Do you Love Agriculture? Generation Ag is here

Note from the editor

Guest editor Trudy Kelly Forsythe

Editor Allison Finnamore is on vacation so I bring you this week’s agriculture stories. They include highlights from FCC’s annual report, news on interprovincial meat trade discussions, processing plant layoffs and more. Please note Mike Jubinville is also away this week; Market Focus will return next week.

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


1. Farm Credit Canada supports Canadian producers

Farm Credit Canada released its annual report earlier this month.

Among its highlights, the report noted that FCC reinvested its net income of $281.9 million in agriculture and approved $6.6 billion in disbursements to producers, processors and suppliers along the agriculture value chain. This lending helped to grow FCC’s portfolio to $19.7 billion.

“Lending to farmers and those who supply their needs and process their crops into food and other products is our only business,” says FCC president and CEO Greg Stewart. “We believe in helping producers and agribusiness operators to build their businesses in good times and weather the challenging times.”

Recognizing that young people are key to the future of the industry, FCC approved loans of over $1.8 billion to farmers under the age of 40.

“In fiscal 2009-10, producers and agribusiness operators moved through fallout from the global economic situation,” explains incoming chief operating officer Rémi Lemoine. “There was volatility, but the initial impact on agriculture was less dramatic than predicted. We continued to see credit availability across financial institutions, which is a good thing. FCC continued to lend to all sectors, including those experiencing major challenges.”

“While farm debt levels have continued to increase, partly because of low interest rates, customers continue to make their payments and arrears levels have remained low,” says chief financial officer Moyez Somani. “At the end of March 2010, 97.7 per cent of our loans were in good standing, slightly better than 97.5 per cent last year.”

Other highlights for the fiscal year ending March 31, 2010, included the introduction of a new energy loan to help producers move toward producing renewable energy; honouring five women from across Canada who are active leaders in agriculture with the FCC Rosemary Davis Award; raising awareness about hunger and collecting over 1.6 million pounds of food across Canada by working with community partners and customers in the FCC Drive Away Hunger campaign; and being listed ninth in the Hewitt/Globe & Mail’s Report on Business magazine 50 Best Employers in Canada list.

The organization also reinvested $7.9 million dollars in agriculture programs across the country. Those programs allowed over 10,000 people to attend 162 FCC learning events; put $1 million in grants toward 115 rural capital projects in communities across Canada; awarded $50,000 through the FCC Expression Fund to support the use of Canada’s official languages in Canadian communities; partnered with Agriculture in the Classroom to provide $100,000 for new and updated materials to teach children where their food comes from; and partnered with and provided $100,000 to the Canadian Agriculture Safety Association to create a new national agriculture safety training fund.

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2. Interprovincial meat trade discussed

A pledge from the recent meeting of the federal, provincial and territorial ministers of agriculture is positive news for Canadian beef producers.

The ministers promised to create pilot projects aimed at expanding interprovincial trade in meat. They stated the intent is to increase "processors' ability to move product across the country in keeping with Canada's high domestic standard."

The announcement was welcomed by the Canadian Cattlemen's Association as an important first step in maintaining the competitiveness of the beef business in Canada.

Prior to the July meeting, the CCA presented this issue for consideration by the ministers. The concern is that provincially inspected plants are currently restricted by federal meat inspection legislation to sell within their own province.

But these restrictions limit opportunities for growth and expansion outside their borders, says CCA president Travis Toews.

Toews believes the initiative, combined with a recent funding announcement to help beef packers offset the costs of removing and disposing of specified risk materials, should help ensure meat processors continue to choose to process cattle in Canada.

The idea of expanding interprovincial trade has been discussed for years. But the issue has been given added urgency since last year's move by the United States Department of Agriculture to allow interstate trade of state-inspected beef.

According to Christine Russell, communications specialist with the Canadian Food Inspection Agency, the pilot projects will assess the challenges currently preventing small and medium-sized meat establishments in Canada from meeting the federal requirements in order to participate in interprovincial trade.

Russell describes the ultimate goal of the pilots as the development of tools to help these plants meet these requirements.

The aim is to improve the consistency and effectiveness of overall meat inspection across the country through the increased alignment of federal and provincial inspection procedures.

Federal, provincial and territorial officials are currently working on the timing and locations of the pilots, Russell says.

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3. Olymel ruffles poultry operations

Canadian poultry and pork giant Olymel has slashed the workforce at one of its biggest Quebec processing operations by more than half.

Of 308 employees at the Olymel plant in Iberville, half-hour drive south of Montreal, 183 were permanently laid off on July 16.

The move was the first step in a major shakeup of its poultry processing and packaging operations that Olymel announced in April.

Many of the operations at the Iberville plant -- notably the production of skewers, tournedos steaks, fresh tray-pack products and deboned chicken thighs -- will be transferred to the company’s facility in Brampton, Ont.,
which has unused production capacity due to lower local demand for Olymel’s products in the Toronto market.

Fresh pre-packaged product operations at the Iberville plant -- notably chicken deboning -- are also being moved to two nearby facilities in Quebec.

That shift will result in both the creation of 25 jobs at the Olymel plant in St. Rosalie and the preservation of jobs at the company’s poultry slaughtering and cutting plant in Berthierville. The Berthierville plant supplies raw materials to the Iberville plant.

Réjean Nadeau, the company’s president and chief executive officer, called the job losses at the Iberville plant unfortunate but necessary.

Nadeau added that Olymel is trying to reassign as many laid-off workers as it can within the many poultry and pork slaughtering and processing facilities it operates across the province.

It was unclear if or how the changes will affect Quebec’s 748 poultry farmers, who produce some 360 million kilograms annually.

Calls this week to the Fédération des producteurs de volailles du Québec, which has represented poultry producers in the province since 1969, went unanswered.

Some laid-off Olymel workers, however, were both angry and confused by the job cuts.

“We feel powerless and humiliated,” one told a Montreal newspaper. “What's more, we don't understand. Last year at this time, the company was hiring lots of people (and) they renovated and invested in new machinery. Today the plant is practically closed.”

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4. Manitoba crops rebound

There was a brief respite from heavy rains across Manitoba in mid-July and some crops began to show signs of recovery.

According to the latest crop report from Manitoba Agriculture, Food and Rural Initiatives, early seeded crops are rebounding. However, results vary between regions and even between fields.

MAFRI reports that overall, the warmer weather in mid-July resulted in some drying. This provided an opportunity for producers to finish fungicide spraying and begin to cut hay.

All areas of the province report good hay yields but below-average quality. Age is cited as the primary cause of the lower quality. Hay crops in low-lying fields, which remain inaccessible due to persisting excess moisture, continue to lose quality.

The MAFRI report indicates that canola, sunflowers, corn, flax and cereal crops are catching up and soybeans are rallying after a very wet start. The best news appears to be in the winter wheat crops, the report says.

But the reports delivered by district representatives at the recent KAP General Council meeting in Brandon tell a different story, especially with canola.

Nine of the 12 KAP district representatives report problems with canola crops. They indicate there are large tracts of unseeded acres due to excess moisture, drowning of early seeded and late seeded canola, poor plant numbers in surviving stands, and now, flowers are coming off surviving plants too soon.

District representatives say inconsistencies in reports are due to variations in field elevation, the duration of the excess moisture conditions and the amount of rain produced in localized thunderstorms and recurring showers.

Chuck Fossay’s report for District 6, which lies just west of Winnipeg and takes in the area around the southern tip of Lake Manitoba, provides an example of the variability in crop conditions across the province.

Fossay says most of the canola was drowned out in his district. The area around Portage la Prairie is good, he adds, but the west side of Lake Manitoba is so-so. He reports that north of Portage towards Gladstone, the crops are struggling. And, according to Fossay, only 50 to 60 per cent of crops on the east side of the lake are viable -- predominantly cereals and soybeans.

The KAP district representatives’ crop summaries supported MAFRI reports that soybeans, corn and wheat crops continue to improve, but that fusarium is an ongoing challenge in cereal crops.

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5. Early weaned pigs provide strong market for NS producers

Three-week-old pigs weighing in at 12 to 14 pounds are helping some hog producers in Nova Scotia stay in business. That’s certainly the case for Terry Beck, who started out in the hog industry 31 years ago selling 30-pound weaner pigs before moving into market hogs.

In 2007, as the hog industry was collapsing, Beck took another look at early weaned pigs. He and a few other producers first attempted to sell ISO weaned pigs to an American market, but the timing wasn’t right. “Their market crashed,” Beck says. “It was bad timing.”

So Beck looked for other markets last year and found one selling early weaned pigs into Ontario. While it has had its ups and downs, Beck says the market is moving along nicely. Part of the reason is Nova Scotia offers a high health product.

“We don’t have the diseases and challenges producers may have in Ontario where they are highly congested,” says Beck. “They’ve been happy with our product.”

Of the 10 remaining hog producers in Nova Scotia, four have transitioned to the early weaned pig market. And while most of the opportunity is in Ontario, one Nova Scotia producer is also moving product into Quebec.

“We’re producing more than half the pigs in the industry in the province right now,” Beck says. “We’re producing over 100,000 ISO weaned pigs a year.”

Henry Visser, executive director of the Nova Scotia Federation of Agriculture, puts the farm gate value of the early weaned pigs industry between $3.5 and $4 million for 2010, based on current market value. He adds that the total farm gate value of the provincial hog industry for 2010 is in the range of $4.5 to $5 million.

Beck explains that the producers who have made the shift are typically sow producers who are better able to look after smaller pigs, not finisher operators. He admits even then, the transition to produce early weaned pigs brought with it a big learning curve.

“I’ve been in business 31 years and it meant a change in what we’ve been doing,” he says. “I went from 250 sows to 700 at time when most thought to expand we were crazy.”

But so far the gamble is paying off. “It’s a strong market,” Beck says. “We’re having no trouble getting rid of the piglets right now.”

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6. Ornamental industry receives funds

British Columbia's ornamental nursery industry has received assistance aimed at developing opportunities and increasing competitiveness.

The B.C. Landscape and Nursery Association received $273,000 -- $165,391 to help nursery growers implement Clean Plants Domestic Phytosanitary Certification program requirements to help prevent the spread of plant disease and $108,172 to help evaluate green roof methods and technologies that support rooftop vegetation growth, improve air and water quality and reduce energy costs.

Research collaboration between the B.C. Institute of Technology and Kwantlen Polytechnic University will also help the sector gain access to this quickly expanding market, Agriculture and Agri-Food Canada stated in a news release.

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7. Pre-emptive goose cull implemented

Nova Scotia's resident Canada goose population is growing fast -- and that has biologists at the Canadian Wildlife Service worried about their impact on farmers' crops.

To prevent any potential problems, the CWS has authorized an extended Canada goose hunt in Nova Scotia this year. The hunt will begin six to 11 days early (depending on the region), with each hunter allowed to take up to 16 birds.

There are two different Canada goose populations in the province, says Dr. Martin Raillard, of the Canadian Wildlife Service -- the organization's manager of population conservation for the Atlantic region. One group of geese migrates, while the other is made up of resident birds that spend the whole year in the province.

They are the ones he's worried about.

"Ten years ago there was just a handful of resident geese," Raillard says. "Last year, we estimated the population at 6,600 -- so it really is growing exponentially."

Richard Melvin, president of the Nova Scotia Federation of Agriculture, says he has heard some reports of Canada geese damaging crops, but they are isolated.

"We've had reports from some parts of the province -- particularly the Truro area -- that the geese will land, pull out alfalfa and corn seeds and do quite a bit of damage. Having said that, at this point we haven't had overwhelming problems with the geese in terms of agriculture-related issues."

Melvin says a representative of the Canadian Wildlife Service made a presentation to farmers last fall, hoping to gain their co-operation in allowing hunters onto their land in order to control the goose population.

"We've agreed to co-operate and allow hunters on our property during that period with permission. People are working in fields and so on, and we want to make sure they are not put at risk," Melvin says.

In addition to protecting agriculture, Raillard says nuisance geese can be aggressive towards the general public and can be a threat to aviation. He says Canadian Wildlife Service biologists are in the process of developing population targets for the geese, "but they are not yet finalized."

This year's hunt will begin in late September rather than early October. Raillard says Ontario, Quebec and New Brunswick have had earlier hunts for several years now.

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8. Food Day recognizes Canadian farmers

Farmers are being recognized for their contributions to Canada's food system through an event called Food Day, Saturday, July 31.

Organizer Anita Stewart of Elora, Ont. is one of Canada's premier culinary writers. She says Food Day is meant to celebrate the role of farmers in food production.     

"Other recognition days are geared to those who eat food," she says. "This one is for those who produce it, for those who farm the land and sea so we all can eat."

Food Day grew from an event Stewart created for the Civic Holiday in 2003, called the World's Longest Barbecue.

At the time, it was meant mainly to draw attention to the plight of Canadian livestock farmers who were being pummeled by the aftermath of BSE. Barbecue participants were encouraged to go to their grocer, butcher, farmer's market or wherever they buy meat, make a purchase, fire up the grill and support the sector.
  
Over the years, Stewart's matured the farmer-focused initiative into a virtual barbecue, encouraging Canadians no matter where they live to log onto a central website -- http://foodday.ca/ -- post their menus and join others in showing their support for Canadian food producers.

She's had responses from 46 countries.

"Canadians -- and others -- everywhere support Canadian farmers and Canadian food," she says.

This year, Stewart has raised Food Day's profile further by drawing some of Canada's top chefs and restaurants into the virtual event. In all, 136 restaurants are participating, featuring Canadian food on their menus.

"It's a great group with chefs who are stepping up to promote and cook the food of our country," Stewart says.

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Disclaimer

The editor and journalists who contribute to FCC Express attempt to provide accurate and useful information and analysis. However, the editor and FCC cannot and do not guarantee the accuracy of the information contained in this report and the editor and FCC assume no responsibility for any actions or decisions taken by any reader of this report based on the information provided in this report.

This report is protected by copyright and is intended for the personal use of the subscriber only and may not be reproduced or electronically transmitted to other companies or individuals, in whole or in part, without the prior written permission of FCC. The views expressed in this report are those of the authors and do not necessarily reflect the opinion of the editor or FCC.

Copyright 2010, Farm Credit Canada