Workers at a poultry slaughtering facility in New Brunswick have reached an agreement with the company that could be their future employers.

Members of the United Food and Commercial Workers Local 1288 signed a collective agreement on Sept. 18 with poultry processors Olymel and Westco.

The two companies formed a partnership to build a poultry slaughterhouse in Claire, in northern New Brunswick. The new facility could result in the closure of the existing Nadeau poultry slaughter house in the region. Nadeau is owned by Maple Lodge Farms, an Ontario-based company with a slaughter contract with Westco.

While the agreement between the union and Olymel and Westco goes into effect as soon as the new plant opens, its signing is a show of support by the workers, who have been protesting the new facility.

Last week, employees blocked trucks carrying chickens out of the province for processing. The two day protest stopped chickens from a local Westco producer from leaving the facility. Workers were protesting the layoff of 175 of the plant's 275 workers.

"By signing this agreement, our union has laid the foundation of a future collaboration," says Jean Guimond, the union local president. "Our union will do everything possible to ensure that men and women with relevant experience in the New Brunswick poultry industry are hired."

The birds were bound for an Olymel slaughterhouse in Berthierville, Que., as part of a 2008 partnership between Olymel and Westco.

Under that agreement, Westco and poultry giant Olymel, based in Montreal, plan to consolidate their production, slaughtering, cutting and deboning operations. Westco says they will be able to better serve the Maritimes market.

From the get-go, the two companies tried to buy the Nadeau facility, which is contracted to process Westco poultry. It’s owned by Maple Lodge Farms of Brampton, Ont., a family-owned firm that employs 2,200 people and processes a half-million chickens a day for export to more than 30 countries.

When that failed, Westco and Olymel announced plans to jointly build a $30-million slaughterhouse in New Brunswick by the end of 2010.

Yet the region's poultry industry isn't large enough to support two slaughterhouses.

Westco owns hatcheries, breeding farms and shipping companies in N.B. and Manitoba. It announced it would transfer most of its slaughtering volume to Olymel's Quebec plant until the new plant opened, unless they could reach a deal with Maple Lodge Farms to buy the Nadeau facility.

Westco's birds represent roughly 80 per cent of the poultry slaughtered at the Nadeau facility. The New Brunswick facility has a 12,000 bird-an-hour slaughter capacity.

This summer, the federal competition bureau gave Westco the green light to sell its birds to the buyer of its choosing. Later, the N.B. Court of Appeal ruled the chickens could be sent outside the province -- decisions that paved the way for last week’s standoff.

Officials with Maple Lodge Farms did not return calls for an interview.

However, officials for both Olymel and Westco say they are continuing with plans to build the new slaughterhouse, although they would still prefer to reach an agreement with Maple Lodge Farms.

"We've made them many offers," says Olymel spokesperson Richard Vigneault.

"They include offers to buy the Nadeau facility, the creation of a limited partnership for the operation of the facility, and/or an agreement to pay market value for slaughtering during construction of the new slaughterhouse, a move that would have avoided the need to transfer chickens out of the province."

Westco president Thomas Soucy says this isn't what his company wants.

"(Maple Lodge Farms) has categorically rejected all of our offers, and unfortunately, the workers are now paying the price. Our first choice has always been to process our chickens in New Brunswick."

Canada's biggest flax market says a recent shipment of the oilseed crop contained prohibited material.

On Sept. 8, the European Commission issued an alert that a bulk shipment of Canadian flax contained traces of a genetically modified material.

"To date, we have not seen any laboratory results that would prove this to be the case," says the Flax Council of Canada in a news release issued Sept. 11.

However, European authorities say they've found traces of a genetic marker called NPT-II. There's speculation the marker came from a genetically engineered variety of flax known as CDC Triffid. It was developed in the late 1990's but was never approved for commercial production in Canada.

Barry Hall, executive director of the Flax Council of Canada, says this case caught them off guard, because no GM flax is grown in this country. The genetic marker, however, is present in some herbicide-tolerant canola varieties.

"It's possible there's some cross contamination taking place here," Hall says.

The Flax Council has received samples from the shipment in Europe and is working with Plant Biotechnology Institute in Canada and the Canadian Grain Commission's Grain Research Laboratory to analyze whether there is the presence of these genetic markers and, if so, where they came from.

While the industry works on this issue, Canadian growers are seeing prices drop and buyers back away from the market. Prices are down by $3 per bushel on average and one market analyst is worried about producers being able to market their flax this fall.

"The EU takes anywhere from 400,000 to 600,000 tonnes of our flax every year," says Larry Weber of Weber Commodities in Saskatoon. Weber also works with the Saskatchewan Flax Development commission on flax marketing strategies for producers.

Most flax exported to Europe has to go through the St. Lawrence Seaway. Shipments have to move before freeze up and closure of the seaway in about 90 days.

"We've got a huge flax crop coming so the longer this does not get resolved the more that it is going to impact prices," Weber says.

Europe's zero tolerance policy for the presence of GM material in flax is something that is going to have to change if Canada wants to avoid further cases like this, Weber states.

"If you've got two and a half per cent dockage, which is allowable in export flax, if one per cent of that dockage is GM canola, that's past your boundary for zero tolerance," Weber says. "It really is a ridiculous rule and it needs to be addressed."

Canada’s beleaguered agri-food processing sector received a shot in the arm last week from Ottawa, with a $50 million loan program to eligible industries.

The AgriProcessing Initiative will give support to help companies purchase and install equipment in Canadian facilities. The purchases must be geared toward adopting new manufacturing technologies and processes.

The federal government says the initiative may also help defray  costs for contracting external expertise for services related to equipment installation, and consultation, design, and advice regarding novel manufacturing technologies, processes and products.

Industry reaction was quick in Ontario, Canada’s food processing hub, which has been slammed by the recession with companies shutting down in vital farming areas such as the Niagara region.

“Food and beverage processors are an integral component of the agri-food value chain,” says Jane Graham, executive director of the Alliance of Ontario Food Processors. “This announcement will help our members to be competitive by making much-needed capital investments, such as upgrading equipment.”

She notes the processing sector is Ontario farmers’ best customer, buying about 70 per cent of everything grown and raised in the province. But processing is capital intensive and the highly competitive industry needs help.

That’s where the new AgriProcessing Initiative comes in. The federal government predicts new processing technologies and projects will create new, more stable markets to improve income opportunities for farmers and the processing sector.

At the initiative’s announcement in Guelph, Parliamentary Secretary Pierre Lemieux, who appeared at the podium with Member of Parliament Joe Preston, said the funding will help processors “weather the credit crunch and build their businesses for the future.”

At a simultaneous announcement in Quebec, Honourable Jean-Pierre Blackburn, Minister of National Revenue and Minister of State (Agriculture), said Ottawa knows that a healthy processing sector will drive the economy’s recovery.

“This investment will keep [processors] on the cutting edge here at home and around the world,” he says.

Manitoba is the first province in Canada to implement a mandate requiring that diesel fuel contain a renewable fuel blend.

Beginning Nov. 1, all diesel fuel in the province must contain a two per cent biodiesel blend.

"Today's announcement of a biodiesel mandate once again reinforces Manitoba's reputation as an innovator when it comes to the development of the biofuels industry," says Jim Rondeau, Minister of Science, Technology, Energy and Mines in a news release.

The minister says the province will consider a higher mandate once there is a Canadian fuel standard in place for biodiesel blends above five per cent.

"Biodiesel will benefit Manitoba's agriculture communities while reducing greenhouse gas emissions by 56,000 tonnes, the equivalent of taking 11,000 cars off the road annually," he says.

The Manitoba Canola Growers Association is pleased with the decision. Biofuels committee chairperson Brian Chorney believes this will create another level of demand for the oilseed crop.

"This translates into approximately a 46,000 tonne domestic market for canola seed in Manitoba," Chorney says.

Having a local market of that size will improve canola’s price competitiveness according to Chorney, because local buyers and growers won't have to deal with foreign exchange issues, ocean freight costs and even domestic freight issues.

The other major benefit is there will also be a place to market canola that doesn’t meet human consumption standards.

"Having a market out there that will take off-grade canola and still be able to offer a reasonable price for it is positive," he says. "If a frost does come earlier than we want, we need to have a market that can take off-grade canola."

There is currently one company producing biodiesel in Manitoba and two more plants under construction. The MCGA believes canola will be choice feedstock for producing the biodiesel at these plants.

"Canola-based biodiesel makes sense from a quality perspective. What we like to say is that for the same reason (canola oil) doesn't clog your arteries, we won't clog your fuel filters in your combines, tractors or trucks," Chorney says.

The provincial government says it hopes this mandate reduces the dependence on imported fuel.

"With the new mandate and incentive, Manitoba is going to become a force in fuel production, no longer relying solely on imported fuels," Rondeau says.

To help promote development of the province’s bio-diesel industry, the government is replacing the current fuel tax exemption with a 14 cent per litre, five-year production grant. It believes this will help keep Manitoba competitive with incentives offered in other North American jurisdictions.

A sweeping trade agreement between Ontario and Quebec is welcome news for agricultural producers across central Canada, farm leaders in both provinces say.

"(The agreement) addresses our concerns in regards to our respective marketing mechanisms and the protection of Quebec and Ontario food composition and labelling standards," says Christian Lacasse, a Quebec dairy producer and the president of the province's farmers’ union, the Union des producteurs agricole.

For her part, president of the Ontario Federation of Agriculture, Betty Jean Crew, says the deal "respects our common position in regards to World Trade Organization negotiations, the preservation of the supply management system and the maintenance of a healthy global trade environment."

Signed last week at the conclusion of joint meetings of the Ontario and Quebec cabinets, the Ontario-Quebec Accord Trade and Cooperation Agreement aims to make both provinces more competitive internationally by reducing trade barriers and improving labour mobility for professionals and workers.

The two provinces committed to working on several partnerships, including the introduction of legislation that would smooth the production and sale of agricultural goods and livestock. The provinces also agreed to push for the development of a common cap-and-trade system to fight greenhouse gas emissions and for the creation of a high-speed rail link between Windsor and Quebec City.

The two provinces will invite businesses, including farm groups, from both sides of the border to comment on proposed legislation that may have an impact on the province.

The premiers see the agreement as an opportunity.

"This shows our commitment to Ontario and Quebec working together to grow the economy, attract business and investment, and create jobs," says Ontario Premier Dalton McGuinty.

Quebec Premier Jean Charest says the agreement creates a powerful economic entity -- the fourth-largest in North America after California, Texas, and New York -- that is better able to compete on the global stage.

"This historic trade agreement is going to allow us to work very closely together in building and presenting this new economy," he says.

Farm leaders in Quebec and Ontario say the provisions and language in the accord address the concerns they raised during recent talks with their respective governments.

"This is a crucial issue not just for the industry, but also for consumers, since many of the measures at issue focus on protecting them and guaranteeing them accurate, complete information on the products they buy," says Lacasse, of Quebec's producer group.

Alberta cattle producers facing severe drought-induced feed shortages this winter have choices to consider when looking for cheaper alternatives with adequate nutrient value.

One option often overlooked is using straw as a substitute for hay. Research done at the Lacombe Research Centre shows cattle can consume up to 50 per cent of their ration as straw, depending on the other ingredients used to make up the deficiencies, says Ken Ziegler, beef forage specialist with Alberta Agriculture. (Find studies at www.foragebeef.ca).

Another option is converting canola into winterfeed. Lack of moisture has meant uneven germination and reduced yield potential. With feed prices set to be higher than the long-term average, Ziegler says producers could do well by cutting their canola as forage.

Canola is nutritious and high in protein if harvested at the right time and beef cattle can do quite well on it, according to Ziegler.

The key is to harvest it at the optimal stage, which is from full flower to early pod, before plants lose the lower leaves. Ziegler says there are still areas north and east of Red Deer where the crops are very uneven and the canola could still make good feed.

Canola is similar to alfalfa, so it’s important to get the stem to dry down for storage without losing the leaves. Ziegler recommends crimping to break the stems, but not to the point where the leaves and pods break off, then baling it without raking.

Canola tends to accumulate sulphur, so feed should be tested. Excess sulphur can interfere with absorption of other trace minerals.

Ziegler warns that canola forage is normally limited to 50 per cent of total daily dry matter intake with the remaining 50 per cent made up with straw, hay and grains.

Canola forage is typically priced at about 80 per cent of hay prices, which currently hover around four to five cents per pound in the central part of the province.

Resolution may be coming to a long-standing wheat grading concern.

The Canadian Grain Commission is launching a pilot study of new technology that could help determine the milling value of sprouted wheat.

Rapid Visco Analysis technology will be placed with a number of grain industry participants. They will see if RVA can better determine whether sprouted wheat still has some use for milling, rather than discounting the wheat because of visual sprout damage.

"The Canadian Grain Commission is committed to looking at promising technologies and seeing how they could apply to the Canadian grain industry," says Elwin Hermanson, chief commissioner of the Canadian Grain Commission.

Sprout damage in wheat can be a concern for producers if harvest conditions aren't favourable. In 2004, an early frost and wet harvest conditions resulted in a large amount of the Prairie crop being downgraded because of sprouted kernels.

Producers became even more frustrated with the issue when their American counterparts, who also had sprouted wheat, weren't seeing similarly large discounts. Many U.S. elevators were using a "falling number test" to determine the wheat's value, not automatically giving it the lowest grade because it was visually sprouted.

"RVA technology could affect grain grading. We're also evaluating it as part of our commitment to provide producers with value by ensuring they get paid accurately and fairly for their grain deliveries," Hermanson says.

The RVA-StarchMaster 2 represents the latest technology to analyze sprout damage. It includes robotic dispensers that ensure accurate results for each test. These systems will be tried in grain elevators to see how well they can work in the Canadian grain system.

If the pilot study shows RVA technology works in elevators, the Canadian Grain Commission and the grain industry will consider how to further implement this new technology. If the results of the study are conclusive, changes to the grain quality assurance system may follow. At this time, visual assessment of sprout damage will continue to be the standard practice.

And along came a frost threat, as weird as that sounds with 29 C here in Winnipeg on Sept. 15.

But that’s pretty much all it took today and higher grain markets finally soared. That's following a month of near ideal growing conditions across much of North America, extracting risk premium steadily out of market prices.

Chicago soybean futures on Sept. 15 rallying 50 cents a bushel, corn near limit up at 28 cents, U.S. wheat markets gaining 14 to 16 cents. It’s been a while since we have seen a bullish day like this -- too long.

While the forecast through to the coming weekend calls for favourable conditions, some U.S. forecasters are talking about the potential for a freeze event late next week. Notably in the northernmost corn belt, especially where it has been dry in recent weeks (parts of Minnesota, northern Iowa, Wisconsin and Michigan).

Private forecasters are divided on whether the weather system will produce "cool enough" temps to end the growing season or trim yields, especially in the Upper Midwest.

But with no weather premium in the market and crops needing an extended growing season to reach lofty yield potential, at the time of writing, traders were aggressively covering short positions. Such price action shows how susceptible corn and soybean futures remain to weather.

I have to question such freeze worries in such an extended forecast. The temp maps here on the Prairies, while indeed suggesting colder days next week and some flirtation with dips towards freezing on a couple of days, don’t seem to be all that dangerous to me -- yet.

But the weather pattern does appear to be changing. As a result, traders will be looking for weather updates throughout the rest of the week, and today sparked a round of aggressive short-covering (just in case) with addition of some measure risk premium back into crop prices.

While crop condition ratings have demonstrated improvement over the past few weeks, such revised weather forecasts reminded the market that crops are running one to two weeks behind normal maturity.

Weather was the catalyst, but the bulk of the price surge early this week was actually technical.

It wasn’t until December corn futures pushed above its 40-day moving average that the surge higher in the ag markets really got going. Large speculative traders have been short, the markets and the move through the 40 days seemed to inspire short-covering.

December corn broke overhead resistance at the last reaction high and reached the highest level since Aug. 6. The Aug. 3 high at $3.76 stands as a major technical hurdle for bulls.

November soybeans penetrated resistance at last week's high and downtrending resistance levels, blowing above $9.40 a bushel resistance. 

Winnipeg canola futures managed to hold the line, not venturing below the summer lows set in late July.

November canola futures continue to maintain support at $388 a tonne, rallied $8 Tuesday to cross back above $400 and closing at $402.10.

Technicals on canola have some work left to do though before one gets technically bullish again. The 20-day moving average still resides above at $414 a tonne and previous chart support near $420 a tonne now looms as more formidable overhead resistance.

To be honest, I’m not entirely buying into this frost scare -- not yet.

Canola traded higher on the back of soybeans today, but without the big fund buying seen in the U.S., we couldn't keep pace. The strong move higher in the loonie remains a limiting factor.

As such, I suspect we should view any near-term move to the upside as a potential selling opportunity.

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.