Emergency grower meetings held in British Columbia's Okanagan Valley last week culminated in the decision that supply management may be the only way the orchard industry can survive collapsing prices.

The meetings were triggered by receipt of the first advances from the Okanagan Tree Fruit Co-operative for last year's crop of apples and the realization that returns were even lower than the previous year.

B.C. Fruit Growers Association president Joe Sardinha says the meetings were "very emotional."

"There was clear direction from growers. We were told to tell government that orchardists need what the supply management folks have -- a regulated marketing system. It's the only way the industry will survive," he says.

Meetings have been requested with the federal and provincial governments for support in reaching both a short-term and a long-term solution to the problem.

In the short term, Sardinha says growers need an emergency payment to continue looking after their orchards in the face of a price collapse. In the long term, a supply management system is needed.

"We're receiving 1970s returns and paying 2010 costs," he summarized. "I'm not happy. I'm frustrated, anxious, disappointed and I'm angry."

Jim Elliot, a producer and president of the co-operative, says he never expected prices for apples to drop as low as they have this year.

"They're far below what is needed for sustainability," he admits. "There's not much of a profit margin in the orchard industry. If prices are down 10 per cent, our margins could be down 50 per cent. The value of my crop barely covers my bill for hired labour and I grow 1,300 bins of apples. That's not counting mine and my family's labour on the farm."

Despite the fact Okanagan orchards are among the most modern in the world, there's just no stability in markets, he points out.

Growers must continue to prune, spray, thin, water and pick, even if there's no market for fruit. Otherwise, he explains, they lose their entire investment in new trees. That upkeep costs and growers don't have the money when they don't get sufficient returns from the previous year's crop. And, Elliot notes, this is the second year of poor returns.

Low prices are blamed on the strong Canadian dollar which has impacted exports. Also, a world oversupply of apples, particularly in Washington State, has brought prices down in Canada. Last year, Washington State's apple crop was 102 million boxes, compared to 3.2 million from B.C.

Sardinha says it's an uneven playing field. American growers are subsidized by a federal export enhancement program, lower production costs and other government programs that use local fruit as the school nutrition program, a food stamps-type program and a 100 per cent local procurement policy.

Trade restrictions have been put in place on tomato imports from countries infected with the tomato leafminer pest.

Effective Feb. 24, tomatoes entering Canada from countries where tomato leafminer is known to occur are required to have a phytosanitary certificate declaring the tomatoes originated from a place not known to have the pest and that the food was inspected and found free of tomato leafminer.

The United States has also enforced new import requirements for tomatoes. Since Feb. 1, tomatoes imported to Canada from countries infested with tomato leafminer are not allowed entry into the U.S. unless they are certified to have been grown in an area free of tomato leafminer or certified to have been inspected and free of the pest. Direct imports to the U.S. are under the same restrictions.

The countries include Albania, Algeria, Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, France, Greece, Italy, Morocco, Netherlands, Paraguay, Portugal, Spain, Switzerland, Tunisia, Uruguay and Venezuela.

Tomato leafminer is a small moth that primarily attacks tomato crops. It has also been reported on potato, aubergine and common beans. In many countries, tomato leafminer is considered a key insect pest because it is capable of severely damaging tomato production. The pest cannot survive Canadian winters but it poses a high risk to greenhouse tomato cultivation.

Canadian Pork Council chairperson Jurgen Preugschas says producers need to rethink the industry's market position in order to survive.

Keeping Canada's hog industry viable will take more than just wishing and hoping, he says. The pork market simply isn't recovering from the recent slump as it has in the past, so the climb back to profitability requires hard work and a touch of ingenuity. Preugschas spoke recently in Winnipeg.

"The continued heavy reliance on undifferentiated pork sales to sustain a large Canadian pork industry is highly problematic," he says. "We have to build on the unique qualities of Canadian pork. We need to focus on areas that are higher value and get a little bit more out of our product than our competitors."

It's time to look at local markets, Preugschas says. He notes that while Canadian pork producers built exports, they didn't protect the domestic market. Now, 25 per cent of the pork Canadians consume is imported from the U.S -- 180,000 tonnes in 2009.

"We need to create a Canadian platform," he says.

The Canadian Quality Assurance program could be used to build the domestic market, along with animal care, adherence to environmental regulations and development of traceability protocols, Preugschas states. Strengthening domestic markets begins with producers and expands to sellers and marketers.

Preugschas suggests a grading system in the domestic and export markets. He explains that grading would help buyers identify characteristics likes marbling or leanness.

He recommends a voluntary grading system based on imaging technology to ensure consistency -- effective but inexpensive.

"We're not going to get huge dollars more for our differentiation, but anything we can gain out of that and get... back to producers is critical," he states.

For the first time, Canadian wheat growers will have the opportunity to seed varieties this year that are resistant to a yield-robbing, quality-damaging pest.

Two hard red spring wheat varieties have been developed through conventional practices to contain a trait that gives the crop resistance to the wheat midge bug. Aside from the midge resistance benefit, these varieties have good yield potential, which is expected to make them attractive to growers.

"It looks like it's a good variety without wheat midge pressure," explains Dale Alderson, head of Alliance Seed Corporation, which will market one of the new varieties this year, AC Goodeve VB.

"It's a short strong-strawed variety," he says. "It's early maturing, making it good for the more northern areas. The straw strength is very good which is positive for farmers who want ease of harvest. So I think even without wheat midge pressure, it's going to be desirable by producers."

Wheat midge survey maps show that as much as a million acres of crop land in parts of the Prairies could experience strong wheat midge pressure, which Alderson expects will result in seed being sold out, probably by April.

SeCan is the other company marketing a wheat midge resistance variety, AC Unity VB. That variety has also been accepted by Warburtons Foods for their identity preserved production programs. 

"AC Unity VB exceeds quality standards and offers producers an excellent agronomic package, all the while being a top yielder," says Todd Hyra, SeCan's business manager for Western Canada. "AC Unity VB is also one of the first CWRS varieties with tolerance to Orange Wheat Blossom Midge."

Warburtons will accept a limited number of AC Unity VB acres this year. Producers are encouraged to talk with the Warburtons Foods contracting station regarding availability.

There is a twist, though, for producers who plan to grow these varieties -- both are a first for the seed industry as they are varietal blends.

The seed includes 10 per cent of a variety susceptible to the wheat midge. The idea is that if the midge pest continues to have a variety it likes, it won't develop a tolerance to the midge-resistant line, ensuring the resistance trait will be around for a long time. 

"This is a single gene resistance. It's not a complex resistance. It's effective... so this blend is critical," Alderson says.

That means producers who buy these midge resistance varieties will have to sign a stewardship agreement, a commitment to use the seed for only one year after purchasing certified seed. The industry hopes this will ensure the integrity of the varietal blend.

"It's all designed not to jeopardize this single gene resistance. I think most farmers agree, especially if they are in wheat midge problem areas."

The Canadian flax industry is getting some much-needed financial support from the federal government to help deal with a genetically modified contamination problem which began last summer.

Last week, Agriculture Minister Gerry Ritz committed up to $1.9 million for the Flax Council of Canada to develop sampling and testing methods to identify genetically modified flaxseed in Canadian exports.

The program should help reassure global flax markets that Canada is in control of the quality of the flax being delivered. 

"The support... will assist the industry in responding to the challenges it is experiencing in the EU market place," says Barry Hall, president of the Flax Council of Canada.

This is part of the ongoing response to the discovery of traces of a GM flax variety, called CDC Triffid, in an export shipment to Europe last summer. The EU has zero tolerance for the presence of genetically modified organisms. The variety was developed in the late 1990s but was never commercially introduced to growers over concern about lost market access.

The impact of the trade action on the Canadian flax industry has been huge. Over 70 per cent of Canadian flax exports are destined for the EU and shipments have been restricted for several months.

The funding announcement also includes $4 million to help the Flax Council of Canada produce a new herbicide tolerant flax variety.

The research work will be through traditional breeding to ensure there is no market impact from the development of a new, herbicide tolerant variety.

"This is a very welcomed development for the flax industry," Hall says. "The support to develop herbicide tolerant flax that will be accepted in all markets will be a major accomplishment."

Canada is the largest supplier of flax in the world, producing almost 50 per cent of the world supply and 80 per cent of world exports, with a farm gate value of $346 million in 2008.

The British Columbia Blueberry Council and Raspberry Industry Development Council are working together to create new national promotion research agencies for each commodity.

If established, both would have the power to levy domestic and import berries with the goal of using the money for export development, domestic promotion, food safety programs and research and development.

Since most of Canada's raspberries and high-bush blueberries are grown in B.C.'s Fraser Valley, the two provincial commodity associations have taken the lead to create the new PRAs, a process which could take well over a year.

Consultant Karen Fenske notes it took the cattle industry, which currently have the only PRA in Canada, 10 years just to form their agency and do not yet have any levies in place.

One problem is the lack of infrastructure to collect the levies.

"The U.S. has a system in place to collect levies on imports of affected products, but the Canadian Border Services does not," Fenske says, noting it's an issue the cattle industry is working on.

Although B.C.'s blueberry and raspberry councils currently levy producers, a national PRA would expand those levies to include berries from other provinces, as well as berries imported into the country.

"The WTO says you can't levy imports if you don't also levy domestic product," Fenske explains.

The raspberry council expects the levy on their fruit to be applied only on processed berries, although council chair David Mutz says "that's open to discussion."

Blueberry council chair Mike Makara expects the blueberry levy to apply to fresh and processed high-bush blueberries.

Even if the two organizations only maintained B.C.'s current levy rates (half-cent a pound for processed raspberries and 0.8 cents a pound for blueberries), it would still nearly double the amount of money collected in both commodities.

Fenske admits the levies could add costs for growers but insists it will benefit them.

"Growers gain levies on imported product and it facilitates the long-term success of their industry."

Once the federal government has reviewed the proposed PRA's, if the plan is approved, it will first be put to growers for a vote.

"Growers make the final decision," Fenske stresses.

Alberta agriculture producers and industry now have access to a program to promote local food.

Explore Local will help capitalize on the growing demand for locally produced food. The initiative aims to pull together all the different programs currently offered by Alberta Agriculture and Rural Development and to gather the knowledge and expertise under one umbrella, says Shauna Johnston, manager of Explore Local.

"We want to work with producers, processors and retailers to strengthen, expand and collaborate and provide the opportunity for new ideas and strategies. We want to move forward with one voice for local food," Johnston says.

According to Johnston, the effort will take advantage of all the work already done by AARD in the areas of farm direct marketing, regional cuisine, farmers' markets and ag tourism. The broad goal is to foster learning opportunities and provide information, coaching and advocacy.

For example, Johnston explains that producers often encounter distribution barriers. But with the new program, co-operation may be possible by pooling resources, allowing producers to distribute product to both farmers' markets and restaurants more efficiently.

A series of information sessions around the province are planned. They target everyone from beginners to those looking for more detailed knowledge about topics such as marketing channels.

The initiative is currently working closely with producers and industry associations including the Alberta Farm Fresh Producers Association, Alberta Farmers' Market Association and Going Organic Network of Alberta.

Recent surveys indicate demand for local food products continues to outstrip the supply with consumers spending 84 per cent of their total farmers' market dollars on food. In Alberta, farmers' market direct sales have increased 30 per cent in just a few years while sales across Canada now exceed $1 billion. 

More information about Explore Local is at www.explorelocal.ca.

It's a shortened trading week given Monday's holiday in most Canada and the United States. So it was already an abbreviated trading week at the time of writing on Feb. 17.

North American grain markets leapt higher Tuesday with the help from bullish outside markets. A weak U.S. dollar spurred sharp gains in the crude oil and gold markets. Stock markets also traded higher.

At least to start this week, there was buying interest across most equity and commodity sectors. Interest was triggered by a combination of short position holders becoming uncomfortable and wishing to buy back positions and the investor community a little more comfortable with assuming risk in the markets.

Additional support in the grain markets was linked to slowly improving technical considerations which are signalling the "potential" for winter lows being posted.

However, there is much more chart work to be done before bulls regain control of the markets. Traders are also noting the seasonality of the market, which points to a low typically being posted in mid-February.

Despite all the bearish fundamentals still weighing on the wheat market (no end to that yet), perhaps all the bearish news is now accounted for in the markets. Now that doesn't mean a sustained turn higher for wheat. But maybe, just maybe, with all the shorts in, we may see some short-covering bounces until new fundamentals arise to suggest the next trend direction. Meanwhile, we continue along the process of carving out a sideways trading range for wheat.

Today though, let's talk a little about canola, which I think has also stopped going lower, putting in perhaps an important bottom. It's all still part of a longer term process of coming out of a one to two year net downtrend and transitioning into a sideways market. There is all kinds of gyration potential within a trading range.

Good news on canola are reports of renewed Chinese buying interest. I have some more details.

Apparently China bought 100,000 tonnes of Canadian canola last week for June-July shipment.

Notable for a couple of reasons:
- This is one of the first real signs that canola business to China may be getting back on track since the imposition of blackleg import restrictions on Nov. 15.

-The importer is taking a bit of calculated risk that either the Chinese government will loosen blackleg tolerance and restrictions by that time and Canadian supplies can and will meet those current tolerances.

- This sale was done at a China-landed price about $40 to $50 a tonne cheaper than Chinese domestic equivalent.

- Backlogged Canadian canola sold previous to China's Nov. 15 restrictions is starting to move; reportedly one boat already left and three more are coming to be loaded. It would appear import certificates are starting to be issued.

Politics remains heavily involved in the China trade situation on canola, but we have seen the most promising signs of movement of the past three months, with trade whispers that tolerances will become more relaxed by this spring. But that's just talk for right now.

Regardless, news of product moving to China both in pre-sold nearby positions and new business into summer deferred positions is a positive sign. This news should put canola market bears on notice given the still substantial price premium in China. Doesn't yet suggest a new sense of bullish sentiment for the canola market, but it certainly does help lift the bearish veil which had been hanging over the market for the past month.

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.