The United States Department of Agriculture issued the final rule for mandatory country-of-origin labelling earlier this week and Canada’s cattle producers hope the changes will ease some market uncertainty.

The final regulations will allow for more flexibility on labelling requirements in the U.S. for meat from animals of American and Canadian origin that are brought together during a production run.

The Canadian Cattlemen’s Association says they still oppose the mandatory labelling and consider it a barrier to trade, but hope the latest changes will improve the situation some.

According to Brad Wildeman, CCA President, the changes provide the same flexibility for use of a mixed-origin label on beef or pork derived from animals imported direct-for-slaughter, as now exists for use with a mixed-origin label on products derived from U.S.-origin animals.

“This should provide U.S. buyers of Canadian cattle and pigs greater flexibility in managing their inventories,” Wildeman says. “We hope this approach enables U.S. facilities to resume accepting Canadian cattle for immediate slaughter along with Canadian-born cattle fed in the U.S. We also hope that this flexibility eliminates, or at least reduces, price discounts by U.S. packers for Canadian cattle.”

Federal officials agree the provisions in the final rule help level the playing field for Canadian beef and pork producers, and state it will strengthen the integrated North American livestock industry.

Gerry Ritz, minister of Agriculture and Agri-Food, says the final regulations address concerns Canada has raised. Work will continue to prevent any unfair harm to the industry, Ritz says. Stockwell Day, minister of International Trade, agrees.

“The bottom line is that the changes to the final rule will help to keep livestock trade moving throughout the integrated North American market and will benefit producers, consumers and processors,” Day says.

Since COOL was proposed, Canada’s beef industry and government have repeatedly raised concerns the labelling could impose unfair costs, especially on Canadian livestock producers, by requiring the segregation of Canadian animals.

Most recently, Canada and the U.S. held formal consultations under the World Trade Organization regarding the adverse impact of the interim regulatory measures on Canadian livestock and meat producers.

The U.S. and Canada are each other’s largest agricultural trading partners. In 2007, bilateral agricultural trade totalled $32.3 billion.

An Ontario agriculture producer is appealing last summer’s decision to terminate Ontario Pork’s single-desk marketing monopoly.

Rein Minnema, a pork producer from Middlesex County, says the Ontario Farm Products Marketing Commission’s ruling to open up pork marketing will force producers to compete against each other for market share.

Instead, he says, hog producers should work together to increase buyer competition for all market hogs in the province.

Minnema has retained Elbert van Donkersgoed, former executive director of the Christian Farmers Federation of Ontario, as a spokesperson. Through van Donkersgoed, Minnema is asking the Ontario Agriculture, Food and Rural Affairs Appeal Tribunal to set aside the decision of the commission and order a plebiscite on the future role of the Ontario Pork Producers’ Marketing Board.

According to van Donkersgoed, the commission was wrong to strip Ontario Pork of its power as sole selling authority for market hogs in the province. He claims there was an inadequate groundswell of support to do so, even though the applicants claimed they represented the majority of the hogs marketed in the province.

“The fact that a small number of producers want to opt out of Ontario Pork’s marketing services or want special arrangements is not evidence that the majority of producers of market hogs no longer need or support Ontario Pork’s authority to control hog marketing,” van Donkersgoed says.

He believes Ontario pork producers should have the opportunity to renew their commitment to orderly marketing through a plebiscite, rather than have their representation lost through the commission’s ruling.

So far, Minnema is one of two Ontario pork producers to go public with grievances against the commission’s decision.

The Saskatchewan Pulse Growers Association is touting the benefits of producers investing in pulse crop research. In an updated study from University of Saskatchewan professor Richard Gray, for every dollar of farmer investment in research, the producer gets back $20.19.

"This shows that the research the SPG is funding is benefiting growers," says Garth Patterson, SPG executive director. "This tells us that we are going in the right direction."

The study, Returns on Producer Investment in Pulse Crop Research, was updated by Gray. His first analysis in 2003 found for every dollar a producer contributes by levy, the return on investment is $15.60.

"When we compared the rates of return to a previous study done in 2003, they increased,” Gray says. “This suggests that the SPG program has become more productive over time, which is likely due to the accumulation of knowledge and germplasm with the research organizations.”

While the current research has been focused on creating better varieties and improving the agronomics of pulse production, Pulse Canada believes producers need to also be investing in areas that will grow demand for the crops.

During Crop Production Week in Saskatoon, Greg Cherewyk, Pulse Canada's director of transportation, says North American interest in pulse crops has a lot of room to grow. Through better understanding of the health, nutritional and environmental benefits of pulse crops, there could be another high-value market for growers to tap.

"There's a lot of fundamental and basic research that needs to be done," Cherewyk says, referring to the analysis of the health benefits of pulse crops.

Cherewyk notes initial discussions with large food manufacturers indicate they like the health and environmental benefits of pulse crops, but more concrete information is needed so those attributes can be sold to the consumer.

"The comments we hear from a lot of the food manufacturers is the information isn't substantial enough yet. So more research has to be done,” he says. "This means the grower has to get involved and they are getting involved in sponsoring that kind of research."

The advent of a second organic food basket network across Quebec would be a step back for the emerging sector, members and supporters of the original network say.

“We need to avoid divisive actions (and) focus on concrete initiatives that will improve the lives of producers,” says Jean-Martin Fortier, owner of the Montreal-area Jardins de La Grelinette, one of approximately 100 Quebec farms that belong to the Community Supported Agriculture organic food basket network.

Founded in 1995 by Equiterre, a government and farm union-backed group that carries out citizen-based projects, CSA farms sell food products like vegetables, meats, honey, apple products and cheeses to about 26,000 families every week.

Last month, one of the CSA’s biggest participants, les Jardins de la Montagne, announced it was quitting the network to join a new one planned by the Union paysanne. The small group is a vocal opponent of Quebec’s farming federation, the Union des producteurs agricole.

Benoît Girouard, a spokesperson for Union paysanne, says there are challenges to creating attractive baskets throughout the year. He says although les Jardins de la Montagne and “four or five” other organic food producers tried to find solutions to the problem, Equiterre turned down their proposal to allow 15 per cent imported food in their baskets. As a result, the group is branching off.

“They can only fill them with tubular vegetables (so) consumers are turning to grocery stores for fresh produce,” Girouard says. The result is a high rate of consumer turnover, plus producer frustration.

“Equiterre has become detached from the economic reality of farms and farming,” Girouard says.

While acknowledging producers face challenges with the CSA, the general manager of the Quebec Federation of Organic Agriculture, Geneviève Blain, believes it has become an important source of revenue for many producers. A rival network could threaten its viability.

“What we hear is that (the CSA) is very helpful for new organic food producers and for those in transition,” Blain says. In addition to being another sales outlet, she adds that customers’ payment ahead of the growing season provides a nice line of credit.

Blain says Equiterre also promotes and adds credibility to the network. “They have built up a lot of experience in the field,” Blain says. “I think it would be a shame to dilute that force.”

An entity mandated to help develop and market a Prince Edward Island brand has been sold to the private sector.

FoodTrust of P.E.I. was established in 2001 as a not-for-profit company under the umbrella of the P.E.I. Department of Agriculture. It was charged with developing specialty products for domestic and international premium markets. Its major success to date has been a line of premium potato products marketed in supermarkets in Ontario and Quebec.

Shareholders of Mid-Isle Farmers make up the majority ownership in the new company. Mid-Isle Farmers is a seven family co-operative located in Albany, in the central part of the province. 

Conservative agriculture critic Jim Bagnall raised concerns about the sale because the family of newly appointed agriculture minister George Webster is involved with Mid-Isle Farms. A number of growers supplying product marketed by FoodTrust also submitted a bid to purchase the facility. Webster is also a veteran cabinet minister.

Although the sale was not finalized until just before Christmas, the new owners operated FoodTrust for several months before the sale was complete.

Bagnall has also called for disclosure of the sale price, adding the province should take extra care in the process given Webster’s connection to the winning bidder.

Elmer MacDonald, chair of the new company, says they’re looking to a prosperous future.

“FoodTrust 2008 looks forward to the opportunity of building on the unique success that the former company has achieved in the marketplace,” he says. “There are many exciting prospects for growth in the marketplace for high quality Prince Edward Island products, and we look forward to exploring and developing new markets and new products that can improve returns to the Island economy.”

Ocean Spray, processors of two-thirds of the world's supply of cranberries, is in the process of expanding into New Brunswick.

A representative of the Massachusetts-based company was in the province earlier this week to outline the company’s plans to invest $90 million in a small village north of Moncton, in the eastern portion of New Brunswick.

The company plans to develop over 3,200 hectares of farmland as part of a $90-million investment. World demand for the fruit is outpacing production, so the company says it’s also welcoming local producers into the co-operatively run company.

Plans are currently undergoing a provincial environmental assessment.

Canada’s dairy industry has released a draft version of a code of practice for dairy cattle.

The draft Dairy Code was developed under a newly revised Code of Practice development process led by the National Farm Animal Care Council. The Dairy Farmers of Canada decided in 2006 to update the previous version of their Dairy Code of Practice, established in 1990. 

The draft Dairy Code can be viewed and submissions made through the National Farm Animal Care Council’s website, http://nfacc.ca/CodesOfPractice.aspx, until Feb.13. A final Recommended Code of Practice for the Care and Handling of Dairy Cattle will be ready by March 31.

Dairy producer Michael Hall chaired the code of practice development committee and says the practices are for many users.

“The primary end user and target audience for the Dairy Code is the farmer. However, codes will also be used by others and should reflect standards that are acceptable to society as a whole. Dairy farmers are committed to responsible animal care practices that are based on sound science. This is reflected within the draft dairy code.” 

Canada initiated the development of codes of practice for the care and handling of farm animals in 1980. Since then, codes of practice have been developed for virtually all farm animal species in Canada.

In an effort to foster better and more agriculture trade with India, federal Agriculture Minister Gerry Ritz signed a Memorandum of Understanding with the Indian government this week.

"This will provide a framework to increase our exports to India and resolve trade irritants more quickly," Ritz says.

According to Ritz, Canada already exports half a billion dollars worth of agriculture commodities and products to India each year. The MOU was designed to protect that agricultural trade while fostering new opportunities, such as using Canadian hog genetics to improve Indian pork production. Pulse Canada and Canada Pork International joined Ritz on the trade mission.

The trade mission also travelled to Hong Kong where the Minister’s focus switched to the Canadian beef industry and getting more product back into Hong Kong.

"The beef industry told us we had to start getting our foot in the door in markets such as Hong Kong while we continue to push for full market access," he says.

Hong Kong continues to limit imports of Canadian beef to muscle cuts from animals under 30 months of age. The government's approach is to try and get them to accept some bone-in product and slowly work towards a complete opening. Many countries such as Hong Kong continue to restrict Canadian beef imports, not fully re-opening their markets after they slammed shut in May of 2003 over the first case of BSE.

"To get into some of these countries again and rebuild our supplies, we will take what they are asking for. We will develop a beef product that will fit the niche that those customers are asking for. We will be there to do the job."

The Alberta government has issued a report examining the advantages of cow-calf age verification.

The report includes discussion of the collective, individual and operational benefits of age verification as well as an analysis of the implementation cost per head for a 250-head herd. Age verification became mandatory for Alberta cow-calf producers on Jan. 1.

Collective benefits include maintenance of Canada’s current World Organization for Animal Health BSE status and broader access to potential new international and domestic markets. Currently, Canada has full access to only seven countries.

Many premium markets, such as Japan, only allow beef from animals 20 months of age or younger, while North American companies like McDonald’s are also favouring suppliers with age verification records.

The report notes some industry players believe Alberta should continue to concentrate on the American market, which currently accounts for 27 per cent of Alberta production. The province’s exports to other countries are at six per cent of production. However, research shows Canadian animals have an average discount of $15 per head in the U.S. market, while they achieve an average premium of $85 per head in other international markets.

Age verification benefits individual producers with improved herd production management and the ability to access additional marketing opportunities through product differentiation, according to the report. It notes the Electronic Auction Market has seen premiums on age-verified fed cattle of $2 per hundredweight, or about $30 per head. Although values fluctuate, age-verified cattle consistently outsell commodity cattle.

The report states a major operational benefit of the new system is an increase in critical mass of age-verified cattle required to properly serve the domestic and international markets. This is estimated at around 70 per cent of slaughtered cattle, much higher than the current reporting level in Alberta of 39.8 per cent.

Producers have the choice of reporting actual birth dates or using the initial calving date for a group of animals. Based on a 250-head herd, the report calculates a cost of $2.93 per head. Costs include facility modifications, equipment rentals or purchases, record keeping and reporting.

The full report, called the Benefits and Costs of Mandatory Age Verification for Cow-Calf Producers, is available at www.agric.gov.ab.ca. Search under “mandatory age verification.”

On Monday, Jan 12, the United States Department of Agriculture released its annual Production Summary (the final 2008 U.S. corn and soybean crop estimates), monthly supply/demand reports (2008-09 carryover), U.S. winter wheat seedings report (first survey-based look at 2009 U.S. winter wheat acreage) and U.S. quarterly grain stocks report (September/November implied disappearance). One of the biggest data releases of the year.

In a nutshell, USDA projections of larger than expected 2008 U.S. production for corn and beans, along with cuts to demand, forced ending stock projections to higher than expected levels for both crops. The immediate market response was a big sell-off.

U.S. wheat numbers were not bearish, but wheat markets were also pulled lower by negative row crop price action.

The following table summarizes this morning’s USDA January supply/demand, crop production, grain stocks and winter wheat seedings report. U.S. estimates are in billions of bushels except soyoil, which is in billions of pounds. World crop forecasts are in millions of metric tons.

USDA 2009 Winter Wheat Seedings 
  
                 Monday 
                 2009        Average     Range          2008 
                 estimate                              Seedings 
  
 All Winter Wheat 42.098     44.178   42.920-45.800    46.181 
 Hard Red Winter  30.2       31.096   30.500-31.900    31.220 
 Soft Red Winter   8.3        9.381    8.470-10.900    11.200 
 White Winter      3.6        3.763    3.400-4.000      3.761 
  
  
 USDA Grain, Soybean Production 
  
              Monday 
              2008-09                             Nov      2007 
              Annual     Average     Range        USDA     USDA 
  
 Corn        12.010      11.982   11.880-12.078   12.020   13.074 
 Soybeans     2.959       2.910    2.879-2.940     2.921    2.676 
  
  
 USDA U.S. Grain Carryout 
  
                  Monday    2008-09   December 
                  2008-09   Analyst   2008-09 
                  estimate  estimate  USDA 
  
 Soybeans          0.225      0.186     0.205 
 Corn              1.790      1.489     1.474 
 Wheat             0.655      0.600     0.623 
 Soyoil            2.143       n/a      2.033 

 
 USDA World Carryover 
  
                       Monday     December 
                       2008-09    2008-09 
                       estimate   estimate 
  
 Wheat                 148.4      147.4 
 Corn                  136.0      123.8 
 Rice                  82.66      80.85 
 Soybeans              53.94      54.19 
 Soyoil                 2.55       2.48 

Soybeans

U.S. soybean production in 2008 totalled 2.96 billion bushels, the fourth largest on record. It’s up one per cent from the November forecast and up 11 per cent from 2007. The average yield per acre is estimated at 39.6 bushels, 0.3 bushels above the November forecast, but 2.1 bushels below last year’s yield. Harvested area is up 16 per cent from 2007, to a record 74.6 million acres.

U.S bean ending stocks were expected to be revised slightly lower Wednesday but instead they were upped slightly. Interestingly, world bean stocks were revised down slightly, due to a cut to projected Argentine production.

Overall, USDA soy revisions were bearish. U.S. bean ending stocks at 225 million is still tight historically even though traders were looking for them to fall below 200 million. With the continued weather problems in Argentina and Brazil and fresh export demand from China, downside price risk this week was limited after the initial shock to the system on the open.

Corn

U.S. corn production in 2008 is estimated at 12.1 billion bushels, up one per cent from the November forecast, but seven per cent below last year's record high. Average yield is estimated at 153.9 bushels per acre, the second highest on record and up 0.1 of a bushel from the November forecast and 3.2 bushels above 2007. 

Corn futures plunged sharply Monday/Tuesday and were expected to open slightly higher Wednesday (at time of writing, ahead of open). The USDA reports were very bearish for corn. USDA raised their 2008 crop estimate by 81 million bushels while cutting usage in most categories. Feed use was lowered 50 million bushels, ethanol use was cut 100 million and exports were pushed 50 million bushels lower. This led to the U.S. ending stocks forecast rising to 1.790 billion bushels, up nearly 300 million from pre-report trade expectations and 316 million above year-ago. However, weakness later in the week may be limited somewhat by soybeans, which could find support from bullish South American weather.

Wheat

U.S. wheat futures saw neutral to slightly positive USDA data, but wheat felt the pull of any selling pressure from the corn/bean sectors. USDA estimated winter wheat seedings at 42.1 million acres, down 4.1 million from last month and 2.2 million below the average pre-report trade estimate. While this is bullish, the market still declined to the time of writing by USDA's increase in 2008/09 U.S. wheat ending stocks estimate to 655 million from 623 million last month. The market was looking for a decline to 608 million. In addition, USDA raised the world wheat ending stocks estimate. So the bullish impact of the acreage number was compromised by the ending stocks data.

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.