The door is opening a little wider for Canadian beef exports to the European Union. 

Canada has joined the United States and Australia in qualifying for the EU's 20,000 tonne annual duty-free import quota for beef raised without growth hormones. 

The quota was established in the spring of 2009 following compensation negotiations between the U.S. and EU. It was a settlement reached after a World Trade Organization Dispute Panel ruled the EU ban on growth promotants was not scientifically justified. Since the quota operates under the WTO, it needs to be open to all countries that meet the specification. A number of other countries are also trying to demonstrate that they have reached the EU standards.  

"The EU has finally acknowledged that Canada meets the specification required for the quota because cattle have to be fed a certain ration and (are) grading out at a certain quality level," says John Masswohl, the director of government and international relations with the Canadian Cattlemen's Association. 

A number of Canadian cattle producers raise their animals without growth hormones, but have relied on relatively small domestic or U.S. niche markets for any premiums.

"The European Union is a high income market, willing to pay the higher cost of beef produced from cattle without growth promotants, but for years our access has been limited to a small quota at a 20 per cent duty," says CCA president Travis Toews. "Finally, we can start to scratch the potential of this market." 

The Canada Beef Export Federation estimates the new duty-free access could be worth more than $10 million per year. The EU duty-free quota is expected to increase to 45,000 tonnes in 2012. 

Meanwhile, Canada should have access to another 3,200 tonnes of duty-free quota based on a just-finalized memorandum of understanding with the European Commission. It would serve as compensation for the continued EU ban on beef raised with growth hormones. 

This is good news for the Canadian cattle sector, but the big prize remains the ongoing free trade negotiations with the European Union. 

"We have very clearly planted the idea in the minds of the Canadian and the European negotiators that there has to be some very substantial access for Canadian beef," Masswohl says. "We'll have to see what gets negotiated at the end of it, but we are certainly firm on our line that we need to have unlimited, duty-free access to the European Union."  

Canadian and European negotiators held a fifth round of discussions last month in Ottawa.

The Canadian Food Inspection Agency has confirmed that the virus detected in a commercial poultry operation in the Rural Municipality of Rockwood, Manitoba earlier this week is low pathogenic H5N2 avian influenza. 

Pathogenicity refers to the severity of the illness caused in birds. 

The infected farm remains under quarantine, and all birds in the operation will be humanely destroyed within days. As a precautionary measure, the CFIA has also quarantined a local hatchery and two poultry farms that had significant contact with the infected farm. 

Animal health and public health authorities from the Province of Manitoba, local poultry specialists and industry are actively collaborating on the response to avian influenza in the Manitoba poultry operation, and in supporting the producer. 

The threatened disruption of Quebec’s lucrative snowmobiling industry is the only way farmers can get the provincial government to listen to their demands, says the head of the province’s farmers’ union. 

“We have no choice,” Christian Lacasse, president of the Union des producteurs agricole -- or UPA -- says. “We have to act to protect our interests.” 

Earlier this month, the UPA’s 40-member general council officially called its 65,000 members to block access to off-road vehicle trails that pass through their properties. 

Since roughly half of the 33,000 kilometres of snowmobile trails in Quebec pass across farmers’ lands, the edict threatens to derail the province’s billion-dollar snowmobile industry this winter. 

The UPA is flexing its muscles in disagreement over the provincial government's recent changes to Quebec's farm-subsidies revenues -- changes that are expected to continue. 

Last spring, the provincial government brought in a series of reforms designed to improve the performance of farming operations, increase support offered to emerging sectors and promote agricultural diversification.

While lauding some aspects of those reforms, the UPA contends the changes to the province’s Farm Income Stabilization Insurance program led to an $80-million cut in subsidies to some of the smallest and most fragile areas of farming -- notably cow-calves and lambs. 

Closure of the trails is also in anticipation of further changes to farm subsidies expected to be brought to the legislature before Christmas. 

“It is too early to say when it will be tabled or what it will contain,” says Clément Falardeau, a spokesperson for Quebec’s ministry of agriculture, fishing and food. “But it will be coming soon.” 

Lacasse says farmers are tired of the uncertainty around agricultural funding -- doubt they've had since a 2008 agriculture report called for a shift to base agriculture on demand, rather than supply. 

Though he sympathizes with Quebec’s 100,000 snowmobilers and the thousands of small business owners who depend on the approximately 100-day snowmobiling season, Lacasse says farmers have no option but to block access to their lands.

“This is not a decision we have taken lightly,” Lacasse says, adding the protest will end if the UPA feels the government takes its concerns into consideration. 

Quebec farmers blocked snowmobile trails in 2005 and successfully forced government action on municipal taxation.

Several sectors of Canadian agriculture are receiving assistance through federal programs.

The Canadian Special Crops Association is receiving $30,000 to promote Canadian mustard seed in international markets. 

Federal Agriculture Minister Gerry Ritz made the announcement earlier this week. In a news release, Agriculture and Agri-Food Canada notes this country is the second largest producer of mustard seed in the world and is considered the largest exporter with nearly half of the world's exports. Canadian exports of mustard seed in 2009 totalled over $128 million. 

CSCA CEO Gordon Bacon says the funds will allow the group to undertake promotional activities with food companies, chefs, culinary schools and dieticians to build interest in Canadian mustard and assess the needs of international customers. Earlier this year, CSCA received $35,450 to reach out to buyers at key international food shows and develop marketing material. 

Canada's bison industry is also receiving some funds. 

The Canadian Bison Association will receive $370,000 of federal funds to help grow its markets. $194,500 through the AgriMarketing Program will help industry officials participate and promote bison products in trade shows, advocate with U.S. industry stakeholders to improve Canada’s market access and prepare for the 2012 International Bison Conference in Québec. 

A further $177,760 is available through the Canadian Integrated Food Safety Initiative to continue the development of the bison industry traceability program, which tracks the movement of bison through the supply chain. 

Mark Silzer, president of the Canadian Bison Association points out that global markets are essential to the growth of the nation's bison industry. Funds will help the bison industry to work with marketers to elevate the profile of bison and bison products amongst consumers internationally. "The bison industry recognizes the value of traceability as a tool to control the possible spread of disease and to facilitate market access and this investment will help develop a system that works for the bison industry," he says.

Three of Canada's leading malting industry organizations are also receiving federal funding. $597,000 will go to the Canadian Malting Barley Technical Centre, the Malting Industry Association of Canada and the Brewing and Malting Barley Research Institute. 

An investment of $410,000 is for the CMBTC, a non-profit malting barley research and market development facility. The MIAC, which represents Canada’s major malting companies, will receive $155,000 and the Brewing and Malting Barley Research Institute, which represents the interests of Canada’s malting barley research, breeding and variety sector, will receive $32,500. 

A statement from the federal government says the three groups will use the investment to refine and implement a strategic plan outlining their collaborative goals to enhance Canadian competitiveness in global markets. This will include the creation of a common branding strategy to highlight Canada's unique, world class malt and malting barley industry. 

In 2009, Canadian exports of malt amounted to more than 631,000 metric tonnes at a value of more than $444 million, while 1.6 million metric tonnes of barley were exported at a value of $441 million. 

The national guideline for the care and handling of beef cattle is set to be updated. 

The Canadian Cattlemen's Association animal care committee has been exploring renewal of the existing beef code of practice and decided to partner with the National Farm Animal Care Council and use its code development process. 

The beef code of practice will be one of the first codes to enter the NFACC code development process, which was finalized in 2009. 

The process involves a code development committee and a scientists' committee. The CCA says it sees this as the best option to achieve an outcome-based, science-based code of practice supported by all stakeholders. 

"This is an industry standard," says Ryder Lee, manager of federal-provincial relations with CCA. "It sets out sound management and welfare recommendations for housing, transport (and) processing."

He explains that animal care falls under provincial and federal statutes, and "the code takes that into consideration." 

Since the original code is nearly two decades old, a revision is due. 

"The Internet, YouTube, the way people interact with food now -- a lot has changed since 1991," Ryder says. "It's a science-based code and science marches on. As science marches on, practices and expectations change." 

The update will include what is relevant for today's beef industry as well as the new science that is related to the industry. It will help new producers see what's expected. And, the code renewal process will play an important role in telling consumers how beef cattle are raised in Canada. 

"It lets everyone know what the latest is, rather than the way it's always been," Ryder says. "But these are beef and there will be a lot of things the same." 

The revised code is expected to be finalized in 2013 following stakeholder and public comment periods in 2011 and 2012.

Monsanto Canada has opened its new $12 million breeding facility in Winnipeg, Man. 

The company's research and breeding activities will take place at the new site and focus on top-yielding canola hybrids to Canadian canola farmers. 

"Our research and investment in breeding, biotechnology and agronomy has helped farmers realize significant yield gains in crops like corn, soybeans and cotton," says Derek Penner, president and general manager of Monsanto Canada. "Over the past five years, we have brought that level of investment and expertise to canola. Canola is a uniquely Canadian crop and a key strategic focus area for Monsanto's Canadian business." 

Monsanto Canada invests $20 to $30 million annually into research and development activities focused specifically on canola. The result has been the introduction of hybrids like DEKALB(R) to the western Canadian marketplace, now grown by thousands of farmers across Canada. 

The Monsanto Canada Breeding Centre covers approximately 29,000 square feet and about 40 staff are involved in line development breeding and breeding support functions, as well as the canola breeding management team. 

The new site includes laboratory facilities for all canola quality analytics, double haploid breeding (tissue culture) and plant pathology. Climate-controlled plant growth chambers, soil preparation areas and warehouse space are also incorporated into the facility design and accommodate activities related to canola plant breeding such as hybridization, early generation selection, plant cultivation, drying and threshing. 

"Farmers continue to embrace and demand new technology," says Jonathan Jenkinson, Monsanto Canada's canola breeding lead. "As we build on our platform of making improvements through the use of breeding, biotechnology and agronomy, this facility -- and related field research testing sites spread across Canada -- will play a critical role in bringing new tools to farmers to help them be successful."

The Manitoba Cattle Producers Association took a step into the future when it launched its new branding strategy at the annual general meeting in Brandon on November 6. The goal of the rebranding effort is to create a bond between consumers and producers. 

President Jay Fox says the campaign for the newly-named Manitoba Beef Producers will roll out over the next year. 

"The big thing is we need to have our voice heard," he says, adding the association feels now is the time to show the whole province that cattle producers are good stewards of the land and environmentally responsible producers. 

"If we did harm environmentally, we'd be out of business," Fox says. 

The new name, logo and slogan are aimed at bringing consumers and beef producers closer together, and to differentiate the organization from the dairy cattle sector.

The new logo incorporates basic graphic elements representing sustainability, water, land and socially responsible animal husbandry. 

"The new slogan -- My farm. Your family. Our future -- accentuates the image we want to convey to our customers," Fox says. 

"We want consumers to think about the steak on their plate as a product grown on a Manitoba farm by a Manitoba producer," Fox says. It's a different picture than a herd of cattle grazing in the field. 

The bill for the communications initiative, which provides the organization with a protected name, logo and slogan, was approximately $50,000 and came from existing communications funds, Fox says. He emphasizes this is a one time expense. 

Now that a strategy is in place, Fox says the organization has focus. 

The newest addition to Alberta's Cattle Price Insurance Program is now available to beef producers looking for price, currency and basis risk protection on backgrounding cattle between 750 to 950 pounds. 

The CPIP-Feeder is voluntary, market driven price insurance designed to give some stability to Alberta producers facing a volatile market, says Jennifer Wood, program co-ordinator with agriculture financial services corporation. 

This newest addition to the CPIP suite of products allows producers to match the policy length (from 12 to 36 weeks) to the expected time of sale, providing a known floor price without limiting the ability to sell at a higher amount. 

According to Wood, the product is unique because it is re-priced every day it is available for sale and offered continuously throughout the year. Whenever a producer thinks the coverage looks favourable he or she can "jump in and purchase it." 

Wood notes the majority of the province's auction markets are providing price data. She says this allows for the creation of a settlement index that is representative of the Alberta cash market and a made-in-Alberta risk management tool reflecting the actual risk to Alberta feeders. 

Eligible producers must be 18 or older, file a farm income and expense statement in Alberta and own the cattle for a minimum of 60 continuous days throughout the policy. 

Wood acknowledges the need for some education as the product is rolled out since this type of risk management is a new concept for many livestock producers. 

CPIP-Feeder is the second of three components aimed at providing cattle price insurance. CPIP-Fed is currently available for feedlot operators, with CPIP-Calf scheduled for introduction in spring 2011 for cow-calf operations. 

Look for program details at www.afsc.ca under the Risk Management section. 

Woodbridge, Ontario-based Organic Resource Management Inc. (ORMI) is working with several Ontario farmers to convert common restaurant waste into energy -- and cash. 

Nearly every restaurant produces fat, oil and grease (FOG) that is washed down drains where it would clog and corrode sewage system arteries, if not for interceptors that capture the material. But FOG must still be collected or sewers will back up. 

Interceptors are drained by companies like ORMI. About once a month, ORMI drains over 8,000 interceptors in Ontario, Quebec and British Columbia. Originally, ORMI processed FOG and dumped it in landfills. Then, the company recycled FOG by converting it into farm field compost. 

Now, ORMI is working with several Ontario farmers to convert FOG into energy. FOG is fed into anaerobic digesters (ADs) that convert animal manure into biogas and generate electricity. This process generates a renewable source of energy and a renewable source of income for farmers. 

Anaerobic digestion eliminates 98 per cent of the pathogens in manure so the AD waste can be used as clean compost. Adding FOG to animal waste doubles the production of electricity, according studies conducted at the University of Guelph. 

Paul Klaesi, an AD pioneer and past president of AgriEnergy Producers' Association of Ontario, operates an AD at Fepro Dairy near Cobden, Ont. Using 15 cubic metres of manure a day produced by his dairy cattle, and with the help of FOG supplied by ORMI, the Fepro digester generates 500 kilowatts of electricity per hour, 24 hours a day, seven days a week "without relying on wind or sun," Klaesi says. 

Klaesi sells 90 per cent of the AD energy to the grid; the digester uses 10 per cent of the energy it produces to run. ORMI pays a tipping fee to Fepro and receives a portion of revenue for the additional energy FOG enables Klaesi to sell to the grid. 

ORMI currently has five farm-based ADs under contract. When all five are fully operational, they will generate 2.5 milliwatts of electricity, 24 hours per day, seven days per week. In addition to expanding its collection of FOG, ORMI is converting a new property in Woodstock, Ont. into a solid food waste to AD feedstock transfer station. By next summer, ORMI will process and blend solid food waste, such as commercial green-bin waste, with FOG for delivery to its network of ADs. 

"We see this as a new method of capturing large volume of organic residual for processing into AD feedstock, which in turn will be the catalyst to feed a number of additional ADs, most of which will be farm-based," says Charles Buehler, ORMI CEO and chairman.

Information about ORMI is available at www.ormi.com.

I’m getting questions periodically regarding oat marketing. 

Like other markets, PFCanada continues to hold the line on further sales for the time being -- but I’m coming from the position of already being 50 per cent sold on 2010 production. 

The recent China syndrome news -- which resulted in a general price decline in commodity markets over the last week or two -- which we've talked about previously in this space has not done any significant technical damage on the oat charts so far. The news from China has just corrected futures back down to test the major support lines. 

On the Chicago Board of Trade weekly oat chart, the big red candle data point on the chart does signify a significant “key reversal” from major resistance near the $3.80 a bushel area. But the major gap area below, which begins near the $3.30 a bushel level, must hold. And honestly, with the exception of outside forces weighing on grain markets, I suspect the downside risk for oats is limited and too early for the oat market to enter a sustained price downtrend. 

Given the supply-demand dynamics as outlined below, another price move to the upside seems a decent bet in the weeks or months ahead. This creates an opportunity to price remaining old crop inventory as well as initiate 2011 crop forward contracting. 

While cash bids have slipped off their recent highs, overall supplies are very tight in North America this year with Canada having one of its smallest crops on record. 

Canadian Oats Supply and Demand

000 tonnes
                  07/08   08/09   09/10   10/11
Supply
Carry in            556     949   1,527   1,169
Production        4,696   4,273   2,906   2,321
Imports              17      17      17      20
Total Supply      5,269   5,239   4,450   3,510

Demand
Total Domestic    1,515   1,282   1,202   1,000
Exports           2,805   2,430   2,078   1,975
Total Demand      4,320   3,712   3,172   2,975
Ending Stocks       949   1,527   1,169     535 

The 2010 StatsCan production estimate for Canadian oats is currently pegged at 2.32 million tonnes, which may still be too high given suspicion that StatsCan’s Saskatchewan acreage estimate may be overstated. 

In the table above, also note that both year-over-year domestic and exports must decline by 100,000 tonnes from the year before. That’s a tough feat without deeper rationing. 

The table also suggests a lower export total relative to last year, though the current pace of Canadian oat exports is already running 100,000 tonnes ahead of last year. And a drawdown of Minneapolis-Duluth cash oat reserves has already occurred. 

Canadian oat carryout projected for 2010-11 can be expected to reach very low territory -- and the table above is already using an optimistic production estimate and lowered demand expectations that will be difficult to meet without more of a bullish price response than we have seen to date. If carryout were to decline to 400,000 tonnes, that will be deemed critically tight. 

In the current market environment, it would seem that demand rationing through higher prices has not sufficiently occurred, nor have new crop 2011 oat pricing opportunities attained levels to guarantee a big boost to spring acreage potential relative to other cropping options. 

Grower deliveries are running ahead of normal percentage-wise, relative to available crop supply, so available supplies are not yet showing up as being that tight. The United States can still use carry-in stocks, but they will need to import from Canada, which will leave Canadian stocks very low going into the second half of the 2010-11 marketing year. 

Spring delivered oat bids are expected to remain well supported with U.S. buyers unless a slowdown in the American economy eventually disrupts stock markets.

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.