has had a negative impact on crop quality in general, with reporters citing damage from staining, bleaching, sprouting and lodging. With 19 per cent of the barley harvested, estimates are that 49 per cent should grade malt quality. The 10-year crop report average is 32 per cent grading malt quality.

Meanwhile, seeding of fall crops is underway. The biggest factor limiting seeding of fall crops is the fact that harvest progress is behind schedule.

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Farmers in Manitoba and Saskatchewan have been strong adopters of environmental farm plans, but the enthusiasm has caused some funding issues.

The Farm Stewardship Program operates in conjunction with environmental farm plans. It provides the funding to help producers complete projects recognized during the environmental farm plan process, such as improved manure storage facilities, relocating livestock wintering sites and improved cropping systems through adoption of GPS or minimum tillage systems.

In Saskatchewan, more than 3,000 project applications were approved costing about $9 million. Over $4 million was allocated for about 2,400 farm projects in Manitoba.

“We had a lot of uptake of that particular program right through the winter and into the summer and because of the overwhelming demand, the budget has pretty much reached its end,” says Jason Fradette, Saskatchewan agriculture land manager with the Prairie Farm Rehabilitation Administration.

The PFRA approves applications and delivers the funds for the program. Producers can choose from a list of 30 approved beneficial management practices designed to reduce environmental risks. The program pays either 30 per cent or 50 per cent of the eligible costs of implementation, depending on the practice chosen. A producer can receive a maximum of $30,000 from the program.

"Just going through the environmental farm plan process has been an educational opportunity for farmers, which has not only provided cost share dollars but also allowed them farmers to become more in-tune with what's going on in their operations,” says Wanda McFadyen, executive director of the Manitoba Environmental Farm Plan program. “They can make improvements on their farms that do not cost a lot, but have economic and environmental benefit in the long run."

In Manitoba, 5,600 producers have completed the environmental farm plan process, covering about 8.9 million acres. In Saskatchewan, over 12,000 environmental farm plans were completed.

Producers who applied for FSP projects but haven’t received funding will have to wait and see if their applications will carry forward into next year. The new Growing Forward suite of federal programs is coming into effect, and both Fradette and McFadyen are unsure how the FSP will operate under those programs.

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British Columbia’s farm assessment review panel starts province-wide consultation meetings next week.

The panel will travel throughout the province over the next few months discussing ways to improve the farm property assessment process. The first consultation will be held in Central Saanich on Sept. 16.

In December 2007, the minister of small business and revenue announced a comprehensive review of B.C.’s farm status assessment policy to address property assessment issues of concern raised by producers and their communities.

Kevin Krueger, minister of small business and revenue and minister responsible for B.C. assessment, says the consultations will help the farm property assessments process be fair, equitable and straightforward, accommodating the regional diversity of the province’s agriculture industry.

Those interested in attending and participating in the public meetings can find specific dates, times, locations and venues of meetings at www.farmassessmentreview.ca. To guarantee a seat or to make a presentation, registration is encouraged, either by e-mail to farmassessmentreview@gov.bc.ca or telephone at 1-866-956-7551.

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Manitoba livestock producers in need of financial help to transport feed or livestock due to excess moisture or drought conditions can now apply for the new forage assistance program.

"We know that for affected livestock producers it's urgent they can get feed to the areas most affected by this year's excessive rains, overland flooding and drought," says Rosann Wowchuk, Manitoba’s minister of agriculture. "We've accelerated our work on this program to deliver assistance to producers as soon as possible."

Application forms are now available at Manitoba Agriculture, Food and Rural Initiatives GO Offices and are be available online at www.gov.mb.ca/agriculture. MAFRI staff will also be available to provide producers with information and advice on livestock nutrition, alternative feeds and financial management. Contact any MAFRI GO office to answer questions or arrange for an appointment.

To be eligible for the forage assistance program, producers must be short of feed due to drought or excess moisture conditions and have had ownership of the animals from August 1 to the date of application. Also, the animals must be located in Manitoba. The amount of assistance available will vary with the type of feed and livestock.

Eligible livestock include beef cattle, dairy cattle fed to produce beef, bison, elk, sheep, goats, deer, ranch horses and llamas.

The program applies across Manitoba, providing feed transportation assistance for hay and straw being transported to feed to eligible animals. As a farm management alternative, the program provides support to transport livestock to alternate feeding locations in Manitoba.

A hay listing service and feeding location service is available to producers who need to purchase hay or straw or have excess hay and straw for sale. The listing is at www.gov.mb.ca/agriculture/production.html under Gateways.

For further information contact the nearest MAFRI GO Office.

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A new survey by Alberta Beekeepers confirms high winterkill losses, with an average provincial death rate of 30 per cent, twice the long-term average in Alberta. Losses varied from 36 per cent in the northern Peace country to 22 per cent in the south.

Additional statistics indicate that 50 per cent of beekeepers across the province faced losses of one-third or more of their productive colonies while 14 per cent of the surviving colonies were considered too weak to produce honey.

The survey attributes the high loss rate to an increased infestation of varroa mites, which are exhibiting increased resistance to the two registered pesticides, Chick-Mite and Apistan, used to control them. Prolonged winter conditions combined with a cold spring also contributed to losses.

Paul Laflamme, with the Alberta Rural Development pest management branch, says the survey shows no indication of Colony Collapse Disorder as defined in the United States, which has decimated hives south of the border.

Kevin Nixon, president of the Alberta Beekeepers, runs 5,000 hives on his farm near Innisfail. He calls the last two years a disaster for producers hit hard by winterkill combined with record low market conditions caused by strong competition from Argentina and China.

According to Nixon, the industry needs more treatment options to combat the growing mite resistance. “We need five or six options so we can use a different one every year in rotation to avoid the resistance problem.”

Health Canada’s Pest Management Regulatory Agency has approved a one-year emergency registration of Apivar, effective August 27, to help combat the mites.

But Nixon remains frustrated by what he calls a “band-aid solution” to the problem. “We need to screen new chemical products and get them through the regulatory process and to the market faster. The process is too slow.”

He recognizes the industry is relatively small and that the payback to chemical companies makes it hard to justify their investment in such research. Alberta Beekeepers is currently working closely with the provincial department to identify solutions.

The survey included 112 beekeepers with 400 or more colonies. The results represent 201,000 colonies or about 75 per cent of Alberta’s colonies. You’ll find the survey at www.agric.gov.ab.ca. Search for “Alberta Beekeepers Survey.”

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The Canadian Council of Food and Nutrition recently issued a scientific paper and consumer fact sheet listing beef as a source of vitamin D.

According to Carolyn Kallio, nutrition program manager with the Beef Information Centre (BIC), it’s a big step forward in the recognition of the vitamin D benefits associated with beef.

The benefits of vitamin D in the maintenance of bone health have been well-known for many years. Recent research has shown that vitamin D may also be a factor when it comes to fighting chronic diseases such as cancer, multiple sclerosis, diabetes and schizophrenia.

Beef has always provided a natural source of vitamin D. But Kallio says most people, including nutritionists and health professionals, are unaware of the fact. For example, many do not know that 100 grams of cooked beef has the equivalent vitamin D of one egg or about 25 international units. The BIC has been working for many years to increase that level of awareness.

The BIC commissioned McGill University to analyze vitamin D in beef and to determine the main sources for vitamin D in Canadian diets. They found that as Canadians age, milk is no longer the main source of vitamin D, but beef and eggs continue to be part of their diet. The BIC has also worked with Health Canada to include updated information on beef in the Canadian Nutrient File.

Kallio believes the recent vote of confidence provided by the CCFN in the BIC’s research program will help raise the level of awareness about the health benefits of beef. It provides consumers and professionals alike with a credible source of information, reinforcing the positive nutritional and health advantages associated with eating beef.

To view a copy of the consumer fact sheet check the CCFN website at www.ccfn.ca. Look under “In Action.”

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The commodity bull run that sent grain markets to record highs in 2008 has obviously been hobbled this summer. Disinvestment in commodities has money flowing out of the asset class on a broad scale, like energy, metals and agriculture.

Falling values in the United States housing market, stock markets and negative returns in commodities have led to a freefall in prices across broad asset classes, placing great pressure on investors. As such, investment money from speculative funds has been moving to the sidelines from commodities and equities since mid-July, as a lack of return on investment has the spec funds reducing risk exposure.

In the previous two years, large speculative, index and hedge funds accumulated massive long positions in commodities while taking on short positions in the U.S. dollar. The diversification of investments into commodities fuelled the historic run to record price levels. But huge long positions held by the speculative sector opened the door for a tumble, once funds and investors scrambled to liquidate positions amid falling price values. The markets this summer have experienced a flight from commodities, with the potential risk of a global economic slowdown serving as the catalyst to entice investors into reducing their long positions in the market place.

Demand destruction or simple rationing of supplies have emerged, as once prices go too high, end users will adjust their buying habits or needs. Global demand is making adjustments in relation to price, with the world seemingly using fewer commodities and producing nations such as Canada searching for demand.

As it stands for the grains markets, many factors combine to knock them lower: plunging crude oil, international oil seed and vegetable oil markets down hard, no immediate frost threat for the U.S. Midwest, potentially more hurricane-induced beneficial rains for the U.S. hard red winter wheat belt and better than expected U.S. crop ratings this week from USDA.

Crude oil remains a real dog, down to US$102 a barrel at the time of writing and on a mission to test psychological chart support at $100 -- and seemingly wanting to drop below that level. The market reacted bearishly Tuesday to the latest information from the U.S. National Hurricane Center, which now projects the track of Hurricane Ike to further south of the U.S. Gulf oil and natural gas production area. This is relieving traders' concerns of any damage to oil rigs, triggering another wave of liquidation pressure in the crude oil market.

Of course the crude oil situation again lent spillover pressure to all ag-related markets. But again at the time of writing, soybeans regain composure on a midday weather forecast pointing toward freezing temperatures moving into the northern U.S. Midwest by the end of next week, coupled with a turn lower in the American dollar. The bean market initially tumbled to five-month lows, but as selling interest waned with end-user buying, frost threats and weakness in the U.S. dollar uncover short-covering interest.

The bet on a potential frost event prematurely ending the American Midwest growing season is hardly a sure thing at this stage. Markets were not prepared to turn bullish at this time on a single forecast. However, it did grab the market’s attention, so interest in the extended weather outlook is now heightened and looking for confirmation.

Of course, frost has been an issue a few times these past two weeks on the Canadian Prairies, but to this point the market has paid little attention other than to acknowledge that crop quality, not quantity, may be endangered to some degree.

Nonetheless, the ability of the soybean market to recover from early weakness based on spillover from sharp losses in the crude oil market signals traders are aware of the delayed maturity of the U.S. crop. Given oversold market conditions and uncertainty surrounding 2008 U.S. soybean yields, the market continues to find buyers once spec fund selling slows. November soybeans are struggling, though continuing to maintain chart support at the US$12 a bushel levels, as is canola at $500 a tonne.

So then, we continue with the lead up to Friday’s important U.S./world crop production and supply/demand updates from USDA as the market attempts to get a handle on the size of the late-maturing 2008 U.S. crop. Traders will continue to be influenced by developments in outside markets, but today's move off session lows suggests traders are concerned about yield reductions due to an early freeze event.

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

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