Brazil is now testing Canadian flax for the presence of genetically modified material.

In a bulletin from the Flax Council of Canada, producers were told the Government of Brazil has ordered mandatory testing of all flax shipments entering the South American country.

"This action was taken without any formal notification by the Government of Brazil," says the Flax Council in a recent GMO flax update.

Canadian flax exports have struggled since last summer when a shipment to Europe was found to have traces of a GM variety called triffid. The crop was developed in the 1990s but was never commercially grown in Canada due to concerns over market access. Triffid did, however, end up in the hands of some seed growers before it was pulled. The investigation continues into why it is contaminating current flax shipments.

Due to the recent announcement from Brazil, the Canadian government is working to ensure "no action will be taken against the imported product if it tests positive for trace amounts of CDC Triffid."

The government is also "identifying actions that might be taken to secure the removal of these import measures."

Brazil is a small market for Canadian flax but has been growing in the past few years. 

According to Statistics Canada, 23 tonnes were shipped to Brazil in 2006-2007. In the first three months of this crop year, 1,791 tonnes was exported.

The trade action has hit growers hard. Not only has it reduced bids for the oilseed, but new testing requirements are costly. Growers have to send flax samples to laboratories for triffid testing before elevators companies will accept it. According to sources, each test costs over $100 and needs to be done for every 5,000 bushels that growers plan to deliver.

Some Quebec agriculture producers will soon be earning extra income -- and getting free top-grade soil to boot -- thanks to a new business venture that helps big grocery stores dispose of organic garbage.

"I think it's a great idea," says Gaetan Fiset, a field vegetable and flower grower near Quebec City who has partnered with the new Montreal-based company.

Beginning next month, Fiset will receive -- and be paid for -- weekly loads of grocery store waste from several nearby supermarkets. Waste includes overripe fruits and vegetables, breads passed their best before dates, even wax packing paper and meats.

He will compost the material for three months in a three sided, open air shed he recently built on his 52-acre farm with financial support from the provincial agriculture ministry. Fiset will then mix the material with the sandy soil that covers much of his property.

"It's marvellous for the soil," Fiset says of composted garbage. "And if everything goes as planned, I'll be getting a lot of it."

That's a certainty, says Michel Dufour, founder and president of the small start-up company, AZN2 Environment, which developed and is running the project.

A former employee of an industrial composting company, Dufour says he knew of the huge financial cost supermarkets face from disposing of organic waste in landfill sites. As well, he knew those rotting materials release millions of cubic metres of methane gas into the atmosphere. He was also aware that agriculture producers have the space, the means and the need to compost the same material.

"That's when I put two and two together," Dufour says. "I came up with an idea and a simple business model to use the existing agriculture infrastructure across Quebec to tackle what is really a big environmental problem."

With help from a university business professor and some seed money from a local development agency, Dufour began a pilot project near Montreal involving a half-dozen, big-banner supermarkets and a local producer in November 2008.

Under the terms of the agreements, supermarkets pay AZN2 Environment to remove waste, which in turn pays growers to compost the waste. In addition to free soil, Dufour says producers can earn as much as $30,000 a year.

The results of the pilot project were so impressive, he adds, that he has since signed up every major supermarket chain in the province. In addition to expanding the Montreal operation, he has moved to the Quebec City region.

"Once we get the process down, I'd like to get into other markets in Canada and the United States," Dufour says. "This is a winning concept."

Wholesale fertilizer producer Agrium Inc. is expanding its retail presence in Canada.

Agrium already has a major retail presence in the United States and is one of Canada's largest producers of fertilizer for domestic and international customers.

It has also been unsuccessfully attempting to buy Illinois-based fertilizer producer CF Industries but has so far been thwarted by that company's board of directors.

The Calgary-based company says it's now establishing 33 retail outlets in Alberta and Saskatchewan under the name Crop Production Services (Canada).

It has bought the remaining crop nutrient business assets that it didn't previously own from five Engro franchise dealers and an existing joint venture.

The 33 retail outlets have annual revenues of about $162 million, Agrium says. Six of the locations are in southern Saskatchewan and 27 are in Alberta.

Poor germination from a cool, dry spring combined with drought conditions during the growing season resulted in some significant production declines in Alberta field crops for 2009, according to a recent Statistics Canada report.

Total 2009 field crop production in the province was 22.57 million tonnes, down a full 25 per cent from a record year in 2008 and six per cent below the 10 year average.

Production declines were a result of lower yields and a smaller harvested area, even though total seeded area for principal field crops was nearly unchanged from 2008, says Chuanliang Su, crops statistician with Alberta Agriculture and Rural Development.

Harvested area fell about 10 per cent, mainly due to the salvage of crops for forage production and livestock grazing, he explains.

Spring wheat production was estimated at 6.18 million tonnes, down 15 per cent from 2008, mainly due to reduced yield. At 41.1 bushels per acre, the provincial average yield was down 13 per cent from the previous year.

Barley numbers declined significantly, down 29 per cent from 2008 and 21 per cent below the 10 year average. The drop resulted from a combination of reduced yield, down 13 per cent from 2008 and a decline of 19 per cent in harvested area.

Oat production suffered a dramatic decline, down 43 per cent from 2008 and 54 per cent below the 10 year average. An estimated 40 per cent reduction in harvested area contributed to the lower numbers, as more than one half of the crop was used for forage production.

Although canola production suffered a 27 per cent reduction from 2008 levels, it was still 14 per cent above the 10 year average, with harvested area down 13 per cent. Provincial average yield was down 17 per cent from 2008, but still comparable to the 10 year average.

For more details visit the ARD website at www.agric.gov.ab.ca under crop statistics.

The Canadian Wheat Board has increased its 2009-2010 export target by two million tonnes over mid-summer forecasts. It now projects the highest total exports in 10 years.

In its annual report, the CWB announces an export target of 18.7 million tonnes. The CWB says the last time total exports exceeded this amount was in 1999-2000, when exports reached 19.2 million tonnes.

Despite fears of an early killing frost, record-high September temperatures led to high quality and high yields for the 2009 crop.

"After experiencing a growing season in which crop production and quality was continually revised downward due to poor weather conditions, the CWB is pleased to be moving ahead with a strong export program notable for its high-quality grain," says Ward Weisensel, CWB's chief operating officer in the report.

In a news release, the CWB states that this year's export program consists of 13.5 million tonnes of wheat, 3.5 million tonnes of durum and 1.7 million tonnes of barley. Total barley exports include up to 1.3 million tonnes of bulk malting barley. Marketing prospects having improved somewhat since the report was created, and several export targets could move higher, the CWB states.

However, Weisensel notes that marketing this year's crop will be challenging. Durum, in particular, faces an overabundance of supply with world production now estimated by the International Grains Council at a near record 40 million tonnes.

North Africa, the major durum importing region in the world, had very good domestic crops which have significantly reduced import demand. IGC is now forecasting this year's world bulk durum trade at 6.25 million tonnes, the lowest in 11 years. Weak demand, combined with large crops in Europe and North America, has pushed prices lower.

Wheat prices have declined substantially since the peak of February 2008, amid abundant supply and fierce competition. This year's Prairie crop is forecast by the CWB to have lower-than-average protein, which will further pressure prices downward.

Malting barley prices have also been under pressure, although recent quality downgrades in the Australian crop may help buoy prices and increased imports into China are expected. Feed barley export markets are currently unattractive compared to the domestic feed market.

For 2009-2010, the CWB projects growers in Saskatchewan will receive about $186 per tonne for top-quality spring wheat, $159 for durum wheat and $145 for malting barley. The CWB will update the Pool Return Outlook on January 28.

The CWB's annual report is available at www.cwb.ca/grainmatters.

It may not be one of Canada's best known crops, but canary seed provides a stable income for many Prairie growers, especially in Saskatchewan. 

Kevin Hursh, executive director of Canaryseed Development Commission of Saskatchewan, says there are about 400,000 acres under cultivation now and there's room to expand.

"Another 100,000 acres wouldn't be a problem, especially in Saskatchewan," he says.

The seed grows in many types of soil and tends to grow well in anything but sandy arid soil. According to Hursh, canary seed is a cool climate, late harvest crop. He says quality doesn't deteriorate if harvest is delayed and doesn't require any specialty equipment. 

Hursh says Canada grows 83 per cent of the world supply of canary seed, which is used solely for bird feed. Statistics Canada reports that in 2007, Brazil, Belgium and Mexico were the largest buyers of Canadian canary seed.

At the 2010 Crop Production Week in Saskatoon, Dr. Carol Ann Patterson from Pathfinders Research and Management Ltd. gave canary seed growers a look at the history of the crop and a glimpse into its future.

She says she's found evidence that canary seed was once consumed by people in Europe and Mexico for its nutritional and medicinal benefits. But, she adds, anecdotal evidence isn't enough to get this grain seed, believed to have originated in the Canary Islands, accepted as a safe food in North America.

Before the Canaryseed Development Commission of Saskatchewan can begin marketing canary seed as a food, it has to gain Health Canada approval. That requires years of testing to ensure it meets all Canadian Food and Drugs Act criteria and regulations.

"We began in the fall of 2008," Patterson says. "By May 2009, the first round of testing was done. In 2010 there will be more testing. Then we'll submit a detailed dossier," she says, adding the dossier will take its place in a queue along with other applications.

The tiny grey or yellow canary seed resembles flax seed, but the goal of the research is to produce a product with a consistent yellow colour to replace sesame seeds.

"Sesame seeds are an oil seed with 40 to 50 per cent oil content," Patterson says and notes canary seed is a grain with less than 10 per cent oil.

She says canary seed is a healthy alternative and Hursh agrees, noting the yellow seed in particular is as esthetically pleasing as imported sesame seeds.

Both Patterson and the commission look forward to gaining Health Canada approval for canary seed. Growers will then have to decide whether to rename the seed to ensure its marketability.

Saskatchewan's largest hog operation has received court approval for a plan to pay back some of what it owes unsecured creditors.

Big Sky Farms went into creditor protection in November 2009 carrying an estimated debt of $113 million. The extended downturn in the hog markets, high feed grain costs, a strong Canadian dollar, the global recession and the association to the H1N1 flu virus all contributed to the lingering red ink of the company.

"The plan really addresses all of our unsecured creditors," explains Casey Smit, chief executive officer of Big Sky Farms.

Smit confirmed that unsecured creditor claims total around $32 million and include many producers who delivered feed grain to the hog operation just before the creditor protection was announced.

Under the plan, an unsecured creditor with a claim of less than $4,000 can receive 99 per cent of the money it's owed. Those with claims over $4,000 can get either take the $4,000 or 10 per cent of the money owed.

"The $4,000 level addresses a large amount of our suppliers and we felt that it (the compensation plan) was the best way to address that," Smit says.

Smit acknowledges that many producers with large outstanding feed bills will not be happy receiving 10 cents on the dollar.

"The alternative is if there is no payout of any nature, or if Big Sky is not able to operate in the communities it does right now, there would be nothing for anybody going forward," he says.

Rob Carlson finds the whole process frustrating. The Preeceville, Sask. producer is owed $47,000 for feed grain he delivered to Big Sky just days before the creditor protection was announced.

"It's not what we were looking for, but it is what I expected," Carlson says. He also wonders why the company isn't just offering a standard level of compensation for all unsecured creditors.

"If we're getting 10 per cent, then everyone should be getting 10 per cent."

Packages detailing the offer are being delivered to unsecured creditors and a vote on plan is scheduled for Feb. 8 in Saskatoon.

"I'm going to vote no on that deal on principle," Carlson says.

For the plan to proceed, it has to be approved by at least 50 per cent of the unsecured creditors, with the yes votes adding up to two thirds of the amount owed.

"We're confident we'll be able to make that," Smit predicts. "We believe we have the majority of the support of our suppliers."

Smit is also confident that Big Sky is nearing the point of profitability again.

"The hog markets are really starting to show good signs. In fact we're even starting to see good break-even numbers now and profitable numbers by the end of this quarter."

Canada produced record levels of maple syrup in 2009, Statistics Canada reports. At the same time, honey production levels dropped.

Last year, Canadian operators produced a record high 9.1 million gallons of maple syrup, up 4.2 million gallons, or 85.7 per cent, over 2008. The increase was largely due to favourable weather conditions. The 2009 level surpassed the previous record of 7.3 million gallons in 2000.

The total value of the 2009 maple syrup crop amounted to $353.8 million, up $141.9 million, or two-thirds, from the value reported in 2008.

Producers in Quebec, who account for over 90 per cent of Canadian maple syrup, produced 8.3 million gallons of syrup in 2009 -- 3.8 million gallons more than 2008. Prices for maple syrup were $36.92 per gallon in Quebec for 2009, $5.14 lower than the $42.06 per gallon in 2008.

Statistics Canada also released the latest figures for honey production. Canadian beekeepers produced 64.8 million pounds in 2009, slightly below the level of 64.9 million pounds in 2008. Yields fell slightly from 116 pounds of honey per colony in 2008 to 115 pounds this year.

In 2009, 6,728 people were engaged in commercial beekeeping activity, 200 fewer than in 2008. However, they had 576,000 managed hives, 5,600 more than in 2008. Last year, the total value of honey produced amounted to $105.2 million, up by $20.3 million, or 23.9 per cent from 2007.

Tuesday, Jan. 12 was a hard reality check day for the trend-setting United States grain and oilseed markets.

For many weeks, supply side fundamentals suggested no shortages on any of the major ag commodities and in some cases, such as wheat, time and time again suggested burdensome supply building.

And on this day, that reality hit markets hard and displaced that positive current of underlying (and somewhat artificial) support provided by the speculative investing community in ag commodities.

Talk around the ag trade world this week has been dominated by the United States Department of Agriculture's Tuesday release of production, supply and demand and stocks data release. The report triggered a brutal round of selling all around through the grains and oilseeds sector.

Leadership to the downside Tuesday came from the U.S. corn market, which plummeted down its 30 cents a bushel daily trading limit. Meanwhile, soybeans were also down 30 cents a bushel and wheat 30 plus cents lower.

The locked limit down price action across the board in corn futures came in reaction to USDA's much higher than expected U.S. corn production estimate.

Traders expected the USDA to trim its production estimate due to prolonged harvest delays that put more corn at risk of yield losses. But instead, the USDA raised its output projection -- a lot -- by 230 million bushels to a new all time record of 13.151 billion bushels.

The USDA did not lower harvested area, rather increased it by a token amount of 0.3 million acres. Yields were revised an astonishing 2.3 bushels per acre higher to 165.2 bushels per acre.

That's amazing, considering a record crop was produced under dire conditions this year, from a wet spring that delayed planting to a wet fall that left some corn still in the field. This result reinforces the advances of modern varietal genetics and its increasing resiliency to growing condition adversity. 

However, the large crop only translated into a modest rise to the 2009-2010 ending stocks projection.

The situation on corn usage will be called into some question. In this report, the USDA included about a 150 million bushel increase in U.S. feed consumption.

Some logic seems to be missing on how that can be, considering that Dec. 1 U.S. corn stocks were 270 million bushels above expectations. Also, the USDA left 2009-10 U.S. corn exports unchanged at 2.05 billion bushels, despite the current export pace running well behind the weekly average needed to meet that target.

So then, the boost in 2009-10 U.S. corn stocks to 1.76 billion bushels (up 89 million bushels from the December report) is not in itself statistically significant. But when considered with the perhaps overstated usage estimates and the prospect of larger U.S. corn acreage for 2010, the odds suggest a lower -- rather than higher -- price trend.

The overall setup warns of further downside price potential immediately. Tuesday's numbers provide fundamental cover for such a price decline to evolve.

Soybeans
The USDA also raised the size of the U.S. soybean crop in this report. That's not really out of line with trade expectations, but confirms that in 2009, U.S. producers took in the largest bean crop in American history.

Demand was raised, as expected, to satisfy bulging crush and exports. Carryout was reduced to 245 million bushels (down 10 million), which is statistically indifferent.

Nonetheless, Chicago soybean futures careened lower, dropping to two month lows on bearish USDA output forecasts. Speculative funds were heavy sellers across the soy complex.

Record U.S. production, larger South American crop forecasts and the threat of reduced export demand from China were bearish features sending prices spiralling lower.

Spill over weakness from a plunge in corn futures down their daily trading limits added to the defensive theme, discouraging buyers from stepping in front of the lower trend.

Demand in the global oilseed complex remains strong, and thus does not leave much room for crop threats in 2010. But no crop is being threatened at this time.

The broader, overall price trend is evolving towards sideways for 2010 until new fundamentals arise. This latest bearish data and negative charts suggest that recent highs of $10.70 a bushel in nearby soybean futures is high enough. But for now, the immediate path suggests a move towards low $9 a bushel territory.

Wheat
Not to be outdone, U.S. wheat markets were also hammered lower in the wake of limit-down losses in corn futures and wheat's own bearish USDA crop data.

USDA data had a bearish tone for wheat because the agency increased its estimates for American and world carryout, and lowered its forecast for U.S. wheat exports. Export demand has sagged because there is strong foreign competition for business and U.S. wheat prices are seen as too high.

U.S. winter wheat seedings were admittedly lower than expected, but large world supplies provide a big cushion against the decline. That lessened the bullish impact of the seedings estimate.

In the winter wheat seedings report, traders widely expect a sizable drop in American winter wheat acres. But the decline in U.S. winter acres (spring red wheat and hard red wheat) was more than expected -- down to 37.1 million acres, from the average of trade expectations at 40.9 million and last year's 43.3 million.

Despite fewer acres though, the American wheat supply remains nothing short of excessive. U.S. 2009-10 wheat ending stocks were increased by 76 million to 976 million bushels -- that's a mighty burdensome stocks-to-use ratio of 49 per cent!

On the world front, global wheat stocks were boosted to 195.6 million tonnes, up 4.7 million tonnes from last month's report. That's up a whopping 32 million tonnes from 2008-09 and continues a path for wheat statistically becoming more burdensome with each USDA report. Global stocks are nearing the glut years of 10 years ago when they were 200-205 million tonnes. 

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.