A surge of activity this past week has put spring seeding in Manitoba at least a week ahead of normal.

Seeding is well underway throughout much of the province, thanks to good weather and favourable planting conditions, the provincial agriculture department said Monday.

Usually, seeding in Manitoba doesn’t start until the first week of May. But near-perfect conditions during the last week of April sent farmers out to the fields in droves, says Pam de Rocquigny, a Manitoba Agriculture, Food and Rural Initiatives cereals specialist.

"I would say we’re a week ahead of when guys normally like to get going," de Rocquigny says. "When producers get going, they can seed a lot of acres in a day."

MAFRI’s second crop report of the season, released April 30, shows seeding 70 per cent complete in the Interlake region of the province, 50 per cent complete in the central region and 40 per cent complete in the eastern region.

Progress is slower in the southwest and northwest regions, with completion rates of 10 and five per cent respectively, because of cool, wet conditions.

At this rate, seeding for cereal crops could wrap within a week in most regions, says de Rocquigny. Heat-loving crops such as corn, soybeans and pulses will take longer because the nights are still cool. However, some progress with canola, flax and sunflowers is reported.

The situation this spring is in stark contrast to 2011, when excessive moisture left nearly three million acres of annual cropland either unseeded or drowned out.

Dan Mazier, who farms northeast of Brandon, says last year he didn’t get on his fields until May 10. This year, he planted field peas on April 25 and had seeded 20 per cent of his entire crop, including most of his wheat, by May 1.

The only element missing now is warm weather to give crops a jumpstart, Mazier says, while also acknowledging the early calendar date.

A mild, dry winter with little snow had earlier raised fears of a spring drought. But de Rocquigny says soil moisture levels are adequate for germination and stand development in nearly all parts of the province.

As usual, though, timely spring and summer rains will decide whether or not Manitoba farmers harvest a bumper crop this year, she cautions.

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Some Alberta farmers have already started seeding, but warm weather is needed to dry the soil before more of the province can get planting.

Most plantings have occurred in the southern part of the province. It's about 20 to 25 per cent finished, says Harry Brook, a crop specialist with Alberta Agriculture. He adds he hasn’t heard of any frost issues occurring, noting no crop has yet emerged that would be susceptible to the cold.

"May is when we get our killer frost... that last kiss of winter before (it) leaves for a summer holiday," he says.

Despite the relatively early spring, seeding operations generally aren’t ahead of schedule. About two weeks ago, weather was warm and it looked like growers could get a head start, but then a week of cold temperatures pulled most everyone back.

Also delaying progress has been recent precipitation. Even east-central Alberta, which is usually perennially dry, has received rainfall, about three inches worth, last weekend.

"Predictions right now for large parts of the province are for intermittent rain showers for the week," says Brook. "It’s going to take a few days of good drying weather for that soil to dry up enough so we can get on the fields."

It will likely be the last half of May or the first week of June before most farmers are able to start seeding, which is pretty typical.

The rain has been a welcome relief as most parts of Alberta hadn’t experienced significant precipitation since last July, Brook points out. A saturated spring and early summer last year provided enough moisture to bring the crop to fruition, but then a long, warm and dry autumn followed. Winter didn’t provide any relief either, as snowfall was definitely lacking.

"Subsoil moisture is extremely low, but our surface moisture is now in pretty good shape throughout most of the province," Brook says. "So they’re looking good, at least to get things started."

Should conditions remain wet, he says, there is the danger ergot could rear its head as a potential problem. The province is particularly susceptible given it has already experienced two wet springs in a row.

Canada's pig population numbers have risen once more.

Inventory figures released last week by Statistics Canada show the population rising in the first quarter of 2012 to 12,040,000 pigs, from 12,020,000 in the last quarter of 2011.

That's a 1.8 per cent increase from the same date in 2011, following a 1.5 per cent increase over the previous 12-month period.

The biggest growth took place in Saskatchewan, the fifth-largest hog-producing province, where inventories rose nearly 14 per cent. Overall, Quebec remains the biggest producer, with 3.9 million hogs, followed by Ontario with 2.9 million hogs.

Ontario remains static in its inventory and breeding herds -- it was the largest participant in the 2008 national sow cull program, which saw about 25 per cent of the provincial herd cut.

The numbers have not returned. Statistics Canada says sow inventories remained virtually unchanged from April 1, 2011 at 1.3 million head, adding that farmers anticipated a 2.3 per cent increase in the number of sows expected to farrow during the second quarter of 2012.

Some activities dipped, but only marginally. About 5.4 million hogs were slaughtered during the first quarter of 2012, down 0.1 per cent from the same quarter in 2011. And exports were down, but less than one per cent, with 1.4 million hogs exported.

Globally, the picture is good. Pork production has increased about 10 per cent since 2007.

All this is positive news for Canada's pork sector.

"The financial health of the sector was a lot better in 2010-2011, relative to 2007-2009," says Ridha Chilmeran, economic analyst with Ontario Pork.

Overall, he says, a combination of less pork on the market, increased hog prices and reduced feed costs allowed for some profits in 2010-2011. But the price of feed has crept up again and has become a concern for pork producers.

"Current high feed costs are making it tough right now," Chilmeran says.

If predictions about a large United States corn crop are correct, he says, there might be relief in sight.

A high ranking official with Glencore International is confident that a $6.1-billion deal to purchase Viterra will receive the necessary government approval.

The first step will come next week when the provincial government receives a report from consultant Informa Economics. It's examining all aspects of the proposed deal -- including employment, impact on competition and effect on the province's economy and provincial government revenues.

Swiss-based Glencore plans to sell some of the Viterra assets to two Canadian-based companies, Richardson International and Agrium, for a total price of $2.6 billion. There is no specific timetable on when the sale would receive the necessary federal regulatory approval, including the go-ahead from the Competition Bureau.

"As far as Richardson and Agrium are concerned, we have to receive approval for the initial transaction and then they have to receive approval for the secondary transactions," says Chris Mahoney, director of Glencore Agriculture Products. "I think there will be a period when there will be as you call it an overlap. There will be a period when we will be running the entire company."

Mahoney says the plan is to have a smooth, clear integration between Glencore and Viterra. The process will ensure a solid structure is in place, employees are comfortable working with Glencore and jobs are clearly assigned "so that everything is ready for the harvest," Mahoney says. "That is the number one priority."

If the sale is approved, Mahoney says farmers should not notice a lot of difference between Viterra and Glencore.

"It will still be the same people, talking to the same farmers and providing the same services," he says. "What we would hope to do is combine the best existing practises within Viterra with the best practises of Glencore offshore. We are certainly not looking to reinvent the wheel and by and large, I think it will be business as usual.

Glencore has already promised to have its North American agricultural operations head office located in Regina.

While the Canadian Food Inspection Agency is planning to stop cleaning vehicles at the ferry terminal at Port aux Basques, N. L., all inspection and compliance activities will continue.

"The CFIA is working with other federal bodies to develop alternatives for drivers to have access to washing facilities at the port," says Lisa Gauthier, a spokesperson with the agency. "Vehicles will still be inspected by the CFIA prior to boarding the ferry."

Industry was concerned when CFIA first announced the decision to stop the spraying service since it's done to prevent the spread of nematodes that can infest potato plants.

However, the fact that the agency will continue inspections, and not allow contaminated vehicles on the ferries until they are properly cleaned, helped alleviate that concern.

"Vehicles with too much soil won’t get on the ferries," says Greg Donald, general manager of the Prince Edward Island Potato Board. "They aren’t going to clean the vehicle. The driver will have to do it themselves to meet standards to get on the ferry and we’re OK with that. It’s very important they maintain the same level of standard of inspection."

Gauthier says drivers are responsible for ensuring that their vehicles, contents and any equipment on board are free of soil contamination prior to boarding the ferry at Port aux Basques. Drivers must declare if they are carrying regulated articles, like potatoes, other root crops, plants, soil and used burlap bags.

"Currently, all vehicles are inspected prior to loading on the ferry. This is not changing," Gauthier says. "The interior and exterior of every vehicle is inspected for the presence of soil and regulated articles. All uncertified regulated articles are confiscated and the vehicle is cleaned if necessary."

It's expected that the cleaning of vehicles will become the responsibility of the owner by 2014-15.

According to Gauthier, nine per cent of vehicles boarding the ferry at Port aux Basques in 2011-2012 required washing or vacuuming to remove excess soil.

The United States government is in the early stages of rewriting its farm legislation -- a complex web of policies spelling out food assistance, nutrition and conservation programs, as well as support for agricultural producers.

Although the U.S. political landscape is unpredictable, lawmakers need to produce a 2012 farm bill by early August, otherwise, the 2008 farm bill legislation will extend into next year. There is currently lots of momentum in the U.S. to address a ballooning debt and a widening deficit, so the next farm bill could be quite different than previous legislation.

Why is the 2012 farm bill important for Canadian agricultural producers?

We routinely repeat that the Canadian agri-food industry is evolving in the context of a globalized world. But before thinking about global agri-food markets, many Canadian businesses first make decisions in a continental market.

Despite some bottlenecks, like the country of origin labelling, there are many examples that demonstrate how Canada and U.S. markets are closely tied. For example, the recent drought in the southern U.S. resulted in higher cattle prices in Canada. Increases in American acreage for a particular crop lead to lower prices for Canadian producers growing the same crop.

What could the next U.S. farm bill look like?

Let’s look at some of the most important programs and subsidies of the 2008 farm bill and possible impacts to the 2012 bill based on today’s budgetary pressures.

Under the 2008 bill, price support mechanisms compensate producers if market prices fall below pre-determined reference prices. Thanks to strong crop prices, few payments have been required recently. Subsidies to crop insurance premiums represent the largest subsidies offered to crop producers under the 2008 bill, but it would be politically risky to cut such a popular program.

Some limited savings could come from reducing the size of the Conservation Reserve Program, which pays producers to set aside environmentally sensitive lands. A prime candidate that would cut the size of the farm bill budget is direct payments. These are made regardless of market prices or actual production on farms, and mostly benefit landowners as opposed to producers. Eliminating direct payments would result in savings of roughly $5 billion per year.

In theory, direct payments create few distortions in the market and provide little advantage to U.S. producers. In reality, they can help manage cash flows and risk.

The interesting question is what, if anything, will replace direct payments? A possibility is to launch revenue loss coverage that otherwise is not covered by the existing crop insurance program. Unlike direct payments, a revenue loss insurance program would likely be based on actual planted acres and involve higher reference prices than existing programs.

This is the conundrum facing those working on the U.S. farm bill, and a source of risk for Canadian agriculture.

Eliminating direct payments would provide immediate savings of $5 billion per year and would satisfy demands to reduce public spending. A revenue loss program is dependent on market conditions and would not likely generate payments in the short term, given forecasts of strong crop prices. But what if market conditions turn and prices drop -- closer to their historical averages? Subsidies would be triggered, and Canadian producers could find themselves at a disadvantage. In essence, U.S. crop producers would give up guaranteed payments in return for locking in their recently strong profit margins.

Financial assistance for U.S. crop producers is more generous than what is available to livestock producers. Yet, insurance programs are increasingly popular and available to American cattle and hog producers. It would not be surprising to see the budgets for these programs increase if savings can be found elsewhere in the legislation.

There are some efforts to broaden a profit margin protection program for U.S. dairy producers in lieu of the current milk support price mechanism.

The current system does not offer dairy producers any protection from rising feed costs. What is innovative from the U.S. perspective is that some lawmakers propose that margin protection involve some form of supply management. Producers would only be guaranteed a payment if they agreed to limit production when prices are low.

This production limitation component would be voluntary, but nevertheless could be structured so that it would be in a producer’s best interests not to overproduce.

What will the impact of the next U.S. farm bill be on Canadian producers?

On the one hand, budgetary pressures on the U.S. government present opportunities to make changes to U.S. farm policy.

On the other hand, a likely outcome is new programs tied to actual plantings with higher reference prices.

U.S. support to agriculture not tied to actual production decisions would be in the best interest of Canadian agricultural producers. Any other farm support program could result in unfair competition for Canadian producers and could potentially result in trade disputes.

Discussions around the U.S. Farm Bill can be monitored through the websites of the U.S. Senate Committee on Agriculture, Nutrition and Forestry at http://www.agriculture.senate.gov and the U.S. House Committee on Agriculture at http://agriculture.house.gov.

The agriculture media widely publicized the results of the April 24 Statistics Canada acreage report for 2012 and acreage increases are anticipated for the big crops like canola, wheat and barley. My focus today involves a quick and dirty review of the smaller special crops.

Canadian producers intend to flock back to dry peas and flax this year, but pare back modestly on lentil plantings. Following is Statistics Canada's 2012 estimates of principal field crop area report. The figures are as of March 31, 2012, in thousands of acres. Source: Statistics Canada.

                            CANADA    Canada    CANADA
                             2012      2012      2011
                            24-Apr   PFCanada    Dec
                            StatCan             Seeded
Flaxseed                    1,040     1,000      695
Sunflower (MB)                 60                 35
Dry Peas                    3,310     3,250    2,328
White/Color Beans (MB/ON)     245                145
Lentils (SK, AB)            2,460     2,250    2,570
Mustard (SK)                  230                265
Canary (SK)                   275                235
Chickpea (SK)                 265                105

Lentils

Lentils were the only major crop in the StatsCan report where acreage intentions were down on the year. The agency pegs the crop at 2.46 million acres, down just 110,000 acres from last year. StatsCan did not give a red/green breakdown, but implies heightened grower interest relative to last year in planting greens.

The StatsCan estimate still implies a large lentil acreage base, which in turn probably further delays price recovery in this well-supplied Canadian market. Absent a production or quality threat for either North America or India’s khariff cycle (summer crop) production, the green lentil market will likely remain stagnant.

Peas

StatsCan forecast 2012 dry pea planted area will jump 42.2 per cent to 3.31 million acres. I think this is about in line with trade expectations, but well up from 2.3 million acres last year. There was no indication in this report of yellows versus greens. I suspect the overall pea acreage number could yet expand by another 100,000 to 200,000 acres.

As far as market influence, I don’t suspect Canadian pea acreage will be high enough to adversely affect price prospects. However, larger acreage along with timely seeding likely means users will not aggressively pursue securing inventory right away.

Flax

Canadian flaxseed area is estimated at 1.04 million acres, up almost 50 per cent from the 695,000 acres seeded a year ago, but in line with PFCanada expectations.

No market influence here. Old crop supplies are extraordinarily tight, so there's little room for new crop production threats given the lack of supply cushion. However, demand also remains slow from Europe, at least until the Former Soviet Union supplies are drawn down. And there are recent indications of Former Soviet Union supplies dwindling, given tightening price spreads between Canada and landed Europe valuation.

Mustard

In Saskatchewan, producers intend to cut back on mustard, but increase plantings of canaryseed and chickpeas.

Mustard area in the province is pegged at 230,000 acres, down 35,000 acres from 2011. Here again, no breakdown of mustard classes, but the overall number is considered small relative to historical numbers. This is likely to result in a trend towards tightening inventory for the year ahead, especially if yields come in below average. Decent carry-in of 80,000 tonnes or so and a 125,000 tonne 2012 crop can allow the supply/demand to squeeze by -- but there's no wiggle room.

Canaryseed

Canaryseed plantings are estimated at 275,000, up 40,000 acres from last year. But given already tight old crop stocks, 2012 acres seem short. Unless demand is curtailed and/or old crop supplies are still being understated as some in the trade suspect, supplies of canary for the year ahead appear very tight again.

On the surface, there is enough of an acreage (and production shortfall) here to suggest the need for the market to buy acreage through some price incentive. But do users care enough to take action at this time?

Dry Beans

Dry bean planted area is set to rebound in both Ontario and Manitoba this year. StatsCan predicts 2012 Ontario dry bean area at 100,000 acres, up 17.6 per cent from a year ago, but still below the nearly 140,000 acres planted in 2010. Manitoba dry bean area is expected to see a major increase, more than doubling to 145,000 acres from the 60,000 planted in 2011, and exceeding the 135,000 acres seeded in 2010.

American dry bean producers are also expected to increase plantings in 2012, with total intended U.S. dry bean area at 1.67 million acres, up 38 per cent from a year ago, although 13 per cent below 2010.　

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.