The drought gripping a large part of Alberta and west-central Saskatchewan doesn't appear to be easing. The latest drought watch maps from Agriculture and Agri-food Canada's National Agroclimate Information Service shows just how little precipitation the area has received since the start of the growing season.

In the area that covers Rosetown and Kindersley, Sask., and Coronation and Hanna, Alta., less than 50 millimetres of rain fell between May 7 and July 5. That is less than 40 per cent of the normal precipitation amounts.

The impact of this has been poor crop and pasture growth. The latest crop report from Saskatchewan Agriculture says "germination is uneven" and "some crops have not emerged."

While the provincial governments of Alberta and Saskatchewan have moved with alterations to their crop insurance programs to help producers manage the dryness, the National Farmers Union says the federal government needs to move forward with support under the AgriRecovery program.

"For many farm families, the determining factor for whether they will be able to continue farming will be the adequacy and the timeliness of your government's response under the AgriRecovery framework," stated Stewart Wells, NFU President, in a letter to federal Agriculture Minister Gerry Ritz.

The NFU says there is a mechanism in the AgriRecovery framework where a formal assessment of a situation can occur if it's national in scope, and if a request for the assessment is made by a national organization.

"On behalf of the National Farmers Union, I am making the formal request for the federal government to initiate an assessment."

Wells says in order to speed up drought relief efforts, the federal government should cover the full cost of disaster assistance for things such as immediate cash payments, debt-servicing relief, hay purchase and transport programs, and cattle relocation programs. This would save time by avoiding protracted negotiations regarding multi-party funding.

"While provincial governments must have effective input into solutions, a federal offer to cover all costs will dramatically speed implementation and provide affordability in provinces where there are relatively few people in proportion to the tens-of-millions of acres affected by this drought.”

As the pressure increases on the federal government to move forward with support, some organizations are doing what they can to help drought-affected farmers and ranchers.

Ducks Unlimited Canada is aiming to make close to 36,000 acres available for hay or grazing in 2009.

Tenders for grazing and haying are open until July 13. A complete list of available lands and full program details can be found at http://yourland.ducks.ca.

An official with the Western Beef Development Centre is advising Saskatchewan beef cow-calf producers from Regina to Kindersley to start planning alternative winter feed sources.

According to WBDC Vice-President Dr. Paul Jefferson, "Saskatchewan producers who are starting to cut their hay crops will be disappointed with yields this year, especially in this region. Hay yields depend on spring weather conditions, and this year's cold and dry April through June weather will result in low hay yields."

Jefferson has been using historical weather and hay yield data to examine long-term trends in hay production for Saskatchewan. By plugging the last three months of weather from 16 sites into a statistical model, he predicts locations like Regina, Moose Jaw, Rosetown, Kindersley and Nipawin to meet 40 to 66 per cent of their long-term yield average. All are expected to have yields "well below average."

WBDC says the hay yield predictions are generally consistent with the rainfall tracking by Agriculture and AgriFood Canada's Drought Watch. There is one difference at the Moose Jaw location which AAFC lists as mid-range for rainfall, but the WBDC model predicts a well below average hay yield. The difference results from the weighting of precipitation in the WBDC model, while the AAFC is based on accumulated rainfall from April 1 to June 30.

The WBDC says hay supplies for the winter of 2009-10 will be tight across Saskatchewan. Last winter was long and cold, resulting in the depletion of hay and winter feed reserves for many beef cow-calf producers. This means that regions with low hay yields in 2009 will need to source additional feed for the winter of 2009-10. Adjacent regions may have limited hay supplies for sale based on the model results. Trucking costs from regions with surplus hay will be a deterrent to movement of hay over a large distance.

Beef producers in the affected regions are strongly encouraged to plan for winter feeding alternatives such as crop residues, greenfeed from annual crops, early weaning of calves and heavy culling of the cow herd this fall.

The WBDC recommends producers using crop residues for winter cow feeding contact a beef nutritionist for ration advice to ensure adequate nutrition of their herd.

Changes to Alberta’s crop insurance program should expedite drought loss payments to growers hit hard by severe drought conditions.

For the first time, producers will be able to use average area yields (determined on a township level) to speed up pre-harvest claims, giving them the option of having their crops released over the telephone without an inspection.

Payments will be issued following confirmation the crop has been put to an alternate use such as grazing, silage or spraying out the crop to preserve moisture reserves.

Adjusters have been moved to the hardest-hit areas to determine the average yield numbers to be used, says Merle Jacobson, vice-president of risk management with Alberta Financial Services Corporation.

Jacobson advises producers to file a claim form with their local district office once deciding whether to take advantage of the program changes. This should ensure the process happens smoothly and quickly.

The move was made following growing concerns over the potential for critical shortages of winter feed stocks, putting Alberta’s cattle industry at risk.

Alberta’s beef herd of 1.85 million head could shrink by at least 10 per cent and as much as 28 per cent this year according to Kevin Boon, vice-president of Alberta Beef Producers.

Worry over looming feed shortages has already prompted some producers to sell cow-calf pairs at a discounted price, well before calves would normally be sold separately, according to Ken Ziegler, a beef specialist with Alberta Agriculture.

More information on the insurance program changes can be found at www.afsc.ca or by phoning 1-888-786-7475.

Canada's hog sector has set out a five year plan to help the industry survive the current economic challenges.

The plan was prepared by the Canadian Pork Council and addresses "a number of pressing issues that must be urgently addressed if the Canadian hog and pork sector is to have a viable future," the CPC states in a news release.

"Producers know that in order to be profitable in future, they must be committed to change," says Jurgen Preugschas, CPC chair. "They know that many of the fundamentals that resulted in strong growth in the past no longer exist but that new opportunities will arise. This plan outlines a roadmap to ensure the industry is still here to take advantage of those future opportunities."

The document outlines precisely what a successful transition would require, including a special H1N1 recovery plan loan, adjustments to the emergency advances of advance payments program and a hog farm transition payment program.

The plan provides a roadmap through to 2014 and describes several characteristics of a successfully restructured industry, including:

• domestic disappearance of Canadian pork totalling 730,000 tonnes, an increase of 150,000 tonnes over 2008
• exports of 4 million live hogs to the U.S., 5.3 million fewer than 2008 
• total pork exports of 1 million tonnes, 20 per cent of which will be to the U.S.
• total domestic slaughter of 21.5 million head, 0.2 million fewer than 2008 
• a reduction in total production from 31 million in 2008 to 25.5 million pigs
• domestic market share of 88 per cent compared with 75 per cent in 2008

The transition plan also includes several additional strategic initiatives that will contribute to the long-term competitiveness of the industry, states the CPC.

What’s being described as a perfect storm for increased soybean acreage has resulted in a new record for oilseed in Ontario.

Ontario’s seeded soybean acres have jumped to 2.4 million acres. That’s a 14.3 per cent increase over 2008, and 100,000 acres more than the previous high set in 2004.

According to OSG General Manager Dale Petrie, the complex scenario that led to the jump started when growers ended the 2008 growing season “feeling good about their soybean yields and profitability.” Indeed, the 2008 growing season was virtually aphid-free in Ontario, with good weather in most parts of the province and ample rainfall.

At harvest time, wet weather meant fewer acres of winter wheat were planted, opening the door for more soybeans.

Then this spring, high fertilizer prices and cool, wet planting conditions caused more of what’s popularly called corn-soy “swing acres” to be planted to soy instead of corn (soy requires fewer inputs).

Petrie also says premium opportunities for identity-preserved beans remain firm, attracting growers. The Japanese market turned away from China’s soybeans due to recent food safety scares, creating stronger demand for Canadian and U.S. soybeans.

Premiums for this year’s crop have softened a bit now that the larger-than-planned acreage figures are in, but they’re still lucrative.

As well, some white and coloured bean acreage switched to soy, and winter wheat acreage lost to winter kill was also planted to soybeans.

Petrie says the final gale in this perfect storm was a spring price rally, which saw soybeans rise from $8 a bushel in early March to around $10 in mid-June. He says the rally was driven by continued strong U.S. exports of soy and low carry-out numbers.  

Now, it’s time to wait and see what happens to yields. Crosby Devitt, OSG research and innovation manager, says the next two months will be crucial for the development of the 2009 Ontario soybean crop. 

“Programs are in place to monitor and provide recommendations to growers for managing potential yield-robbing pests such as soybean aphids and other insects,” he says.

He also points out that through collaboration between OSG, agribusiness and the provincial and federal governments, Ontario producers have access to a strong network of qualified crop advisors to help them maximize field crop yields and economics.

Statistics Canada reports Canadian agriculture producers planted 528,000 acres of fruits and vegetables in the spring of 2009, down three per cent from last year.

Vegetable growers planted about 240,000 acres of vegetables, of which they expect to harvest 238,000 acres. Harvesting area is down 1.3 per cent from 2008. More than half -- 58.2 per cent -- of the 2009 crop will go to fresh markets and the rest for processing.

Quebec and Ontario continue to represent 83.7 per cent of the expected vegetable area.

The five major processing vegetables -- sweet corn, green peas, carrots, beans and tomatoes -- accounted for 58.7 per cent of the total expected vegetable area in Canada.

Growers indicated increased plantings of lettuce, broccoli, cucumbers and gherkins, leeks and shallots. They reported, however, fewer green peas, tomatoes, dry onions and carrots.

Fruit operators planned to cultivate 288,000 acres of fruit, of which 190,000 acres, around two-thirds of the area, will bear fruit this year. This fruit-bearing area is down 3.6 per cent from 2008, Statistics Canada reports.

About two-thirds of the fruit from the fruit-bearing area will be processed, including almost all the low-bush blueberry, cranberry, vinifera grape and sour cherry area.

Apples, blueberries and grapes account for 82.6 per cent of the planted area in 2009. New planting for apples along with other tree fruit such as peaches and pears has declined, specifically in Ontario. On the other hand, new plantings of vinifera grapes and cranberries increased this spring.

The latest United States Department of Agriculture seeded acreage report could mean pressure on Alberta prices, says a market analyst with the province.

Despite declining crop conditions Alberta producers may see an impact from the USDA report, says Charlie Pearson, market analyst with Alberta Agriculture. There were surprises in the report not forecast by the experts, he says.

The 2009 corn planted area, estimated at 87 million acres and the second largest planted acreage since 1946, is two million more acres than expected.

Pearson points to favourable weather conditions across the U.S. Midwest that could mean higher corn production with a corresponding pressure on corn prices.

While spring wheat estimates have come in at 13.8 million acres, 700,000 higher than expected, barley acreage has declined to 3.6 million acres, down 14 per cent from 4.2 million in 2008 and the second lowest on record.

Pearson says this could make for tight supplies of malt barley, a potential advantage that could be overshadowed by prospects of a good crop in Europe.

Canola estimates are 850,000 acres, down 16 per cent from 2008, with major growers in Montana and the Dakotas facing cool, dry conditions similar to their Alberta counterparts.

Pearson warns Alberta growers of the need to have a marketing plan, even if it looks like they are not going to get any crop, or a low-quality crop.

“It is really important to look at tools to mitigate the risk,” he says.

In situations where producers may have already signed forward price contracts and there is concern about having any crop to sell, Pearson suggests buying calls as an insurance policy. He also notes Alberta’s crop insurance program is unique since it offers a standard variable price benefit.

The British Columbia government has created a new ranching task force to "set a new direction for the B.C. cattle industry."

Agriculture Minister Steve Thomson says the task force will focus on ways government and industry can work together to ensure a more profitable, self-sustaining industry in the long term.

"It's become obvious we need to explore innovative ways of doing business in order to sustain this vital industry," he says.

The task force has been given a short time frame to work in.

"My job is to ensure the task force delivers its goals of executable plans in 90 days," says MLA Terry Lake, co-chair of the task force, during a media teleconference.

Industry expects the task force to address the financial status of B.C. ranchers, crown range, which much of the industry depends on, water access and agriculture’s profile within government.

Specifically, industry wants more flexibility within the Agricultural Land Reserve, reform of the provincial sales tax, ways to mitigate B.C.'s carbon tax, increased marketing of B.C. grass-fed beef and help with stringent new meat inspection and slaughter waste disposal regulations.

The task force will operate on a tight budget, with no new provincial funding to implement any recommendations they come up with.

"All proposals will cost money," says Roland Baumann, task force member and president of the B.C. Cattlemen's Association. Yet he acknowledges funds may be "hard to find."

Thomson says the province wants the task force to focus "on regulatory change within our current resources."

Lake says one aim is to increase B.C. consumption of "locally-grown, locally-finished beef."

However, that goal was already set out by a previous meeting of the beef industry. Baumann admits creating an effective program is difficult.

"Supply is a challenge as our grass-fed beef is not available year-round," he states, adding "our biggest issue is we're cattle producers, not cattle marketers."

MLA Lake will co-chair the task force with Baumann. Other members include the presidents of the B.C. Association of Cattle Feeders, B.C. Breeders and Feeders Association, B.C. Food Processors Association and Andy Dolberg, executive director of the B.C. Agriculture Council.

It was the first variety registered in the Western Canadian General Purpose class of wheat in 2007 and it's now being promoted to growers as a high return crop well-suited for ethanol use.

CDC Ptarmigan is a soft white winter wheat with a lower protein concentration and higher starch content than the current dominant hard red winter wheat varieties.

"That is of particular interest to the ethanol industry," says Edgar Hammermeister, agronomist with Saskatoon-based Western Ag Labs. The company provides crop planning advice and agronomic analysis to growers.

Hammermeister, who also farms in the Alameda, Sask. area, says the ethanol companies in Western Canada are becoming more familiar with CDC Ptarmigan and may soon start requesting it for their processing.

"What the ethanol plants are beginning to learn through their bench testing right now is the potential ethanol yield out of the wheat. And when they start seeding the volume and gaining more ethanol, we're hoping we can start getting the contracts where a premium comes back."

So far the premiums aren't available, according to Hammermeister, but he says this variety already has the potential to provide high returns to growers.

CDC Ptarmigan has a very high grain yield, 115 per cent, when compared with CDC Falcon in the Central Winter Wheat Cooperative Trials. 

When compared to growing spring wheat, the return potential looks better, according to Hammermeister, because the cost to produce the fall-seeded crop is much less.

"It's normally ahead of wheat midge and in most years it's ahead of fusarium and so those are costs not transferred onto winter wheat," says Hammermeister, referring to pesticides and fungicides applications of those crop issues occur in spring wheat.

"So you have lower costs and the genetic yield potential, generally 20 per cent higher yield potential in winter wheat and, when you start penciling it out, you start having very nice dividends on the bottom line,” Hammermeister states.

Hammermeister says even though winter wheat is priced on average a dollar a bushel lower than spring wheat, the combined production gains and cost savings still give the crop a much better return potential.

Whether the CDC Ptarmigan garners more acres in this year's fall seeding season, remains a question.

"It's a little bit of a chicken or the egg process right now. The ethanol plants are interested but they are wondering about volumes and farmers are thinking, 'I like what I see on the economics but what about markets?'"

Hammermeister says if they can get both growers and the ethanol industry moving forward together, the CDC Ptarmigan will become a more widely grown variety on the Prairies.

In the latest Statistics Canada 2009 acreage report, the agency pegged mustard area in Saskatchewan at 420,000 acres.

That's down 10,000 from its April forecast, but up from 370,000 in 2008. Alberta mustard area increased 5,000 acres from April to 125,000, compared to 110,000 last year. Total mustard area is projected at about 545,000 acres, up from about 480,000 acres last year.

New crop mustard prices have been on the rise in the past week or three due to the drought concerns in some of the mustard growing areas of the Prairies. Yellows jumping to as high as 40 cents a pound and oriental mustard to 31 cents a pound picked up on farm for September 2009-July 2010 movement with full act of God.

These prices are sporadically available, though buyers appear to be slowing a little on the uptake at these levels. Quotes nearer to 35 cents for new crop yellows with a full act of God are more readily available. There is not much interest from buyers for new crop brown mustard at this time.

Old crop yellow are currently hovering around 40 cents a pound, oriental at 33 cents a pound, and brown at 26 cents a pound picked up on farm for July movement.

Canadian Mustard Seed Supply-Demand Estimates 
(acres, 000’ tonnes)

Year        2004-05 2005-06 2006-07 2007-08 2008-09 2009-10
Acreage         783     532     335     435     480     545
Production      305     203     109     114     161     167
Carryin          92     194     190      91      26      38
Stocks          397     397     299     205     187     205

Disappearance
Total Export      119  133  153  168  130  150
Seed/Waste/Other   68   57   39    8   11    8
Domestic           16   16   17    3    8    5
Usage             203  207  208  179  149  163

Carryover         194  190   91   26   38   42

Looking ahead, fundamentally speaking, no real sense of a market that needs to suddenly careen lower as the 2009-10 supply/demand balance sheet still appears rather snug.

Using yield about 90 per cent of average results in 2009 mustard production about 167,000 tonnes -- year-end carryout currently projected at about 42,000 tonnes -- supplies simply holding the line relative to demand projections. Probably means mustard prices going forward should hold up rather well and the need remains to provide the economic incentive to boost acres in 2010.

PFCanada made the aggressive move back at Christmas to forward price upwards of 50 per cent of expected 2009 production. Viterra at the time was offering new crop contracts with an Act of God clause at 32-34 cents a pound for oriental mustard and 37 cents for yellows. Given current production risks, I see no need to do any more at this time.

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.