A livestock tax deferral is now available to drought-stricken livestock producers in Ontario and Quebec.

"This summer's hot and dry weather has drastically reduced feed supplies for many Ontario and Quebec farmers, forcing them to make some tough herd management decisions," says Agriculture Minister Gerry Ritz. "With a tax deferral, producers will have some breathing room by being able to redirect money towards replenishing next year's breeding stock and get back to business."

Federal and provincial officials say they are working as quickly as possible to assess the impact of drought under the AgriRecovery Framework to determine whether further assistance beyond existing programs is needed to help producers deal with the potential additional costs. The AgriRecovery assessment will be completed once harvest is complete and the full impact of the disaster is known.

"While the effects of drought can be seen on fields in many parts of central and eastern Canada, it is still too early to know the full extent of damage to crops and feed stocks," says Parliamentary Secretary Pierre Lemieux. "Production is still underway and recent rains may still improve the crop and feed outlook."

The tax deferral allows eligible producers in designated areas to defer income tax on the sale of breeding livestock for one year to help replenish breeding stock in the following year.

Proceeds from deferred sales are included as income in the next tax year, when they may be at least partially offset by the cost of replacing breeding animals. In the case of consecutive years of designation, producers may defer sales income to the first year in which the area is no longer designated.

To defer income, the breeding herd must have been reduced by at least 15 per cent. If this is the case, 30 per cent of income from net sales can then be deferred. In cases where the herd has been reduced by more than 30 per cent, 90 per cent of income from net sales can be deferred.

Eligible producers will be able to request this deferral when filing their 2012 income tax returns. Livestock producers are advised to contact their local Canada Revenue Agency Tax Services Office for details on the income tax provisions.

For a list of 2012 livestock tax deferral prescribed regions, go to http://www4.agr.gc.ca/AAFC-AAC/display-afficher.do?id=1345736455077&lang=eng.

In addition to tax deferral, producers have access to assistance through existing business risk management programs, including AgriInsurance, AgriStability, and AgriInvest. Producers can contact Agricorp and La Financière agricole du Québec for details.

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There's a new player in the Canadian canola business.

CWB, formerly known as the Canadian Wheat Board, has announced it will sell the oilseed through 42 delivery points across western Canada.

None of the major grain companies are involved in the process. Agreements have been reached with Parrish & Heimbecker, as well as a number of smaller independents. CWB officials say they hope to add other delivery locations in the future.

CWB is expanding its sales options following the end of the single desk selling system for wheat, durum and barley on Aug. 1.

"The farmer benefits of pooling apply just as successfully to canola as to wheat," says CWB president and CEO Ian White. "Farmers retain all the profits generated from their grain sales, instead of simply taking a flat price at the elevator. It also means they can spend more time on their crops instead of chasing the commodity futures market."

Organizations representing canola growers in Manitoba, Saskatchewan or Alberta have been mum on the issue. Speaking from his farm at Nokomis, SaskCanola Chair Brett Halstead says "it will provide another marketing option for farmers."

The CWB initial payment for canola is expected to be announced in early September.

A list of farmer delivery points for CWB canola is located at http://www.cwb.ca/public/en/newsroom/releases/2012/news_release.jsp?news=082312.jsp.

The army worm is back in the Maritimes, much to the chagrin of potato producers.

The pest has been absent from fields in Prince Edward Island for close to a decade. However, Shauna Mellish, an integrated pest management specialist with the P.E.I. Department of Agriculture and Forestry, says the pest has been found in the eastern part of the province. So far, the worms have not moved far geographically from the field were found, but she says that could happen before the end of the growing season.

"They tend to be cyclical in nature," Mellish says. "I received reports from my colleague in Nova Scotia and Newfoundland that they had been found in those two provinces, so it wasn't really a big surprise."

Mellish says there was an outbreak in several parts of P.E.I. about eight years ago and department officials have been monitoring for the pest ever since by setting traps in various areas. Until this year, all had turned up empty.

The worm gets its name from the fact they tend to move across fields like an army in search of new feeding grounds. While they feed predominately on grasses like oats, wheat, fall rye, corn and barley, they do attack some vegetables including beans, cabbage, carrots, onions, peas, peppers and radishes, in addition to potatoes.

"They can do quite a bit of damage and, unless you are scouting, you won't spot them until it is too late," Mellish says.

That's because the army worms tend to feed at dawn and dusk. During the day, they tend to take refuge in vegetation or the soil. Mellish says all growers should be vigilant in scouting their fields at dawn and dusk.

"You need to know the extent of the problem," she says.

She recommends examining plants along field margins and throughout the field, in vegetative debris on the ground and areas where plants have lodged. Feeding damage is identified by leaf damage, severed leaf material on the ground and head clipping. A number of pesticides can be used to control the pest.

While they are faced with the return of the army worm, growers in Canada's largest potato producing province can at least take some solace from the hot, dry weather, which has kept late blight at bay. As of Aug. 21, there were only four cases of the virus reported. By contrast, there were over 40 incidents reported by the same date in 2011.

Market access for live Canadian cattle exports to Ukraine has been opened.

Following commercial interests identified by the Canadian industry for this specific market, the federal government said in a news release that it had negotiated a new certificate that will create new sales opportunities for producers.

Access for Canadian purebred live cattle for genetics and breeding purposes is estimated to be worth close to $12 million over the next three years. Canada shipped cattle to Ukraine only once in the 1980s as part of a project for the Canada-Ukraine Artificial Insemination Centre.

"CLGA is pleased that these sometimes difficult negotiations have concluded with a positive decision for Canadian and for Ukrainian producers," says Rick McRonald, executive director of the Canadian Livestock Genetics Association.

"Canada-Ukraine dairy genetics co-operation began in the 1970s and has continued through good times and bad. We are happy to see this very positive development."

The Canadian swine industry recently benefited from restored market access for live swine and new market access for swine genetics to Ukraine. The federal government says it's working to open and increase market access for Canadian beef, poultry and ready-to-eat meat products.

Canada is currently negotiating a free trade agreement with Ukraine, which would further open markets for Canadian agricultural exports. In 2011, Canadian exports of agriculture and food products to Ukraine were valued at more than $22 million.

A severe drought in the American Midwest has created an opportunity for Manitoba forage producers to increase hay exports to the stricken region.
 
Forage production is down by 50 per cent in some states and brokers from as far south as Texas are visiting Manitoba looking to buy hay for livestock, officials say.
 
Hay shortages in the U.S. could provide a boost for Manitoba's growing forage export industry.
 
"We understand there's a lot more hay moving south this year," says Wayne Digby, executive director of the Canadian Forage and Grassland Association in Brandon, Man.
 
"There's good demand for forages and the prices are really up."
 
Prices for hay have increased between 25 and 50 per cent this spring, depending on the quality, according to reports.
 
The question is whether Manitoba producers can meet the demand. The province's overall forage crop so far this year appears slightly below average because of a hot, dry summer.
 
"There isn't a surplus in Manitoba, but someone who does have a surplus may be able to sell it south," says Glen Friesen, forage specialist with Manitoba Agriculture, Food and Rural Initiatives.
 
Producers are taking a wait-and-see attitude until late September, when the final cut of hay is usually harvested, Friesen says.
 
"Most producers are taking names and numbers, thinking about what their options are, and waiting for the last harvest of the year to get a total production number," he says. "If they feel they can afford to ship some, they will."
 
High-quality baled alfalfa for dairy cows makes up the bulk of Manitoba hay exports to the U.S. Brokers are seeking to buy lower quality beef hay as well, Friesen says.
 
"They're looking for anything they can get their hands on."
 
Some wonder if drought-stressed U.S. livestock producers, already suffering from below-average corn and soybean crops, have limited ability to pay high prices for imported hay.
 
"Hay prices that were offered in spring were barely sustainable for those producers," says Chris Kletke of Brunkild, Man., who sells all his alfalfa hay into the U.S. "Now, with these prices in the fall, their ability to pay hasn't gone up any."
 
Some warn increased hay exports could result in local feed shortages for producers around Lake Manitoba, whose pastures were destroyed by overland flooding last year.
 
In a recent letter to the provincial government, Manitoba Beef Producers requested a forage assistance program to help flooded producers.
 
"There will be limited forage left available for flood victims to purchase if the province of Manitoba delays an announcement of assistance," MBP says.

The Beef Cattle Research Centre has just launched a new national online resource for the beef industry.

BeefResearch.ca is designed to help improve extension in the beef industry and to provide a more efficient and effective way to get research information to producers and the rest of industry, says BCRC chair and producer Matt Bowman.

The site contains a wealth of practical beef research news and information aimed at cow-calf producers, feedlots, veterinarians, meat packers, researchers and other industry stakeholders to help them stay informed about the latest innovations and promote more informed decision-making.

Research categories currently include animal health and welfare, beef quality, environment, feed grain and feed efficiency, food safety and forage and grasslands. Each category contains background information on specific research topics, technical fact sheets and research project summaries.

For example, the animal health and welfare category contains a section on antimicrobial resistance, with a detailed fact sheet and research project summaries on antimicrobial use and resistance in feedlot cattle and the effect of antimicrobials in soil and water.

Under feed grain and feed efficiency, one topic deals with distillers’ grain, including a detailed fact sheet and research project summaries on the effect of dried distillers’ grain on feedlot cattle health and the effect of distillers’ grains on beef quality.

An extensive frequently asked questions section also provides information by category.

Bowman encourages users to sign up to the blog and share their feedback.

"As time goes on and the website evolves, we’ll be able to deliver the types of information people want in the format they want it so they have the knowledge to do what’s best for their operation," he says.

According to BCRC data, applied beef research can directly affect producers’ bottom lines. For example, improvements in genetics and production have resulted in an increase in carcass weights by an average of seven pounds per year over the past 30 years. That increase was valued at $15 million in 2011.

New Brunswick potato harvest hotline phones are ringing for the tenth year in a row, helping the province’s potato growers find the employees they will need to complete the harvest.

Iain Dunlop, who started the hotline and continues to operate it with Paul Leahey, says the pair did a sample survey by calling growers to see what their needs would be.

Dunlop says the need is as great, if not greater than previous seasons.

The need for workers may be even greater this season after School District 14 in the western part of the province decided to cancel the annual potato break. The break was an over 50-year tradition that saw students in the district return to school two weeks earlier than the rest of the province, then take the two weeks off prior to Thanksgiving. This time off allowed students to head to the fields to help with the harvest.

In 2011, approximately 200 students worked the potato harvest. The district has a program in place for students to receive extra help if they miss school to work the potato harvest.

Joe Brennan, chairman of Potatoes New Brunswick, says when school ended in June, 90 students had registered to take the time off. Dunlop is concerned those students won’t take the entire time allowed if they feel they are falling behind.

To fill the gap, Dunlop and Leahey are working with Service New Brunswick to get the word out to workers. They are also talking with other sectors like the blueberry industry and fisheries, which employ seasonal workers who may be looking for work.

To help meet the potato industry's need for drivers, Leahey has conducted a truck driving process that has seen several hundred drivers trained for class 1 and class 3 licences.

Dunlop recommends growers, and workers, register as early as possible with their needs.

"Some call in the day before and we’re scrambling," he says.

The telephone hotline operates 24 hours a day, seven days a week. Growers can call 506-276-1839 (475-2867 if in Grand Falls) to place their orders for workers. Workers can call 506-276-1825 (475-2864 if in Grand Falls) to register their availability.

A western-based research project is looking at the viability of goats and sheep as environmentally friendly method of controlling unwanted weeds and brush in pastures.

Brian Payne has been looking after 700 goats involved in a research project going on this summer at a community pasture about an hour southeast of Saskatoon.

"There is no real competition with cattle for forage because the goats by nature prefer to browse," Payne says. "They go for the aspens, silver willow and snowberry. They are absolutely in love with thistle and a lot of the invasive plant species that cattlemen don't want."

Cattle-only grazing, combined with fire suppression, has left some rangeland degraded by an invasion of brush, woody plants and a noxious weed called leafy spurge. Brush and invasive weeds reduce the number of cattle that can graze on a piece of land.

"Weeds are becoming more of an issue," according to Nadia Mori, a forage specialist with Saskatchewan Agriculture. "Sometimes, it reaches a scale where it is just not feasible to use any chemicals. Sometimes, chemicals can't be used because the pasture is too close to water or there are other restrictions."

Mori says some innovative and consumer-sensitive range managers are realizing they can get an economic return from their weed and brush control by targeting the growing ethnic demand for sheep and goats in Western Canada. An estimated 60 per cent of goat meat on the prairies needs to be imported.

There is the perception among cattlemen that sheep and goats require lots of extra work and management. Payne says an efficient, economical system can be created with a few guardian dogs and an electrified fence.

"The (predator) pressure is always the most serious at night. This time of year, there is a lot of natural grub for the coyotes. None of them have found the goats yet, so we are keeping are fingers crossed," he says.

Some individuals in the United States are building small businesses by taking their goats to several pastures during the growing season. Payne believes the same opportunity could be considered in Canada.

The Saskatchewan Ministry of Agriculture is sponsoring a multi-species grazing conference in Humboldt on Sept. 5 and 6. Topics will include herd health, how to properly stock pastures and goat marketing.

Statistics Canada released its first 2012 Canadian production estimates on Aug. 22. According to the results of their survey of 15,105 Canadian farms between July 25 and Aug. 1, record Canadian canola production is anticipated, with increases in wheat and barley seen as well.

But a number of issues have tamed the market influence of this report. Firstly, within minutes of the data release, market participants immediately attempted to reintroduce their own biases on production expectations over/under the StatsCan numbers. And certainly since the survey of growers was taken a month ago and early harvest returns are starting to trickle in, production estimates from growers and the trade are being scaled back somewhat as initial yields disappoint.

The report did not turn out to be a key driver of market prices. Quite frankly, Canadian supply/demand dynamics are not driving the price discovery bus. One simply needs to view market conditions south of the border for ultimate market leadership for now. The bigger issue is still about addressing the ongoing American crop wreck, and more specifically demand changes that need to happen going forward.

Still, this report highlights that scorching midsummer heat and other factors in Western Canada have trimmed yield potential in canola and wheat. While the report did indicate farmers remain on course to produce bountiful crops overall this year, there are already suggestions that the production totals noted below are likely to decline in future reports.

July estimates of production of principal field crops

Crop         2010   2011   July 2012p   2010     2011 to
                                        To 2011  July 2012
            thousands of metric tonnes      % change
Ttl wheat1   23,167  25 261  27 013      9.0       6.9
Spring wheat 17 485  18 031  19 058      3.1       5.7
Durum wheat   3 025   4 172   4 273     37.9       2.4
Winter wheat  2 657   3 058   3 682     15.1      20.4
Canola       12 773  14 165  15 410     10.9       8.8
Corn         11 715  10 689  11 703     -8.8       9.5
Barley        7 605   7 756   9 508      2.0      22.6
Soybeans      4 345   4 246   4 405     -2.3       3.7
Oats          2 480   2 997   2 994     20.9      -0.1
Field peas    3 018   2 116   2 981    -29.9      40.9
Flaxseed        423     368     547    -12.9      48.4

Canola

StatsCan pegged Canadian canola output at a record high 15.2 million tonnes, surpassing the record of 14.0 million tonnes set last year. However, this number came in below trade expectations. Anecdotal conversations with growers suggest the final tally may yet be reduced further given initial harvest results just now starting to come in -- and are deemed a disappointment.

A combination of above-average temperatures, dryness in some areas, excess moisture in other areas, above-average hail damage, disease and a few incidents of insect problems through the summer have all combined to take the edge off an otherwise bumper canola crop. Heat in July is likely to push oil yields one to two per cent lower than recent years for canola grown in Saskatchewan and Manitoba.

While Western Canada's crops have avoided the droughts of the U.S. Midwest, Russia and Eastern Canada, crop diseases like aster yellows and sclerotinia have whittled down the potential for canola.

Wheat

Total Canadian wheat production on the Prairies is expected to reach 27.0 million tonnes in 2012, up seven per cent from 2011-12 to the highest level in four years. But this increase was generally anticipated with a big spring wheat crop of 19.1 million tonnes, though durum was a little smaller than expected at 4.3 million tonnes.

Traders will likely perceive crop size to increase as cereals are the best crop out there this year. Cash basis and carry-in deferred futures positions will moderate grain flow, a task previously moderated by the CWB.

Oats/Barley

Farmers are on track to harvest 3.0 million tonnes of oats this year. Oat supply will likely be sufficient to satisfy North American milling interests for the year ahead without wild independently driven price gyration. The oat market will remain a price trend follower of larger cereal markets, notably corn/wheat, but in sluggish fashion.

On barley, according to StatsCan there is a much bigger Canadian barley crop on tap than expected. Canadian barley production for 2012 was estimated in last week’s production report at 9.5 million tonnes. That’s up nearly 24 per cent from last year’s nationwide barley crop of 7.8 million tonnes, and easily exceeded pre-report trade expectations of 8.5 million to 9.0 million tonnes.

The big barley crop can be attributed to a record high average yield forecast of 64.7 bushels an acre, and an expected 17 per cent increase in harvested area to 6.3 million acres compared to last year. If accurate, this year’s barley yield would snap the previous record of 63.3 bushels an acre set in 2008.

That said, I don’t believe the feed barley market is going to fall steeply. If this year’s wheat production can maintain quality and remain priced as a "food" grain this year, a larger barley supply will be required for the coming year’s overall Prairie feed ration. The past two years we have seen a lot of wheat enter the feed ration. That might not be the case this year.

Others

547,000 tonnes makes for a very small flax crop again this year, but near expectations coming into the report. More grind along for the flax market in the shadows of canola, which in turn is in shadow of soybeans, lagging due to a relatively abundant world vegetable oil supply.

Field pea expectations are at 3.0 million tonnes -- again, no surprise. However, supply situation is seen tightening this year. Once the "easy off the combine supply" is bought, and trade has to go to the bin for more, Vancouver and elevator prices should start the next leg up, but in deferred delivery positions.

Lentils are expected to come in at 1.3 million tonnes in Saskatchewan. Also near trade expectations, but a touch on the smaller side, though still offset by big old crop carry-in. The issue still is about timing of demand. We must remember many buyers are showing caution (smaller lines of credit and currency, for example). Nothing changes here regarding market outlook relative to former conviction. Demand comes in waves, but building to a strong base in time.

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.