FCC Farmland Values Report. Provincial and national land value trends, updated every six months.

Note from the editor

Allison Finnamore

You can contact us with story ideas or comments at allison@finnamore.ca.


1. Canola acreage drops

There is going to be a significant reduction in Saskatchewan's canola production this year, but just how much is anyone's guess at this point.

"It is a difficult process yet to make any accurate estimates," says Ken Ball, a commodity broker with Union Securities in Winnipeg. "The best that I can come up with is that we've probably washed out at least four million tonnes of production potential in canola. That is very significant from a crop that might have been 13.5 or 14 million tonnes under good conditions."

Growing conditions are not very good in many parts of the province, with the exception of the northwest. Heavy downpours over much of southern Saskatchewan on June 18 expanded the amount of land with saturated soil. Growers are concerned that their canola will not survive under water in low-lying areas.

Jim Bessel, a senior agronomy specialist with the Canola Council of Canada, says the plant requires oxygen to survive.

"I've seen in the past where we have canola under water for a few days and basically it is so stressed, it turns very much a purplish type colour. You will get it to dry out a bit, then all of a sudden it will bolt and throw out a few flowers," he says. "It ends up very spindly and raggedy looking and doesn't amount to much from a production prospective."

Canola is also facing plenty of weed competition.

Spraying was on the schedule for many growers this week. Wayne Bacon was spraying his canola crop near Kinistino on Monday morning. The field was very wet, following more than 300 millimetres of rain this spring and the crop was under stress. Bacon was leaving some deep tracks, but there wasn't any choice.

"I think the biggest thing you have to consider is which is going to hurt the most-- spraying or letting the weeds grow. If you don't get it sprayed, and the crop gets choked out, you end up with a bunch of weeds."

High clearance sprayers were used in fields that could support the equipment's weight. Other growers opted for aerial spraying.

A couple of canola pests have managed to adapt to the wet conditions. Bessel says cutworms are showing up in a number of areas. He also expects flea beetles will become more visible as the temperature rises.

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2. Manitoba producers continue to deal with excess moisture

Rain continues to plague producers' attempts to plant their crops throughout Manitoba. Although rainfall amounts haven't been exceptional, drying has been slowed.

Keystone Agriculture Producers' President Ian Wishart reports there is some field activity in high, well-drained areas. Producers are still doing whatever they can in the fields, he says.

Some crops have seeding deadlines prior to June 15, Wishart says, but others like buckwheat and flax, have deadlines as late as June 20.

Craig Thomson, vice-president of insurance operations with Manitoba Agricultural Services Corporation in Portage la Prairie, indicates there's no plan to extend the published seeding deadlines. That's not likely to change despite hopes producers may have that there will be time to reseed. 

Thomson says MASC crop insurance seeding deadlines for full coverage and extensions for late seeding (80 per cent coverage) were preset several years ago based on the agronomic requirements of the various crops. Since most grains and legumes planted after June 20 are at high risk for fall frost damage, that's the last date for seeding insured crops.

Preset seeding deadlines have some advantages. Wishart notes they provide structure to producers' seeding plans. Preset dates also eliminate the need for the MASC board to revisit the topic of seeding deadlines annually, trying to second guess the weather.

There are some variations. Deadlines can vary by crop, some by risk area.

"For instance, field peas have a preset seeding deadline of June 15 for full coverage and an extension date of June 20 for 80 per cent coverage," Thomson explains.

The early seeding deadline for soybeans in the drought-prone southwest corner of Manitoba is May 30 and the late seeding deadline is June 4. In the region near Winkler, the corresponding deadlines for soybeans are June 6 and June 11.

All Manitoba growers pay a 30 cent per acre excess moisture insurance premium and the option of buying additional coverage of $15 per acre to bring coverage to a maximum of $65 per acre. Premiums for the additional coverage vary depending on the producer's claim history.

Wishart suggests it may be time to reevaluate excessive moisture insurance coverage amounts, set in 2001-2002, to ensure producers are adequately covered in the future.

About 15 per cent of Manitoba cropland remains unseeded.

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3. Trade restrictions lifted in B.C.

The United States Department of Agriculture has lifted its restriction on British Columbia cattle.

Three suspected cases of brucellosis were found among cattle from two B.C. farms but proved to be false alarms. Earlier this month, the Canadian Food Inspection Agency removed quarantines from the two farms after a thorough investigation did not confirm the disease. Animals on both farms were tested for brucellosis, all with negative results.

Brucellosis is a contagious disease which can infect cattle, swine, bison, elk, deer, goats, sheep, horses and other ruminants. Wildlife experts believe the disease is endemic in the bison herd at Wood Buffalo National Park, located in northern Alberta, although no cases have been found in nearby cattle. Canada's last case of brucellosis in cattle occurred in 1989.

The CFIA imposed the quarantines and launched the investigation on May 26 after three beef cows from the two farms were classified as "reactors" during routine USDA slaughter testing.

Immediately after their initial findings, the USDA placed temporary import restrictions on sexually intact cattle and bison which have been in B.C. since March 25. Before they could be exported, cattle had to be tested and certified by the CFIA as negative for brucellosis. The restriction did not apply to cattle and bison exported to the U.S. for immediate slaughter.

The CFIA's own analysis of the original USDA samples at its brucellosis reference laboratory in Ottawa found the original suspicious reactions were caused by the Yersinia bacterium known to create false-positive test results.

Had brucellosis been found in either of the two herds, they would have been ordered destroyed, says Dr. Keith Lehman, CFIA animal health program specialist.

Just days after the CFIA informed the USDA of its lab analyses and investigation, the Americans lifted their trade restrictions.

Many B.C. ranchers consider the brucellosis brouhaha another example of regulator ineptitude, as it follows this past winter's anaplasmosis "debacle." In that case, nine herds in the Nicola Valley were placed under quarantine and 14,000 animals tested before the CFIA finally ruled out the disease in March. That case also resulted from false positives, that time attributed to an "anaplasmosis-like" organism.

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4. Producers seek railway costing review

Several Canadian agriculture groups are seeking a review of railway costing.

The Canadian Federation of Agriculture, Manitoba's Keystone Agricultural Producers, Agricultural Producers Association of Saskatchewan, Alberta's Wild Rose Agricultural Producers, the Canadian Wheat Board and the National Farmers Union are calling for the review. The request comes after two reports by John Edsforth, a rail analyst.

In a study released earlier this year, Edsforth says rail companies exceeded the federally-regulated revenue cap by a startling $123 million for the crop year 2007-08. This figure jumps to $275 million for the following crop year, 2008-09.

The study found that in 2008-09, farmers paid $8.81 per tonne, or $275 million overall. The previous year, they paid $4.61 per tonne, or $123 million. High volumes, rail efficiencies and low fuel prices combined to create the increased amount in 2008-09, the study found. It also updates a 2008 Travacon report that said farmers paid over $100 million more than their fair share in 2006-07.

"Farmers were supposed to share in efficiencies in the grain handling and transportation system from elevator and track closings, but so far we have not," says Greg Marshall, president of the Agricultural Producers Association of Saskatchewan. "We need a full costing review to determine fair costs for freight."

The Canadian Wheat Board says railway costs for grain movement have not been reviewed since 1992. Since then, transportation has seen two major efficiencies: the number of elevators has plummeted from 1,500 to about 240, and the railways have moved to multi-car blocks of at least 50 cars at a time.

Results of the study are at http://www.cwb.ca/public/en/hot/railissues/costingreview/pdf/study.pdf.

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5. Quebec maple syrup production dips

After a promising start, the 2010 maple syrup season was an average one, say officials with the Quebec producers' federation.

"The only remarkable thing about this year was the fact that the sap started to run so early across the province," says Serge Beaulieu, president of the Fédération des producteurs acéricoles du Québec.  

According to figures released by the FPAQ on June 16, 88.1 million pounds of syrup – or 30.24 million litres - were produced in Quebec this spring.

That was roughly 20 per cent less than last year's record-setting harvest of 109.4 million pounds of the sticky, sweet liquid.

The 2010 results, however, were the second-highest in the past decade and by far higher than the 58.8 million pounds harvested in 2008, the 58.8 million pounds in 2007 and the 61.7 million pounds in 2007.

According to Beaulieu, the federation's 7,300 members install 43 million taps on maple trees across the province. Most years, each tap provides enough sap to produce an average of 2.2 pounds of maple syrup.

Last year, despite high levels of snow that had producers fearing a fourth consecutive poor harvest, the average tap-sap-syrup production rate reached a record average of 2.65 pounds. 

This year, Beaulieu notes, that average fell to 2.04 pounds -- the lowest in 15 years.

Though happy with the end result, he says producers are disappointed that they were unable to take advantage of optimal conditions this year.

An unusually mild winter and a small amount of snow enabled syrup producers across Eastern Canada to prepare like never before for a harvest season that began in mid-February in some regions -- weeks earlier than usual.

"I don't remember the last time I saw a winter like this one," says Beaulieu, a dairy producer who also taps 28,000 trees on his lands in the southwest corner of the province.

He says the record-setting heat wave across Canada during the Easter weekend put a brusque end to the flow of sap, cutting the season short by a week or two.

He adds it is still too early to know how much Quebec syrup producers will earn for this year's harvest, which accounts for more than 90 per cent of the Canadian total and about 80 per cent of world production.

Similarly, he notes last year's record harvest has resulted in a 12-million-pound surplus and led to a slight drop in retail prices for maple syrup.

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6. New directory promotes organics

Consumers and wholesalers now have access to a new online organic producers' directory to help find locally grown organic products.

Organic Alberta and the Saskatchewan Organic Directorate launched the directory as part of a collaborative effort to meet the growing consumer demand for information on how to find producers, says Steven Snider, president of Organic Alberta.

With over 1,400 producers in the two provinces, there was no central site where buyers and consumers could find each other either by type of product or location.

The directory helps solve this problem by allowing consumers and wholesalers to search by province, region, town, producer and type of product. Users can select from a number of categories including grains, forages, oilseeds and pulses, meat and fruits, vegetables and herbs.

Snider says an effort has been made to maintain the integrity of the site by ensuring only certified organic producers are listed. He notes some producers are still in the transition period to full certification, which can take several years.

The directory isn't just limited to local consumers looking to make farmgate purchases. Farmers may be looking for a source of certified organic seed or local restaurants and grocery wholesalers could be searching for local products to showcase.

Snider points out that the directory has the potential for tapping into international markets as well.

"Buyers in Canada and from around the world can use the directory as an access point to find a broad spectrum of producers to help them fill larger orders."

Both provinces have seen rapid growth in the organic market in the past five years as part of the overall increase in organic product sales experienced across Canada, where sales now exceed $2 billion.

To access the directory go to www.organicfarmdirectory.ca.

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7. New life for organic agriculture program

A university organic agriculture program that was on the chopping block last year has been spared.

The University of Guelph is giving its organic agriculture major another four years of life. Last year, the organic major was one of a dozen programs the university had identified as being under-subscribed by students. At the time, the program had less than a half-dozen students.

But the threat of extinction, and the ensuing publicity the program gained because of its dire situation, mobilized forces within the organic sector. Enrolment climbed to close to 20 students, the number generally considered a cut-off for an academic major.

The decision to keep the program alive comes despite an increasingly tough economic environment at the University of Guelph.

However, the university's Ontario Agricultural College has made some significant strides lately that are consistent with its move towards non-traditional programs and areas of emphasis. For example, in April it announced a $3 million gift from Loblaw's for a research position (called a chair) in sustainable agriculture, designed to be what the university called "the centre of U of G's research focus on creating robust food production systems."

As well, at the college's Ridgetown campus, a $3.4-million "green" anaerobic biodigester that uses swine manure to create electricity is scheduled for completion next March.

When the University first faced the prospect of cutting the organic program, agricultural college dean Rob Gordon put the cuts in context.

"The University of Guelph and the Ontario Agricultural College in particular have dealt with numerous challenges over the years," he states in a written report. "In many ways however, none of them have been greater than the financial dilemma we're presently facing... many educational institutions are facing similar predicaments."

Earlier this week, speaking to the organic program's continuation, he said he realizes new and upcoming programs such as the organic major take time to evolve.

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8. Bees busy in N.B.

In a perfect world, Russ Weir would put two to three beehives on each acre of his blueberry farm during the pollination period.

However, this year the owner of McKay's Blueberries in Pennfield, N.B., located in the southwest part of the province, managed to average just over one per acre -- the minimum number recommended for optimum pollination.

"I'd like to put as many as I can get out there, but (getting them) has been the problem," says Weir, who has rented bees from N.B., Quebec and Ontario ever since his own hives had to be destroyed in the 1990s due to mites. "I ordered 400 from Quebec but only got 70. My keeper had a bad winter."

He eventually managed to get 700 hives on his fields. To the Quebec hives, he added 100 from Ontario and the rest from New Brunswick.

Problems like diseases are bad news for growers of crops like blueberries and cranberries. They're dependent on some form of insect to move pollen from one flower to another.

"With no pollination, you would get less than two per cent fruit set from the wind," says Bruce Melanson, crop specialist for blueberries with the New Brunswick Department of Agriculture and Aquaculture. "If you don't have insects, you don't have pollination.

"In New Brunswick, most crops are pollinated by managed bees and native bee populations," Melanson explains.

As in other parts of North America, the N.B. honeybee population has taken some hard hits in recent years. It has fluctuated from between 3,500 colonies in 2007 to the current state of between 6,500 and 7,000.

"We're looking at growth for this coming summer and hoping to get up to 10,000," Melanson says.

That would be good not only for growers, but also for beekeepers.

"When fewer bees are available to blueberry growers for pollination, beekeepers have nothing to rent and they don't have any honey at the end of the year," Melanson says.

The threats to the bee population is one reason Bleuets N.B. Blueberries, the industry organization representing New Brunswick blueberry producers, partnered with the New Brunswick Department of Agriculture and the Conservation Council of New Brunswick to hold a pollination research forum in Moncton this spring.

The forum brought together Maritime agricultural producers -- including beekeepers, apple, blueberry and cranberry growers –- and researchers from across the country involved in the Canadian pollination initiative, a five-year strategic research network addressing the growing problem of pollinator decline in agricultural and natural ecosystems in Canada.

Research priorities were developed and management issues examined, Melanson says.

"What is the ideal diet for honeybees and what is lacking in blueberry fields? Is there a way to have honeybees and blueberries work better together?" Melanson says. "We asked the researchers to look into this."

McKay's Blueberries is certainly on board with the project.

"We have provided 15 fields for them to study in the St. Stephen area," says Weir, who is particularly interested in how the health of the blueberry pollen affects the health of bees and blueberry propagation.

Only time will tell what the state of the honeybee will be, but Weir is optimistic the ones he had did a good job on his fields this year.

"The fruit set looks pretty good," he says. "It's normal or a little better."

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Sunny, light winds and long-term savings.

9. Market Focus - Canola market update

At the time of writing Wednesday morning, Statistics Canada had just came out with its second Canadian seeded acreage report of the season based on survey results taken from 25,200 producers during the period of May 25 to June 3.

Obviously since the time the survey was taken, significant changes to overall seeding results were noted across a large portion of Western Canada which is not being fully accounted for in this report. This report reflects what could have been if all crops were planted as intended. Obviously, this did not happen this year.

It's a very unusual situation, in fact unprecedented, with the amount of acres that have been lost on the Prairies this year. Again, something not accounted for in this report. So as a rough initial estimate, I took the StatCan numbers and assume for now that only 80 per cent of these crops were seeded.

On canola, StatCan reported that during their survey period almost a month ago, that a record 17.7 million canola acres were intended to be planted. We all know though that there is no way that has occurred.

What the number really is today, no one knows, it's all a matter of speculation. But, we can take the 80 per cent rule of what was actually seeded relative to intentions, which calculates out to 14.16 million. At 75 per cent of intended acres planted, that's 13.27 million.

And along with acres planted this year, the question of yield potential will be questioned through the growing season. There is an awful pile of acres that are in water-logged soils and clearly losing yield potential right now.

Markets have responded in the past two weeks with canola and oat futures, and even flax and canary seed cash bids making some strong advances.

In the cash market, canola prices have advanced to as much as $9.50 a bushel in southern Alberta, closer to $9 to $9.25 a bushel at many points in Saskatchewan and Manitoba. Nearby July and November canola futures are once again testing important overhead chart resistance, notably for the November contract at the $427 to $432 a tonne area.

Bullish momentum in the canola market seems to wane as November futures attempt to retest this resistance zone -- still the key stop for any further run. The current chart pattern could be suggesting a bull flag as the canola market consolidates recent gains, but this week's performance so far seems suspiciously lacking.

Looking at the weekly price chart for canola from another technical perspective, it offers some longer-term perspective. The descending triangle that prices had been confined to has seen an upside breakout, suggesting a further price advance potential to near $440 and $450 a tonne.

But as we are focusing on canola, we must maintain a wary eye on Chicago Board of Trade soybean chart developments for clues of broader oilseed market trends. Prairie growers have turned very strongly bullish on canola based on conditions in our backyard. But be very much aware that while problems here certainly justify a rally in futures and improved cash basis, widening price spreads between canola and other competing oilseeds/vegetable oils are doing a lot of the work of immediately rationing off demand.

And without subsequent gains in the more dominant soy complex, it will become increasingly difficult for our canola market to continually build independent gains.

The dominant pattern on soybean price charts remains a tightening triangle pattern. The primary upward trendline on the weekly bean chart from the 2006 lows lies just under current prices near US $9.50 a bushel. We should be on the lookout for a downside penetration of that level on a closing basis. If that occurs, then the next area of support coming into play will be the $9 area. Conversely, the $10 mark is key to the upside.

For the present time though, it would appear canola futures and cash prices still have some upside potential to realize, especially if immediate chart resistance can be cleared. However, that has not been accomplished at this time of writing, but we are close.

The market gains have been good news for growers with something to sell from 2010 production, but discouraging for sure for others who were not able to get crop in the ground or otherwise operate under stressed yield/quality conditions.

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.

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