One of the biggest restaurant chains in the world is supporting the Canadian government and its effort to implement mandatory livestock traceability by 2011.

"McDonald's believes that a robust, national traceability system is critical to ensuring consumer confidence and building brand trust in the beef industry," says Jeff Kroll, senior
vice-president of McDonald's Restaurants of Canada during a recent presentation to the Manitoba Cattle Producers Association.

"While it's an additional cost, we believe that it's simply the right thing to do. Traceability is the right thing for all of us to do for our businesses and our customers, both domestically and abroad," Kroll says.

Growing consumer awareness about food production and demand for greater food safety has caused McDonald's to emphasize traceability for all menu items. In 2009, the company purchased 64 million pounds of Canadian beef, 44 million pounds of chicken and 62 million eggs. In Canada, 2.8 million people eat at McDonald's daily -- almost 10 per cent of the population.

Kroll notes that since the 2003 BSE case, McDonald's has purchased 100 per cent Canadian beef for its Canadian restaurants. They have also been part of a program to trace their beef, if concerns arose.

"For us to be able to call our supplier, which is Cargill, and say, 'that animal came from a specific farm, are you buying from that farm? Was that animal in our meat? What lot was it in?' We need to be able to answer those questions to be able to assure safety and quality to our customers," Kroll explains.

While he was firm in the need for a traceability system, Kroll also told producers McDonald's is willing to pay for that increased traceability.

"We pay a premium today for the firewalls we have on beef. That's just a fact and is something we build into our price to our owners who operate our restaurants across the country and is something ultimately the consumer is paying for today."

Quality, food safety, animal welfare are all things McDonald's has a history of paying more for, according to Kroll, and will continue to pay for.

"Ultimately it does get passed onto the consumer, although it is one element of 500 that go into the price of a product before it goes to one of our restaurants," Kroll says. "Do I think consumers will pay more for a premium product? Marketed correctly -- absolutely."

Steps are in place to start a voluntary federal livestock traceability system in Saskatchewan.

The federal and provincial governments are putting $1 million into the new program. The Canadian Cattle Identification Agency will open a Saskatoon office and hire producer support representatives.

The three field representatives will travel throughout the province and meet with producers, auction markets, industry groups and government to implement the traceability system.

"The new CCIA representatives will act as liaisons with industry and staff for the purpose of increasing awareness of CCIA programs and technologies," says Steve Primrose, CCIA chair.

"They will be available to assist with the use and selection of radio frequency identification readers and software and help with value-added programs such as age verification. In addition, they will help organize and facilitate producer meetings and ensure ongoing producer education."

The field rep in the Yorkton region is Dee Valstar, who can be reached by phone at 306-621-0508. In Swift Current, field rep Darren Steinley can be reached at 306-741-4409 and in Saskatoon, field rep Brian Anderson is at 306-717-2151.

The number of farms is declining across Ontario, but research recently released by the University of Guelph confirms the decline is more dramatic in the protected area of the province known as the greenbelt.

The greenbelt has been in place since 2003 and covers 1.8 million acres of land. Much of the privately owned land stretches 325 kilometres from Rice Lake in Northumberland County in the east to the Niagara River in the west. At its widest point, the greenbelt is about 80 kilometres wide.

Professor Harry Cummings of the university’s School of Environmental Design and Rural Development and graduate students Sarah Megens and Sandra Moreau analyzed agricultural census data from 2001 and 2006 for the greenbelt. Cummings says this is the first time this type of analysis has been done.

Provincially, the number of farms dropped by four per cent, from 59,728 in 2001 to 57,211 five years later, but in the greenbelt the decline was greater. The five-year span saw a seven per cent decline in the number of farms in the greenbelt, dropping from 6,751 in 2001 to 6,261 in 2006.

The team also found animal agriculture operations like dairy, beef and hogs continued to decline across the province since 2001, but the downward trend is more dramatic in the greenbelt.

Dairy farms in the greenbelt took the biggest hit, dropping 28 per cent from 394 to 285. Hog farms closely followed with a 27 per cent drop from 79 to 58, with beef farms dropping from 1,231 to 930.

“In every category of animal agriculture, the greenbelt is doing worse than any other part of the province,” Cummings says, which was a surprise. “In a set of data this vast, rarely would you find it that consistent."

The only category to buck the trend was “other animal,” which includes animals like ponies, rabbits, alpacas, bison, wild boar and bees. While this segment did see growth in the greenbelt -- growing from 1,018 farms in 2001 to 1,195 five years later -- Cummings says that provincially, “other animal” operations dropped to 2,145 from the 5,428 recorded in 2001.

The spread between the provincial and greenbelt statistics was even more dramatic with sheep, goat, poultry and egg farms. Provincially, there was significant growth, yet numbers declined in the greenbelt.

Provincially, sheep and goat farms had the biggest increase, growing 34 per cent from 1,017 in 2001 to 1,365 in 2006. There are fewer operations in the greenbelt, with only 159 sheep and goat farms in 2001. However, they lost 13 of those farms over the five-year period.

Poultry and egg farms also grew provincially, up five per cent from 1,614 to 1,700 in 2006. But the greenbelt bucked the trend, dropping 19 per cent, from 227 in 2001 to 184 farms five years later.

Clutching a glass of raw milk, an emotional Michael Schmidt toasted what he called a victory for the local food movement Thursday after the Ontario dairy farmer was found not guilty of 19 charges related to selling unpasteurized milk.

"People need to learn how to stand up even when it seems it's impossible to achieve change in our interpretation of the law,'' said Schmidt, who was often depicted by supporters as the small farmer fighting for consumer food rights against an established milk industry. 

In a legal battle that played out over three years, Schmidt fought to continue the operation of his 150-member raw milk co-operative in Durham, Ont., and defended himself against the charges for dispensing milk straight from the cow.

While raw milk is legal to drink, it's illegal to sell in Canada. Officials consider it a health hazard.

Under Schmidt's cow-share program each member of his co-operative owns a part of the cow. By owning the cow members were drinking milk from their own animal, he says.

On Thursday, justice of the peace Paul Kowarsky ruled that Schmidt's method of distribution made the group exempt from the legislation. He also found the operation did not violate the province's milk-marketing or public-health regulations. 

Kowarsky said the Crown could not prove that Schmidt had tried to market the milk. It was made clear on signs at the farm and at the blue bus where Schmidt set up shop at a Vaughan, Ont., market that only members could purchase products made from raw milk, he added.

The legislation was originally created to protect the vulnerable, but the cow-share members were not vulnerable and were cognizant of all concerns associated with drinking unpasteurized milk, he added.

"They consume the milk at their own risk,'' said Kowarsky, adding the product had been thoroughly tested and was shown not to be contaminated.

A Ministry of Agriculture spokesman was not able to say if the ministry would be reviewing the Milk Act.

"We're disappointed in the court's ruling,'' said Brent Ross. "The government will review the court's decision and determine next steps.''

During the verdict, Kowarsky also acknowledged the growing trend towards the local food movement, and said he found many cow-share programs existed around the world.

This was a message not lost on Schmidt, who said the verdict had opened the door to new kind of conversation.

Schmidt has not ruled out entering the political scene so he can push for the full legalization of raw milk.

The aging farm community and a slowdown of young people entering primary agriculture production have prompted the Agriculture Producers Association of Saskatchewan to figure out why.

The general farm organization commissioned a year long study analyzing the challenges and impediments of getting more youth involved in farming. The results have recently been released.

"Attracting new entrants to farming is almost at a crisis level," says Greg Marshall, APAS president. "We've seen the numbers drop off dramatically. In 1991, the number of farmers under age 35 was 20 per cent and now we've dropped off to 10 per cent."

The study was conducted by A. N. Scholz & Associates of Saskatoon. The results conclude there are seven areas that need work, including problems with intergenerational transfer of farms, training and access to capital.

"The biggest need is for the retiring generation to get the support they need in order to exit the industry," says Al Scholz, the study's author.

He says there's a lack of preparation and planning right now by farm families who either want to transfer the operation to a younger producer or sell their land and equipment to exit the business.

"A lot of exiting farmers are leaving a lot of money on the table because they're not starting the planning process early enough," Scholz says.

He says for smooth and effective sales or transfers, families should begin the process five or six years before they plan to retire.

The study found the second ranked challenge is business training and the need for improved access to education to prepare youth for running today's farm. That was closely followed by the need for more mentors to help guide young producers. Fourth was improving the image of agriculture.

"That's a challenge for farm organizations," Scholz says. "On one hand, they need to be advocates for the industry and work with governments to make sure there are good safety net programs. Doing that, there tends to be a need to highlight the areas of agriculture that are weak."

Access to capital, increased opportunities to attract immigrants and improved co-ordination of programs available to youth were also some of the top results.

The federal government has announced $7.8 million to develop a marketing strategy for the country’s canola industry.

The sector needs a strategic, proactive plan to ensure future access to global markets and help address trade issues now threatening the industry, says JoAnne Buth, president of the Canola Council of Canada.  

Buth envisions several components to the strategy, with priority going to the blackleg trade dispute with China and salmonella trade sanctions with the United States.

According to Buth, the industry needs to put together a global plan, then look at country specific issues that address various socio-economic concerns. As well, industry needs to consider legislative and regulatory regimes that are barriers to trade, including questions about plant disease, pesticides and low level, genetically modified presence policies.

The strategy will allow the council to continue to work closely with government representatives to resolve these issues and develop a rapid response plan when markets are threatened.

“We need to be able to anticipate future problems so they can be dealt with proactively,” Buth says.

There will also be a focus on industry best practices to help producers meet import standards.

Funds will be dispersed over the next four years, based on a detailed plan to be submitted later this month. The council will contribute an additional $1.2 million to the project.

Canola is currently Canada’s most valuable crop, after wheat, and adds an estimated $14 billion to the economy. Buth expects the strategy will initially target Canada’s major markets like China, Japan, the European Union, the United States and Mexico.

Predators are stalking Canada’s canola crops, according to Dr. Debbie McLaren.

The research scientist with Agriculture and Agri-Food Canada recently told Manitoba producers that she and her team are actively monitoring four diseases in Manitoba canola fields -- scleratina, blackleg, aster yellow and clubfoot.

Their sample area stretches from the Ontario border across the southern half of Manitoba to the Saskatchewan border. Although they take hundreds of samples, only a random selection is tested since each test costs $100 and funds are limited.

The research team is particularly interested in the occurrence of clubroot in Prairie fields. McLaren says clubfoot affects more than just canola.

“It’s a serious disease, not only for canola, but for mustard and other crops from the cabbage family,” she says.

That means clubroot, a fungus, could destroy crops right across the country. Most of the Atlantic provinces, southern Ontario and Manitoba’s Red River Valley have ideal moisture conditions or soil types for clubroot growth. They're also areas most likely to suffer severe crop damage and economic hardship if an outbreak of clubroot occurs, McLaren says.

The galls that grow from the soil bound spores first destroy the root and the immediate crop. As the affected root decays, more spores are deposited into the surrounding soil where they survive for years, McLaren says.

In Alberta, clubroot was more predominant in fields where crop rotation was only a one-year cycle. That’s not enough to subdue clubroot, according to McLaren. She says it can take up to four years. To reduce the occurrence of clubroot, longer rotations are required.

But management practices are working, she says. She reports in 2003, 464 fields in Alberta had clubroot, but that dropped to 49 in 2009. Saskatchewan had one field reporting clubroot in 2008 and follow-up testing in 2009 is incomplete.

Manitoba, which had one field with clubroot in 2005, has no reported incidences of clubroot.

McLaren stresses producers can control clubroot by avoiding soil transfer between fields on equipment, minimizing soil movement due to erosion, providing longer rotation periods and regularly scouting fields for diseased plants.

One of Canada’s biggest fat rendering companies has sold a majority of its United States’ operations.

Earlier this month, Quebec City-based Sanimax sold five of its two dozen facilities across North America to American rival, Darling International.

Located in Ohio and Michigan, the plants handled rendering, grease collection and trap servicing in several states.

Sanimax bought the plants over the past three years from three family-owned businesses. That consolidation, however, did not prevent their sale to the company’s U.S. competitor.

“We were the No. 4 player in that market,” says Martin Couture, the third-generation owner, president and chief executive officer of Sanimax. “We got a good offer (and) we prefer to concentrate in places where we are No. 1 or 2.”

According to Couture, his family’s business will continue to look for and consider other expansion or consolidation opportunities.

As one of the three biggest animal by-product recycling companies in Canada, Sanimax is a familiar name on farms across Quebec and some parts of Ontario, where it provides farm collection services of dead livestock.

That service, however, represents only four to five per cent of the volume the company renders into fats and tallow at several plants. Those materials are used in a wide variety of commercial products like soaps and plastic and in the emerging biofuel industry.

Proteins from those materials are also used in the production of animal feeds for both domestic and farm animals.

Most of the animal by-products the company uses -- about 50 per cent, according to Couture -- come from slaughterhouses and grocery stores. Sanimax is also an international supplier of hides and skins. The energy division is a growing part of the company’s $500 million annual sales.

“There are many new and exciting opportunities in this field,” Couture says, who would not say how much his privately-owned firm was paid for the five U.S. plants. “We’ve got our eyes wide open.”

The British Columbia Innovation Council has awarded $600,000 to four B.C. companies to help them commercialize their agri-food innovations.

The four companies won the 2009 Commercialization of Agricultural Technology Competition.

The CAT competition was launched in February 2009 with a call for proposals from innovators in the B.C. agriculture, food and ag-bioproducts sector. It is fuelled by a $3.5 million grant from the B.C. Ministry of Agriculture and Lands and designed to bridge the gap between research and industry by transforming innovations into real world solutions.

“We received 60 proposals by April,” says Richard Hallman, BCIC life sciences director.

He notes BCIC is committed to “initiatives that develop entrepreneurs and start-up companies for our rapidly growing knowledge economy.”

Twenty-two of the applicants each received $10,000 to develop a business plan for their innovation. These plans were narrowed down to eight finalists who competed for the grand prizes.

The $250,000 first place award went to Daiya Foods of Vancouver, which is developing a new technology to produce soft style non-dairy slices. The hybrid slices could substitute for dairy-based equivalents.

The second place award of $150,000 went to L.W. Truscott Farms of Creston. Noting 20 per cent of their cherry crop is currently being thrown away, the growers plan to capitalize on consumer demand for healthy, local products by building a new juice processor to convert culls into value added functional foods. They say this would reduce waste, create jobs in a depressed rural area and provide financial stability to family farms.

The competition also awarded $100,000 each to AgriForest Biotech of Kelowna and Innovative Food Systems of Princeton.

AgriForest Biotech intends to establish a sunlight-based plant micro propagation facility with optimized environmental conditions. Noting the technology can produce thousands of clones within a year at a significantly lower cost than conventional tissue culture micro-propagation, AgriForest says their plans will lead to large scale production of commercial plants for agriculture and horticulture.

Innovative Food Systems plans a complete new packaging system for the sanitation, preservation and maintenance of ripe, ready-to-eat and food safe products. The company has already patented a new box and lid and says the sanitation technology will give highly perishable fruits and vegetables an extended shelf life, which should even permit shipments to Asia by boat instead of by airplane.

Beef producers in Nova Scotia will get help paying interest on their loans.

The province has announced a $2 million short-term program, aimed at ensuring producers remain viable. Producers can use the funds to pay down loan interest from 2009 to 2011.

The province's cattle producers expressed a need to change the industry. The N.S. cattle producers say the program is a starting point to reposition the industry by investing in a profitable and sustainable plan. Producers will have the flexibility to focus on parts of the industry that strengthens partnerships, alliances and collaborations. Individuals will also have the opportunity to invest in their needs.

"Beef producers in Nova Scotia face serious short and long-term challenges," says Dave Oulton, chair of the Nova Scotia Cattle Producers. "(This) ensures that some of the hardships faced by our farms, due to extremely low market conditions, can be addressed."

To be eligible for the program, beef producers must meet specific criteria. Details are at www.nsfa-fane.ca/programs_and_projects  or available by calling 902-893-2293.

The deadline to submit the 2009 application is March 31. The deadline for the 2010 and 2011 claim forms will be March 31, 2011 and 2012, respectively.

My report last week highlighted the Jan. 12 United States Department of Agriculture production and supply/demand report. It's one of the more significant data releases of the year.

Unfortunately, the news was not good for ag market bulls as the report highlighted essentially rising U.S. and world supplies of grains and oilseeds.

In the aftermath of market trading since the report’s release, grain markets have been on a significant downward spiral. A month’s worth of speculative positions built up on the long side of the market and was suddenly rendered offside and losing money, prompting massive liquidation actions.

About two weeks ago, grain markets started to turn lower, and accelerated lower on the USDA report release, on nearby futures during this time -- 96 cents a bushel lower for soybeans, 53 cents lower on corn, Minneapolis spring wheat futures 65 cents a bushel lower and Winnipeg canola futures off $34 a tonne (Jan. 6 to Jan. 19).

It’s been a real wake-up call for the grain markets. One certainly senses a shift in market psychology from previous demand lead bullish momentum to now one of supply bear. For many weeks, supply side fundamentals suggested no shortages on any of the major ag commodities -- in some cases such as wheat, time and time again suggested burdensome supply building.

In the past week, that reality has hit markets hard, displacing that positive current of underlying (and somewhat artificial) support provided by the speculative investing community in ag commodities.

At this point (Jan. 20), the ag markets are looking oversold from a chart perspective, having declined very hard, very fast. Some type of corrective bounce can occur at any time. But that said, we have and will likely continue to be under a bearish market backdrop for the immediate days or weeks ahead.

On the oilseeds, the focus heightens on the emerging prospects for a record South American soybean crop and ideas that export demand for U.S. beans will soon shift to new crop supplies south of the equator.

The corn market also continues to reel from last week’s larger than expected USDA production estimate. However, losses may be limited by ideas that the recent sharp drop in prices will soon help spur demand. Corn futures are looking oversold and are at least due for a temporary bounce. Watch the March corn contract as it continues to sag towards key chart support at $3.64.

U.S. wheat markets are under pressure as well, as spec funds continue to bail out of recently deployed and now seriously bleeding long positions. The strong rally midweek in the U.S. dollar and large U.S. and world wheat stocks continues to weigh on.

Export demand for U.S. wheat remains very slow and shipments continue to fall below the pace to reach USDA's recently lowered export forecast. The March contract on the Chicago Board of Trade and the Kansas City Board of Trade winter wheat futures have now dipped below psychological support at $5 -- first time since October -- which could increase selling pressure.

Meanwhile on this side of the border, Winnipeg canola futures have also felt unrelenting price pressure over the past two weeks, losing a devastating $1 a bushel or so in cash market terms and also pushing into oversold territory.

Some support underlying the canola market has been the fairly aggressive export line-up at Canada’s west coast export terminals and ideas that fresh business was being conducted for canola. But weakening overseas vegetable oil prices and steady commodity fund long liquidation orders have been primary forces pushing prices lower at this time.

The drop seems overly severe during such a short period of time, suggesting technically oversold conditions. That said, the near-term price outlook does not offer market much -- if any -- comfort.

Worth noting that the Canadian dollar has tumbled hard at midweek, offering canola some support. But the overall bias will likely remain quite weak in the oilseeds for now.

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.