What's behind pulses' shift to bulk exports?

SERVING WESTERN CANADIAN FARM FAMILIES SINCE 1923 | W W W . P R O D U C E R . C O M

THURSDAY, JULY 7, 2016 VOL. 94 | NO. 27 | $4.25

Return undeliverable Canadian addresses to: Box 2500, Stn. Main,

Saskatoon, SK. S7K 2C4

JULY 7, 2016

The

Wes

tern

Pro

duce

r is

publ

ishe

d in

Sas

kato

on b

y W

este

rn P

rodu

cer P

ublic

atio

ns,

whi

ch is

ow

ned

by G

VIC

Com

mun

icat

ions

Cor

p. P

ublis

her:

Shau

n Je

ssom

eP

ublic

atio

ns M

ail A

gree

men

t No.

400

6924

0

u|xhHEEJBy00001pzYv-:=

WORKING SAFELY IN BEAR COUNTRY P31

BY SEAN PRATTSASKATOON NEWSROOM

Bulk is king when it comes to ocean freight, says a grain trans-portation expert.

Bulk shipping rates are at histori-c a l l y l o w l e v e l s , s a i d M a r k Hemmes, president of Quorum Corp., the government appointed grain monitor.

Panamax vessels are renting out for $4,000 to $4,500 per day com-pared to more than $90,000 during the heyday of 2007 and 2008, when China was importing vast quanti-ties of steel.

Rates began to plummet follow-ing the 2008 global economic melt-down, falling as low as $2,500 to $2,800 per day last winter as ships ordered to be built during the peak shipping period continue to hit the high seas.

Anybody who is alive today has never seen bulk ocean rates this low, Hemmes said.

Container shipping rates have also dropped but not by the same magnitude as bulk.

Hemmes said that is because container companies such as A.P. Moller-Maersk, Orient Overseas C o nt a i n e r L i n e ( O O C L ) a n d Hapag-Lloyd are mammoth cor-porations that own hundreds of vessels.

They can afford to idle a portion of their fleet, anchoring the ships in a safe port with a skeleton crew.

They can afford to manage capacity, he said.

The supply and demand rela-tionship isnt as severe as it is with a bulk vessel.

Bulk vessel companies are small by comparison. The big ones may own a dozen ships.

I wouldnt put them in the cate-gory of mom and pop because a Panamax vessel costs about $80 million, but theyre not in the same league as, say OOCL or Maersk, or somebody like that, said Hemmes.

EXPORTS

Whats behind pulses shift to bulk exports?Bulk shipping rates drop to historic lows

A container ship was anchored recently at the Mersin International Port in Mersin Turkey. A new berth is set to open later this year. It will increase the ports capacity to 2.6 million 20-foot-equivalent units (TEU) from 1.8 million TEU, making Mersin the biggest container port in Turkey. The new berth will be able to accommodate the worlds largest container ships, which have an 18,000 TEU capacity. | SEAN PRATT PHOTO

CAN ORGANICS FEED THE WORLD? ENVIRONMENTAL GROUPS SAY YES BUT REPORT HAS DETRACTORS | PAGE 3

The Europe problem Glyphosate approval

received an 11th hour extension in the European Union, but trouble is still

brewing. | Page 15

Beef border: Mexico agrees to accept

beef from Canadian cattle older than 30 months. | Page 13

BY BRIAN CROSSSASKATOON NEWSROOM

Governments should regulate the abandonment and demolition of prairie grain elevators similar to how they regulate rail line abandon-ment and removal, says the head of a community group trying to save an elevator in Raymore, Sask.

Terry Fazakas says governments should require grain companies to offer mothballed elevators and other grainhandling assets for sale to interested parties before demol-

ishing them.Raymores concrete elevator is

slated for demolition. Fazakas has approached the ele-

vators owner, Cargill Canada, with an offer to buy, but Cargill officials said last week the facility is not for sale and it will be demolished.

It should be just like rail-line abandonment, said Fazakas.

If they dont want to operate it, thats fine but what is the reason that they dont want to sell it? Is it competition?

Fazakas has been leading local

efforts to buy the elevator but so far, his efforts have hit a stonewall.

When Fazakas initially expressed an interest, Cargill told him he would need to submit a business plan and a formal proposal. Since then, he has been told that Cargill is not interested in selling.

The elevator sits on leased land owned by Canadian National Rail-way.

CN has also indicated that it is not interested in selling the land.

TRANSPORTATION

Branch-line abandonment rules urged for elevators

SEE ABANDONMENT RULES, PAGE 5 SEE BULK EXPORTS, PAGE 4

COLUMNISTS DARCE MCMILLAN: Hopes for another weather rally in crop prices are evaporating. 8

KELSEY JOHNSON: Small-town Ontario tries to convince young people to stay. 10

KEVIN HURSH: Its the year of the lentil as crop acres explode on the Prairies. 11

ROBIN BOOKER: More public research is needed on yield boosting crop products. 11

JACKLIN ANDREWS: A couple struggles to get along in the garden. 18

CLARE ROWSON: Stretching exercises might help piriformis syndrome. 20

BETTY ANN DEOBALD: Here are pulse recipes from soup to fudge. 20

ARLENE & RON KARPAN: Take care of your health when travelling abroad. 21

LORNA MCILROY: There are plenty of roses for the prairie gardener to consider. 21

BRUCE DYCK: Initial payments were expected to fall sharply in 1991. 30

ROY LEWIS: Drug choices are becoming critical in livestock medicine. 34

REGULAR FEATURESAg Stock Prices 68Classifieds 39Ag Notes 34Livestock Report 9Market Charts 70Opinion 10Open Forum 12On The Farm 19Weather 71

CONTACTSSubscriptions & MarketingPh: 800-667-6929

AdvertisingPh: 800-667-7770

Newsroom inquiries: 306-665-3544 Newsroom fax: 306-934-2401

Shaun Jessome, PublisherPh: [email protected]

Brian MacLeod, EditorPh: [email protected]

Michael Raine, Managing EditorPh: [email protected]

Bruce Dyck, Interim News EditorPh: [email protected]

LOST SEED: Bad combining can cost farmers big time in lost seed. 25

TILLAGE KIT: A kit converts a chisel plow into a vertical tillage implement. 28

PRODUCTION 25

DELIVERING ORGANICS: A need for organic food leads to a delivery service. 68

PAYMENT PROTECTION: A credit insurance program provides payment protection. 68

AGFINANCE 68

BEAR SMART: Producers can take steps to successfully work in bear country. 31

MORE LAMENESS: Temple Grandin says lameness is a growing cattle problem. 32

LIVESTOCK 31

LOTS OF LENTILS: Farmers are estimated to have planted 5.8 million acres of lentils. 6

CORN ESTIMATE: A recent U.S. corn estimate surprised analysts. 7

MARKETS 6

PEN-PAL REUNION: An Alberta woman finally meets her pen-pal. 18

ON THE FARM: Community service is important on this Alberta farm. 19

FARM LIVING 17

Walk a Mile in Her Shoes: Residents of a small town recently raised money for domestic abuse victims. See page 17. | KAREN MORRISON PHOTO

NEWS WHEAT STREAK MOSAIC: Few control options are available for this wheat disease. 5

BEEF ACCESS: Mexico agrees to start accepting beef from Canadian cattle older than 30 months. 13

GLYPHOSATE RELIEF: Europe has extended approval for glyphosate, but trouble continues to brew. 16

RESEARCH FARM: Richardson plans to build a new research farm in Saskatchewan. 29

WHATS IN THIS ISSUE

JULY 7, 2016 | WWW.PRODUCER.COM | THE WESTERN PRODUCER2 NEWS

Visit us at www.producer.com or chat with us on social media. Wed love to hear from you.

FEATURES

NUTRITION POLLYield pays the bills for farmers, not nutrition. Would you be willing to pay more for your food if seed companies made grains and oilseeds with improved nutrition?

BEAR SAFETY VIDEOWP reporter Barb Glen shot some video at a recent southern Alberta bear safety workshop designed to minimize grizzly-human conflict.

WALK A MILE IN HER SHOESCheck out our video of a group of men in Consort, Alta., walking a one-mile course in high heels to raise awareness of violence against women.

VIDEOS

PLUS: Check out the winning entries in our #plant16 photo contest at www.producer.com/plant16/.

DIY TILLAGE KITRobin Booker looks at how an old chisel plow can be converted to a vertical tillage unit.

MARKETS WRAPWP Markets editor DArce McMillan looks at the weeks top developments in crop markets.

WHATS HAPPENING PRODUCER.COM

HARVEST AT FULL SPEED WITH 7400 Series GrainMaxxTELESCOPIC SWING AWAY GRAIN AUGER

With a capacity of 235 bushels per minute, drive into the yard, unload, and be on your way back to the field in less than 12 minutes.

1.800.667.8800 | grainmaxx.com

NEWS THE WESTERN PRODUCER | WWW.PRODUCER.COM | JULY 7, 2016 3


Supporters of organic agriculture say they would have no problem feeding the world.

Kendra Klein, staff scientist with Friends of the Earth, said the deep-ly entrenched narrative that organ-ics is incapable of feeding a grow-ing population is false.

It is also the conclusion of a new report released by the organization called Farming for the Future: Organic and Agroecological Solu-tions to Feed the World.

We now know that organic farm-ing can yield enough to feed the world, she said during a confer-ence call promoting the report.

Frances Moore Lappe, director of the Small Planet Institute, disputes the notion that industrial agricul-ture is the saviour of the planet and the only way to feed a growing population.

She said there would be an abun-dance of food if people ended their obsession with eating animals.

Three-quarters of the worlds agricultural land, including pas-tures, is devoted to producing ani-mal protein, which only delivers 17 percent of global calories.

Half of the worlds calories from crops dont go to people directly, said Lappe.

She said that out of every 100 cal-ories cattle consume in feed, humans get three back from eating the beef.

Cattle are the best calorie shrink-ers, said Lappe.

She said the problem isnt food scarcity but rather a scarcity of democracy. Government policies favour meat production, which only the rich can afford.

Tom Lynch-Staunton, issues manager for the Canadian Cattle-

mens Associat ion, disputes Lappes findings.

Her argument that all this land can be used for human food as opposed to going to cattle is just not true, he said.

In Canada, 80 percent of what a cow eats in its lifetime is forage grown on marginal land not suit-able for annual crops, and less than 10 percent of cropland is used for feed crops. Almost all of the crops that are grown every year are grown for human consumption.

Its when they dont make the grade that theyre diverted into cattle feed, he said.

Lynch-Staunton also pointed out that the conversion rate isnt nearly as abysmal as Lappe suggests.

It takes six kilograms of feed in a

feedlot to produce one kilogram of beef. And that beef is rich in pro-tein, iron, zinc and vitamin B, so its more nutritious than an equivalent amount of crops.

Lauren Ponisio, a conservation biologist from the University of California, Berkeley, said a meta-analysis of 115 studies conducted over the last 35 years shows that conventional agriculture out-yields organic agriculture by an average of 19 percent.

However, the gap is reduced to six to nine percent when comparing the results of organic farms that practice diversification, such as growing a wide variety of crops in the same field and using rotations that include cover crops.

John Reganold, professor of soil science and agroecology at Wash-ington State University, said there are considerations beyond yield when determining the value of organic agriculture.

He has reviewed 17 meta-analyses comparing the nutritional value of eating organic versus conventional food, 14 of which found some evi-dence that organic is more nutri-tious.

It contains little to no pesticide residue compared to conventional and is higher in vitamin C, antioxi-dants and omega 3 fatty acids.

If you look at the quality of food, organic is better, he said.

Reganold said organic farming is also better for the soil, results in less contamination of ground and sur-face water and is more profitable, according to another meta-analy-

sis of 44 studies.The profitability analysis shows

that organic farming delivers 22 to 35 percent more net returns to farmers than conventional agricul-ture because of price premiums that average 29 to 32 percent higher than conventional prices.

Organic agriculture now occu-pies about one percent of the crop-land worldwide. Why cant that be 10 or 15 percent by 2050, said Reg-anold.

Te d M e n z i e s , p r e s i d e n t o f CropLife Canada, is tired of all the finger pointing.

I dont like trying to pit one meth-od of agriculture against the other.

Menzies said many of the attacks against conventional agriculture are unfounded, including the accusations that it is bad for the environment.

Biotechnology has paved the way for conservation tillage techniques that have reduced greenhouse gas emissions by 29 million tonnes a year in Canada and reduced diesel fuel use by up to 194 million litres per year.

Canadian farmers would need to plant 35 million more acres per year to generate the same produc-tivity as today if it werent for pesti-cides and genetically modified crops, said Menzies.

He said the record corn harvest in the United States is 532 bushels per acre.

I dont think that came from organic agriculture, said Menzies.

He also said the organic commu-nity should be careful about claim-ing it has little to no pesticide resi-due.

The U.S. Department of Agricul-tures Pesticide Data Program detected pesticide residues on 21 percent of the organic food sam-ples it tested in 2014, albeit at levels where it was not a safety concern.

Forty of the 41 synthetic pesti-cides it detected were not approved for use on organic food.

Our member companies make many, many pesticides for the organic industry, so to suggest there is no pesticides used in organic production is a complete fallacy, said Menzies.

He also cast doubt on the asser-tion that organic farmers are mak-ing far more money than their conventional counterparts.

Thats quite a claim. Im not sure where they get their facts from.

[email protected]

The sound of country music and the scent of sage drift on the prairie evening breeze while Tim and Christina Christinson dance the two-step under a full moon. The couple were part of a recent trail ride in Grasslands National Park in southwestern Saskatchewan. See page 67 for more photos. | WILLIAM DEKAY PHOTO

FOOD SECURITY

Organics can feed the world: reportCanadian Cattlemens Association takes aim at Friends of the Earth for claims that cattle production wastes farmland

DANCING UNDER THE MIDNIGHT SUN

Her argument that all this land can be used for human food as

opposed to going to cattle is just not true. Its when (crops) dont

make the grade that theyre diverted into cattle feed.

TOM LYNCH-STAUNTONCANADIAN CATTLEMENS ASSOCIATION

Half of the worlds calories from crops dont go to people directly. Cattle are the best calorie shrinkers.

FRANCES MOORE LAPPESMALL PLANET INSTITUTE

Without the use of pesticides and genetically modified crops, farmers

would need to plant 35 million more acres for the same productivity, says CropLife Canada official

BY ROBERT ARNASONBRANDON BUREAU

Saudi Arabia and Myanmar have little in common, except that Canadian companies are import-ing honey from both of those countries.

Myanmar exported $388,000 w o r t h o f h o n e y t o C a n a d a between Jan. 1 and the end of March, while $238,000 worth of honey came from Saudi Arabia, according to federal government statistics.

In comparison, Canada import-ed $1.1 million in honey from the United States during that same period.

The import data is making Canadian beekeepers suspicious because Saudi Arabia is one of the worlds larger importers of hon-ey, and Myanmar is a tiny player in the global honey industry.

What weve seen is, in the latest import stats, is that countries that are unusual, have unusually high imports into Canada, said Rod Scarlett, executive director of the Canadian Honey Council.

Its countries that really dont produce a lot of honey.

In addition to Saudi Arabia and Myanmar, honey came into Can-ada from places like Zambia and Moldova between Jan. 1 and March 31.

Canadian beekeepers are con-c e r n e d a b o u t t h e i m p o r t s because honey prices have plum-

meted over the last year. Bulk honey was $2.20 to $2.30 per pound last spring. It now is selling for approximately $1.30 per lb.

Its possible, but difficult to prove, that the honey from these unusual countries originated in China, the largest producer of honey in the world.

China has a reputation for poor quality honey loaded with con-taminants, as well as for produc-ing fake honey from corn syrup and shipping its honey through third party countries to reach desirable export markets, thus avoiding a Made in China label on the product.

A review of Thailands honey trade over the past 10 years reveals a correlation between sharp increases in export and increases of imports of honey from China and its surrogates, Ron Phipps, a global honey expert, said in his recent honey market report for the American

Honey Producers Association. Both Thailand and Ukraine,

the number of hives and level of beekeeping activity does not jus-tify the quantity of honey exported.

Scarlett said the imported hon-ey, which could be corn syrup blended with honey, steals mar-ket share from domestic honey and drives down prices for Cana-dian beekeepers.

It (imported honey) can be at least 50 cents a lb. lower, he said, adding that honey is part of a broader trend where phony food, such as fake olive oil, is becoming more common.

Scarlett said the Canadian Food Inspection Agency may need to shift its priorities and focus more on fake food.

So that they do look at food fraud and consumer protection.

The North American honey industry is fighting back against importers that buy honey from questionable countries and bro-kers. A consortium of companies, including Bee Maid Honey in Canada, has developed a label-ling initiative called True Source Honey. The group is committed to buying authentic honey from known beekeepers and brokers. The initiative has a voluntary traceability program with third party auditing.

[email protected]


They cant afford to idle capacity, which is why the oversupply situa-tion is worse on the bulk side.

The rock bottom ocean freight rates have been a financial boon for all shippers.

The grain industry has had a three year-plus run of really, really cheap ocean freight and a lot of that time was during a period when c o m m o d i t y p r i c e s w e re ju s t through the roof, so everybody was making tons of dough, he said.

Containerized grain movement became popular during the era of $90,000 per day bulk shipping rates, and many grain companies have stuck with that mode of transporta-tion because of its advantages.

Lots of customers in overseas markets dont want or cant handle 10,000 tonnes of grain. Some buy-ers in Asia Pacific use the contain-ers for storage while they slowly consume the contents.

You kind of get a free shed for a couple of months, said Hemmes.

However, there are also draw-backs to shipping commodities by container.

The main one is finding empty containers. Grain is primarily shipped in 20-foot containers and they can be elusive.

Another problem is that a 20-foot container loaded with grain is heavy. Ships were built to move 10 to 11 tonnes of commodity per con-tainer. A container loaded with grain weighs 23 to 25 tonnes.

That means a full container has to be balanced off with an empty con-tainer as a form of ballast. The full ones generally sit on the bottom of the pile.

You cant load a vessel full of grain containers because other-wise it would sink, he said.

Hemmes said there will always be a market for containers, but bulk is definitely on the rise.

For instance, Canadian pea and lentil shipments loaded onto bulk vessels through the end of the third quarter of 2015-16 totalled 2.52 million tonnes compared to 2.17 million tonnes during the same period last year and 1.54 million tonnes the year before that.

Hemmes does not track container shipments by commodity, but he is pretty confident they are down for pulses because overall grain ship-ments by container are down.

Part of the reason more pulses are moving in bulk is that there is increased participation in that industry by the major grain compa-nies and they are more familiar with bulk movement.

When you see companies like Viterra and Richardson really get-ting heavy into peas and lentils, you got to know that theyre going to look to arbitrage freight as best they can, he said.

[email protected]

CONTINUED FROM PAGE 1

BULK EXPORTS

Charlie Flowers waits in his forage harvester while the machines header is cleared before he continues cutting haylage

west of High River, Alta., July 1. The final product will be transported to the Diamond V feedlot located nearby. | MIKE STURK PHOTO

2.52MILLION TONNES

OF CANADIAN PEAS AND LENTILS WERE LOADED INTO BULK

VESSELS IN THE FIRST NINE MONTHS

OF 2015-16

WAITING FOR THE ALL-CLEAR |

ITS A FACT The number of beehives

around the world has increased by eight percent in the past 10 years, but the volume of honey exported internationally has increased 61 percent.

Source: International Honey Market report

HONEY

Are Canadians paying for fake imported honey?Beekeepers concerned impure honey imports lower world prices


In a last minute effort to save the elevator, Fazakas has contacted three First Nations groups, who have agreed to support efforts to save the building.

Chiefs from Kawacatoose, Mus-kowekwan and Daystar First Nations have come on board to support efforts to save the facility, which Fazakas says could be used to create new jobs, attract new investment and support the local economy.

Were just trying to get every-body to the table CN, Cargill, the Town (of Raymore) and the First Nations, Fazakas said.

We need to get everyone togeth-er and figure out what the major roadblocks are and see if we can figure out a deal.

I dont understand why theyre so adamant about tearing it down, Fazakas said.

If youre not going to use it and it still has a lifespan, why wouldnt you want to see the town carry on and put it to use?

Local supporters say they are prepared to sign a non-competi-tion clause to ensure that a repur-posed facility would not compete directly with Cargills core busi-ness.

Last week, Cargill officials who were in Davidson, Sask., said the c o m p a n y s p o s i t i o n ha s n o t changed.

The elevator is not feasible to operate and the facility is not for sale.

Cargill is still committed to main-taining other operations in Ray-more, added Jeff Wildeman, Car-gills regional manager in Sas-katchewan.

Cargill also has a fertilizer shed and operates an ag retail business in Raymore.

Were absolutely committed to our Raymore business, Wildeman said.

Fazakas said provincial Agricul-ture Minister Lyle Stewart has indi-cated that the province is not inclined to get involved in private-sector business decisions.

[email protected]

CONTINUED FROM PAGE 1

ABANDONMENT RULES NEEDED

I dont understand why theyre so adamant about tearing it down. If youre not going to use it and it still has a lifespan, why wouldnt you want to see the town carry on and put it to use?

TERRY FAZAKASRAYMORE COMMUNITY GROUP

Whats your take? Tell us your reaction to this story at www.producer.com or on our Facebook page. Or send us a tweet with our tag @westernproducer.

BY BARB GLENLETHBRIDGE BUREAU

Wheat streak mosaic virus has appeared in southern Alberta winter wheat crops, with poten-tial to infect spring wheat.

Spread by the wheat curl mite, the virus initially appears as light green or yellow streaks running parallel to leaf veins, and can limit production, depending on severity.

Weve confirmed it in probably a dozen fields and weve heard that people have seen symptoms of it, or what looks like it, in doz-ens more. And in a few of the fields, its severe, so its definitely around, said Alberta Agriculture crop pathologist Mike Harding.

We had maybe a dozen or so fields last year that were confirmed to have wheat streak mosaic but weve got many, many more than that this year. It has really kind of had a break-out year.

There are no in-crop treatments available for wheat streak mosaic virus and no effective insecticide treatment for wheat curl mites. The tiny mites cant be seen with-out the aid of a hand lens or microscope and are able to hide

and avoid chemical treatments.Harding said some Alberta

farmers who identified the virus early were able to disc down their wheat crops and plant early sea-son canola, which is not a host to the virus.

However, that is not an option at this point in the season.

If the wheat crop is to be grown for grain and you discover that you have a very severe case of wheat streak mosaic, you could take it off as green feed or silage, so then you could still get some-thing for it rather than run the risk of losing the grain crop to the virus, Harding said.

Other than those options, the remaining strategy is to remove any green plant tissue so the mites dont survive to carry the virus into next year.

For that reason, farmers may want to delay planting winter wheat this fall.

Neither the virus nor the vector would normally survive our win-ters unless they have a green bridge, said Harding, so the best chance for us to manage this would be in the fall, where we avoid seeding winter wheat early, adjacent to wheat fields that are

infected with wheat streak mosa-ic. And also making sure that we control volunteers in fields that had wheat streak mosaic.

Wheat curl mites do not have wings, so they rely on wind to travel to new feeding areas. They can multiply rapidly in hot, dry weather but dry out quickly when not protected by host plants.

Wheat streak mosaic virus is already causing severe crop loss in Montana and North Dakota.

Mary Burrows, a plant patholo-gist at Montana State University, said she has seen 100 percent winter wheat crop loss in some fields this year and estimates 55 to 85 percent yield loss in spring wheat crops in some parts of the state.

Some guys are haying the fields and then spraying glyphosate to control any green material, said Burrows.

She noted cheat grass and downy brome are also hosts for the mite and the virus, so weed control is an important weapon.

Burrows is telling Montana farmers to delay winter wheat planting this fall until Oct. 1. They would normally plant in early September but they should

instead take time to eliminate potential mite and virus hosts.

Conditions last year combined to create ideal conditions for an outbreak this year in Montana, Burrows said.

We had widespread hail last fall in about three or four counties in the primary winter wheat production area, and then fol-lowed by low wheat prices, caus-ing guys not to apply Roundup to control their green bridge.

And then a mild fall, early planting because of timely mois-ture and an open winter, which basically made a big, old mess.

Burrows and Harding recom-mend crop testing to properly identify the virus because it shares early symptoms with some other crop problems.

It is sometimes confused with stripe rust but the latter produces orange pustules.

Harding said stripe rust has been reported in southern Alber-ta this year but so far it is limited.

That s good news but i t s important to still be on the look-out for that disease because it can be quite explosive.

[email protected]

AGRONOMY

Wheat streak mosaic virus discovery raises alarms for Alberta growersSouthern Alberta producers urged to test fields and act quickly if virus discovered in crops

Ryan Niwa repairs a MacDon 972 draper header for a customer at Rocky Mountain Equipment in Oyen, Alta., June 23. | KAREN MORRISON PHOTO

IN FOR A QUICK FIX

JULY 7, 2016 | WWW.PRODUCER.COM | THE WESTERN PRODUCER6

MARKETS EDITOR : D A R C E M C M I L L A N | Ph: 306-665-3519 F : 306-934-2401 | E - M A I L : [email protected] | T W I T T E R : @ D A R C E M C M I L L A N

MARKETS

SEEDING INTENTIONS

An awful lot of lentils may be coming Statistics Canadas estimate for 5.8 million acres could mean excess supply and lower prices


There were only a couple of sur-prises in Statistics Canadas June seeding intentions report but one was a doozy.

What jumped out to me the most was the lentils, said Derek Squair, president of Agri-Trend Marketing.

Statistics Canada estimates a record-shattering 5.8 million acres of lentils, which is 48 percent high-er than last year and double the previous five-year average.

That caught the attention of many market analysts, including Chuck Penner of LeftField Commodity Research.

That many acres and really good (weather) conditions, thats really setting up for a bit of a scary(price) downturn if it dries out now in July, he said. Lentils could used drier weather to avoid disease problems.

Most of the acreage increase is in red lentils, which account for 4.3 million acres or 74 percent of the lentil crop, followed by large green at 20 percent and small green at five percent, with the remainder in the other category.

Penner said green lentil demand tends to be static, but exporters are a b l e t o e n c o u ra g e re d l e nt i l demand by lowering prices.

He believes red lentil prices would have to fall to the low-to-mid 20 cents per pound range to stimu-late the additional demand to mop up the anticipated excess supply.

If prices remain above 30 cents

per pound, there will be abundant carryout.

Jon Driedger, senior market ana-lyst with FarmLink Marketing Solu-tions, said the lentil number piqued his interest.

Assuming the yields are there and if the quality holds up, oh boy, thats an awful lot of lentils, he said.

Driedger said more green lentils are going in the ground, but its not an overwhelming amount and they are grown in some of the wettest areas of Saskatchewan, so that could reduce yield and quality.

He believes the gap between red and green lentil prices is going to continue to widen.

Could you see (red lentil) prices potentially trade into the lower 20s and below? I wouldnt rule it out, he said.

A lot depends on demand. If India has another short crop then that could be enough to keep prices from sliding.

Squair said the other surprise in the report was flax acres. Statistics Cana-da forecasts 925,000 acres, down from 1.6 million acres last year.

The flax seems really low, he said.Driedger agreed that its a small

number for flax. FarmLink was fore-casting 1.1 million acres and that was at the low end of trade esti-mates.

A sizable carryout from the 2015-16 crop should prevent a flax price rally in the short-term, but there is poten-tial for a winter or spring rally if the estimate proves accurate.

Squair said the canola number is

bullish. Statistics Canada estimates 19.3 million acres, which is slightly smaller than last years crop.

He believes that is not burdensome given that export and domestic demand was more than 18 million tonnes this crop year.

I thought the canola number was very constructive, he said.

We need big acreage and big yield numbers to keep up with the demand.

Analysts were not surprised by the wheat number of 23.2 million acres, which is down one million acres from last year. That includes 6.1 mil-lion acres of durum, which is up from 5.82 million acres last year.

Penner is not concerned about the 4.3 million acre pea crop, which is up from last years 3.7 million acres. Pea demand is expected to be strong.

Im not worried about the pea market much at all, he said.

Yellow peas account for 83 percent of the acres, green peas 16 percent and the remainder devoted to other pea types.

Green pea acres are down com-pared to last year, which will be sup-portive to green pea prices.

Penner said the barley and oats markets could get a little tight consid-ering both crops have been down-sized.

The canaryseed number of 260,000 acres did not surprise Squair. It was down from 325,000 acres last year because prices and demand for the crop have been lackluster.

And he agreed with the mustard estimate of 525,000 acres, up from

If the weather co-operates, prairie farmers could harvest a massive lentil crop that could depress prices. | FILE PHOTO

2016 CANADIAN SEEDED ACRESCanadian farmers said they seeded more lentils than what the trade expect-ed. Flax acreage was smaller than expected. Summerfallow fell below two million acres for the first time ever.Canadian seeded area (000 acres): June pre report StatsCan final StatsCan estimate** April 2015-16Total wheat * 23,177 22,8-23,8 23,846 24.111 Spring wheat 15,449 -- 16,044 17,013 Durum 6,100 5,9-6,3 6,120 5,820Barley 6,385 6,5-6,9 6,777 6,527Canola 20,020 19,3-21,0 19,345 20,095Flax 925 1,1-1,5 1,115 1,640Corn 3,330 -- -- 3,275Oats 2,861 2,4-3,0 2,972 3,337Peas 4,274 4,3-5,0 4,280 3,680Lentils 5.840 5,2-6,0 5,140 3,950Canaryseed 260 -- 300 325Chickpeas 160 -- 100 115Dry beans 287 -- 230 260Fall rye 329 -- 337 259Mustard 525 -- 430 345Sunflower 70 -- 80 100Summerfallow 1,985 -- 2,160 2,560

* Spring, winter and durum ** Commodity News Service trade survey

Source: Statistics Canada, Commodity News Service | WP GRAPHIC

345,000 acres last year. Mustard has been delivering good returns to growers.

Squair had no problem with the chickpea estimate of 160,000 acres but thought the bean estimate of 287,000 acres was too low.

All of the analysts said the acreage

report will have little impact on pric-es compared to weather and crop yields from here on.

So far the crop is looking very good with the exception of some pockets where it is too wet.

[email protected]

www.secan.com

Genes that fit your farm.

Visit us July 19-21

Genes that fit your farm.

Visit us July 19-21Genes that fit your farm is a registered trademark of SeCan.

grain

binGrain beetles thrive in empty bins and even migrate from bin to bin looking for sources of food and moisture. Stored grain infestations often occur because these insects are waiting in the empty bins. Before filling, treat your empty bins with Protect-It and eliminate the threat of infestation that is lurking.

Whats lurking in your empty

1-888-476-4473 www.hedleytech.comAsk for Protect-It at your crop inputs retailer today!

?

MARKETS THE WESTERN PRODUCER | WWW.PRODUCER.COM | JULY 7, 2016 7


Farmers in the United States found an extra 3.3 million acres of corn, soybeans and wheat to put in the ground between the March and June planting intentions reports.

The number in the U.S. Depart-ment of Agriculture seeded acre-age report June 30 that caught ana-lysts by surprise was the estimate for 94.1 million acres of corn, which was 1.3 million more than the aver-age trade estimate.

It was above the high end of the trade guesses, said Arlan Suder-man, chief commodities econo-mist with INTL FCStone.

The trade was looking for a decrease in area.

Favourable weather and high prices during the planting window spurred more corn acres. Most of the increase came from areas where there was rapid planting progress, such as Minnesota and the western half of the Midwest.

Some of the newly found acres are in places where wet weather prevented planting last year.

The acreage report knocked down corn prices, as did the USDAs quarterly stocks report, which found corn stocks were 194 million bushels more than the trade had expected.

The big corn acres and stocks gave corn users more confidence that supply will be adequate.

Wed have to have more adverse weather to tighten the balance sheet than previously expected, said Suderman.

U.S. CROP ACRES

More corn acres, large carryover hurts priceAdditional corn area will give users more confidence in getting adequate supply even if hot weather arrives

scare. He said corn could follow soybeans higher temporarily if that happens.

Once the scare is over, wheat will probably be the anchor that pulls corn back down, he said.

It doesnt help that farmers in South America and Ukraine are planning big crops.

The soybean-corn price ratio is

about 3:1, which is well above where it usually resides.

I do think that we will have an unusually high ratio between soy-beans and corn until (the market is) comfortable that soybean sup-plies are going to be adequate, he said.

[email protected]

ARLAN SUDERMANINTL FCSTONE

2016 U.S. SEEDED ACRESAmerican farmers surprised the market by seeding more corn than expected. Soybean acres were within the range of analysts expectations but spring wheat and durum acreage were also higher than expected.U.S. seeded area (million acres): June 1 avg. analysts* USDA March 1 final 2015Corn 94.148 92.896 93.601 87.999Soybeans 83.688 83.834 82.236 82.650All wheat 50.816 49.869 49.599 54.644 Winter wheat 36.538 36.384 36.216 39.461 Spring wheat 12.133 11.714 11.348 13.247 Durum 2.145 1.975 1.995 1.936*Reuters pollSource: USDA | WP GRAPHIC

Rich Nelson, chief strategist with Allendale Inc., said it doesnt bode well for the hope of a corn price rally sparked by adverse weather.

This does help dull some of the potential upside for corn if we do get a weather rally going here, he said.

Nelson is a little skeptical of the stocks number because it suggests feed use of corn fell 17 percent in the third quarter of the 2015-16 crop year compared to the same period a year ago.

That compares to a two percent decline in the first quarter and a one percent increase in the second quarter.

The USDA is implying that somehow we had a drastic drop in feed usage this past quarter, he said.

Nelson said the report changed no ones mind about a fairly tight soybean supply-demand situation.

The USDA report, based on farmer surveys, pegged soybean area at 83.7 million acres, which was slightly below what the trade was expecting but within the range of estimates of 82.1 to 85.7 million.

Suderman said it wasnt much below what the trade expected, but the whisper number in the trade was higher than the official num-ber.

The soybean acres increased (from last year), but they didnt increase enough, he said.

Soybean stocks were 40 million

bushels higher than what the trade thought, but that didnt stop prices from rallying. The August contract finished the day up 351/4 cents a bushel, while the November con-tract was up 42 cents.

The USDA pegged all wheat plantings at 50.8 million acres, which was above the trade expecta-tion of 49.9 million acres. Stocks were about what the trade had predicted.

Suderman said there will be a big increase in the wheat production estimate in the July 12 USDA monthly supply and demand report.

Nelson said the big U.S. wheat number combined with a large Russian crop means no price rally is on the horizon.

We really dont see much upside for the next couple of months, he said.

U.S. crops are looking great. Nel-son is forecasting a minimum aver-age corn yield of 165 bu. per acre and a soybean average corn yield of at least 45 bu. per acre.

However, a heat wave is in the forecast for the U.S. Midwest, which would arrive at the time of pollination and pod set. This heat would support prices, but there is also rain in the forecast.

The only thing thats keeping this market from being a really big bullish market for corn is the lack of dryness, said Nelson.

Suderman said soybean prices could take off if there is a weather

165 bushels per acre

ANALYST SAYS CORN CROPS IN THE U.S. MIDWEST ARE LOOKING GOOD AND PREDICTS AN AVERAGE

BATCO CONVEYORS. BELT TO LAST.

With Batco you can count on quality built equipment that is easy to maintain and will be reliable through your toughest seasons. Batco has an extensive line of products to suit your application including; drive over pits, low profile field loaders and long swing away conveyors.

877.667.7421batcomfg.com

to maintain t i li

LT TO LAST

JULY 7, 2016 | WWW.PRODUCER.COM | THE WESTERN PRODUCER8 MARKETS

Hopes for another weather rally in crop prices this summer declined as Amer-ican farmers have seeded more corn and wheat than was expected.

ADEQUATE SUPPLY

Rally prospects fade in wake of good weather, expanded acres year so they get special attention. Iowa was the biggest at 18 percent, followed by Illinois at 14 percent, Nebraska at 12 percent and Min-nesota at 11 percent.

It has been dry in a good part of Iowa, Illinois and areas of Minne-sota in the past month or so, but so far that has not hurt the weekly crop condition ratings for corn, which are better than last year at this time.

Heavy rain fell in Kansas, Mis-souri and southern Illinois on the July holiday weekend, but the storms tracked just south of Iowa and the state remained mostly dry.

The Chicago market was closed for July 4 when this column was written but I expect that once trade resumes the market wont look back at the missed rain but will focus more on the five-day forecast that showed rain accumulations of 10 to 75 millimetres over almost all of the Midwest.

If those rains materialize, then corn could fall further. If they do not materialize or are spotty, then a new market environment could e m e r g e, g e t t i n g b a c k t o t h e drought worry, although likely not the type of extreme worry that fueled the strong rally in May and early June.

Some weather analysts continue to warn of the potential for a flash drought from much hotter than normal temperatures later in July and August.

However, a growing number think that rain will continue to fall through the summer, taking the edge off the destructive potential from the heat.

And even if there is a period of weather that stresses the Midwest crop, the larger than expected seeded corn area should moderate worries on the grain side of the market.

The oilseed side has a little better upside potential because of a tighter supply-demand ratio and the fact that soybeans develop later than corn, setting pods in August

when, as some predict, it will be hotter than normal.

While the market spotlight is on the Midwest, the crop in Western Canada continues to develop under mostly favourable condi-tions

Environment Canadas tempera-ture forecast for July, issued June 30, shows most of Saskatchewan and Alberta experiencing normal summer temperatures while Mani-toba could be warmer than normal during the month.

Hot weather could be a problem in southern Ontario and the U.S. Northeast in July.

Western Alberta is currently a bit dry but moisture is adequate to excessive in most of the rest of the Prairies.

The only other narrative develop-ing in the crop market is, as we reported last week, widening wheat protein spreads.

U.S. winter wheat crop yields are exceeding expectations as the har-vest progresses but the protein levels are lower than normal.

I n E u r o p e , y i e l d s a r e a l s o expected to be strong, but rain on mature wheat crops is again caus-ing concern about quality and protein.

And Russias government esti-mates a total grain harvest of a record 110 million tonnes, of which about 60 percent is wheat.

However, farmers are assessing damage from torrential rain June 30 that fell in the Rostov region, an important area for export wheat.

Follow DArce McMillan on Twitter@darcemcmillan or email [email protected].


The completion of an ambitious $5.4 billion expansion project at the Panama Canal is being hailed by shipping experts and Panamian authorities as a game-changing accomplishment that marks the beginning of a new era in global shipping.

In a ceremony attended by heads of state and shipping executives from around the world, the expand-ed canal opened June 26 to neo-Panamax ships.

A Chinese container ship, COSCO Shipping Panama, was the first neo-Panamax vessel to pass through the canals new locks, which are 21 metres wider and nearly six metres deeper than those of the original canal.

The expansion was the Panama

Canals first since it originally opened in 1914.

More than 100 years ago, the

Panama Canal connected two oceans.

Today, we connect the present

and the future, said Panama Canal Authority (PCA) administrator and chief executive officer Jorge Quijano.

The expansion project, which started construction in 2007, includes a new set of locks on the Atlantic and Pacific sides of the waterway and the excavation of more than 150 million cubic metres of material to create a second lane of traffic.

In 2015, the original canal set a tonnage record, transiting 340.8 mil l ion Panama Canal units (PC/UMS).

The canals original locks will con-tinue to operate, allowing Pana-max-sized or smaller vessels to pass.

The new locks will triple the size of ships that can use the canal, allowing the passage of about 98 percent of the vessels currently in

use in the world.Shipping analysts say the expan-

sion will fundamentally alter the economics of global shipping.

So far, the canal has 170 reserva-tions for neo-Panamax ships, said a news release issued by the canal authority.

The expansion project did not go exactly as planned.

Completion of the project took about two years longer than expect-ed due to labour disruptions and constructions delays.

The canal author i ty is a lso involved in a conflict with Europe-an companies stemming from cost overruns.

Nonetheless, the authority has plans to invest another $17 billion to build yet another set of locks capable of handling even larger ships that can be handled by only one other canal the Suez.

INTERNATIONAL TRADE

Panama Canal expansion to alter global shipping New locks at the century old canal connect the present to the future by allowing ships triple the size, says official

MARKET WATCH

DARCE McMILLAN

New locks at the Panama Canal will allow ships carrying 15,000 20-foot containers, up from 5,000. | PANAMA CANAL AUTHORITY PHOTO

These bigger acreages provide insurance that supply will be ade-quate even if it gets hot and dry in the U.S. Midwest this summer.

Because of its massive productive

capacity, Midwest crop conditions dominate the futures market trade during the summer.

Four states accounted for 55 per-cent of U.S. corn production last

2016 Grasslands Sheep Exhibition

Presented bySaskatchewan Sheep Breeders Association &Saskatchewan Sheep Development Board

Humboldt Uniplex Humboldt, SK

July 22 - 24, 2016

For details, contact:www.sasksheepbreeders.com www.sksheep.com

Saskatchewan Sheep Development Board (306) 933-5200

Sheep Show & Auction Sale

Lamb Banquet & Fun Auction

Stock Dog Demonstrations

Sheep Breed Displays

Photo Contest

Sheep Industry Education Presentations

Guardian Animal Presentation & Display

Wool Exhibit & DemonstrationsTrade show

MARKETS THE WESTERN PRODUCER | WWW.PRODUCER.COM | JULY 7, 2016 9

HOGS FUTURES FALL

U.S. retailers had their needs met for the July long weekend, and packers slowed their buying in anticipation of being closed for July 4.

The Chicago hog futures con-tract fell 4.1 percent over the week, the most since April. The quarter-ly hog report showed that the U.S. herd was larger than expected.

The U.S. national live price aver-age for barrows and gilts was US$61.28 per hundredweight July 1, down from $61.78 June 24.

U.S. hogs averaged $81 on a car-cass basis June 24, up from $79.81 June 17.

The U.S. pork cutout was $89.21 per cwt. July 1, little changed from $89.27 June 24.

The est imated U.S. weekly slaughter for the week to July 2 was 2.115 million, down from 2.098 million the previous week.

Slaughter was 1.858 million last year at the same time.

In Canada, the Signature Three price was C$87.02 per cwt. June 30, or $191.85 per 100 kilograms, unchanged from June 24.

BISON STEADY

The Canadian Bison Association said Grade A bulls in the desirable weight range sold at prices up to C$6 per pound hot hanging weight.

U.S. buyers are offering US$4.45 w i t h re t u r n s d e p e n d e nt o n exchange rates, quality and export costs.

Grade A heifers sold up to C$5.75. U.S. buyers are offering US$4.35.

Animals outside the desirable buyer specifications may be dis-counted.

SHEEP LOWER

Beaver Hill Auction in Tofield, Alta., reported that 752 sheep and 102 goats sold June 27.

Wool lambs lighter than 54 lb. were $225-$265 per cwt., 55-69 lb. were $220-$260 70-85 lb. were $215-$250, 86-105 lb. were $200-$226 and 106 lb. and heavier were $180-$210.

Wool rams were $79-$152 per cwt. Cull ewes were $73-$155.

Hair lambs lighter than 54 lb. were $212-$250 per cwt., 55-69 lb. were $210-$240, 70-85 lb. were $190-$230, 86-105 lb. were $175-$210 and 106 lb. and heavier were $160-$184.

Hair rams were $92-$152 per cwt. Cull ewes were $63-$131.

Feeder kids lighter than 60 lb. were $290-$340. Good kid goats lighter than 70 lb. were $300-$365.

Those heavier than 70 lb. were $300-$355 per cwt. Nannies were $100-$190 per cwt. Billies were $227-$245.

Ontario Stockyards Inc. report-ed that 1,185 sheep and lambs and 65 goats traded June 27.

Good light weight lambs traded barely steady to lower. Heavy lambs sold $10-$12 lower. Sheep were $5-$7 cwt. lower. Goats sold barely steady.

WP LIVESTOCK REPORT

FED MARKET STABILIZES

The fed cattle market found some footing last week following an $18 per hundredweight drop in Alberta live prices through June.

Trade was too thin to establish a weekly weighted average price.

Dressed bids generally started out the week $3 to $5 per cwt. higher than the previous weeks trade.

Both Alberta federal packers were in the market, but they were not in the mood to push their bids much higher, even with stronger Chicago cattle futures and higher cash prices in the United States.

Basis levels between the Alberta market and the U.S. markets sub-stantially weakened, and some producers opted to carry cattle over.

Dressed bids were generally around $243 per cwt. delivered midweek, and the following day they perked up slightly to $245.

However, relative to the US$122 trade, the basis worked out to about -$12, which was very weak for the season.

Supplies appear to be ample. Weekly western Canadian kill was 45,371, the largest of the year. On steers, 31,383 were slaughtered, the most since June 2009.

While the probability is still fairly high that the market could move lower, the downside risk is some-what limited.

The U.S. market has fundamental factors supporting prices. Feedlots are more current, and packer mar-gins are strong. With U.S. prices down, there is good beef demand in the American and export mar-kets.

Reuters reported that packers in the southern U.S. were paying US$122 per cwt. July 1, up $6 from the previous week.

COWS LOWER

D 1 , D 2 c o w s ra n g e d C $ 8 4 -$100.50 to average $90.49 per cwt., down $7.61. D3 cows ranged $71-$87 to average $79.50.

Rail grade cows ranged $180-$185. Bulls averaged $117.43, down $5.13.

A large proportion of auction vol-

umes during the week were cows and bulls. Packers were not that interested in buying because they are focusing on fed cattle.

Demand for ground beef and end cuts has been soft, pressuring prices down.

Weekly non-fed exports to June 18 were almost 2,700 head, the highest weekly volume this year.

Volumes are expected to tighten, and cow prices should stabilize or rise a little.

FEEDERS WEAKER

The Alberta feeder market was fairly quiet in the week leading to July 1.

Average steer prices fell almost $4 per cwt., and heifers dipped 75 cents.

Rain has eased concerns about dry pastures, but reduced feeding profitability is limiting demand.

Calf prices traded unevenly, ranging $5 up or down from the previous week, with prices influ-enced by lot size and quality.

A few larger feeders traded steady to $6 lower.

Weekly auction volumes fell 18 percent to 9,119 head from the pre-vious week, but that was 27 percent larger than last year.

Weekly feeder exports to June 18 fell to a modest 2,409 head.

Many auction markets will take a break in July.

Cow-calf pairs traded in a range of $1,500 to $2,750.

The Chicago feeder futures rose last week on the improved fed mar-ket and falling corn prices.

U.S. BEEF FALLS

U.S. boxed beef closed lower June 29 with Choice at $208.57, down $6.89, and Select at $195.88, down $2.46.

After July 4, the market enters the dog days of summer when beef demand typically slows.

As well, year-to-date beef pro-duction is 3.7 percent larger than a year ago.

These two factors will place downward pressure on prices.

Canadian cut-out values for the week ending June 24 were unavail-able.

CANFAX REPORT

CHICAGO (Reuters) Mexicos steady buying has helped U.S. corn export sales outpace last year, off-setting sluggish early-season pur-chases by traditional Asian cus-tomers like South Korea and Japan.

Now, Mexico is primed to over-take Japan as the single largest U.S. corn importer, knocking Tokyo from the perch it has occupied since the mid-1980s and taking the top spot for the first time ever.

The shift illustrates how the United States, once the worlds lone grain trading superpower, is n o w re l y i n g o n i t s s o u t h e r n neighbour to absorb more of its ever-growing corn production, analysts said, as rising suppliers like Ukraine and Brazil disrupt grain trade flows.

At risk is the long-standing domi-nance of U.S. corn exports, valued at $8.3 billion last year and a crucial outlet for about a third of every U.S. corn crop.

Theres been a shuffling of the top of the deck, said Dan Basse, p re s i d e nt o f C h i c a g o - b a s e d consultancy AgResource Co. Its a very competitive world out there.

The change in export patterns highlights how quickly the fortunes in the farm economy can turn, and how little time companies have to respond, said traders.

Despite a three-month buying flurry, Japan remains on pace to buy its second-smallest U.S. corn volume since at least 1999, accord-ing to USDA data. South Koreas haul through mid-June is the sec-ond-lowest in a decade.

That Asian demand could stall as the U.S. dollar has rallied to a three-month high against a basket of cur-rencies after Britains vote last week to split from the European Union, making dollar-denominated com-modities costlier for those holding other currencies.

Meanwhile, Brazilian and Argen-

tine corn prices are easing as their late-season harvests accelerate.

Buyers respond to price. If youre not able to offer grain cheaper than the next guy, youre not going to get that business, said a U.S. exporter who asked not to be named.

When Asian buyers started shun-ning U.S. corn last fall, some of the largest American grain exporters and sellers scouted markets closer to home to offset the losses, said traders.

In particular, they turned to mar-kets that industry-funded groups, such as the U.S. Grains Council, had been wooing for years and regularly hosted at U.S. grain eleva-tors and farms.

Mexico, traders said, was an obvi-ous place to pitch due to proximity and favourable trade status. For Colombia and Peru, free trade agreements also made buying corn from Brazil and Argentina less appealing than American grain.

EXPORT MARKETS

Competition squeezes out U.S. corn

This cattle market information is selected from the weekly report from Canfax, a division of the Canadian Cattlemens Associa-tion. More market information, analysis and statistics are avail-able by becoming a Canfax sub-scriber by calling 403-275-5110 or at www.canfax.ca.

ELITE AUTOMOTIVE GROUP INC. O/A

SUBARU OF SASKATOONMORE VEHICLES AT WWW.SUBARUOFSASKATOON.COM *MSRP does not include Freight, PDI,Taxes & Fees *See dealer for details471 CIRCLE PLACE 665-6898 OR 1-877-373-2662

TOP SAFETY PICK PLUS AWARDS FROM IIHSSubaru Wins 6 Top Safety Pick Plus Awards For The 2016 Model Year

2016CROSSTREK

2016LEGACY

2016IMPREZA

2016FORESTER

2016OUTBACK

2016WRX

CONSUMER REPORTSHAS NAMED TWO

SUBARUS TOP PICKSFOR 20162016 ImprezaBest Small Car

2016 ForesterBest Small SUV

Subarumakes the

Best SafestVehicles

Only Manufacturer with 6

Top SafetyPick Plus Awards


Is it time to move from sabre rattling with the European Union over the use of genetically modified crops to out-flanking it?

Stuart Smyth, research chair in agri-food innovation at the University of Saskatche-wans agriculture college, thinks so.

Smyths address to delegates at the Emerging Technologies for Global Food Security Conference in Saskatoon last month was the buzz of the event.

He argues that the EU is so entrenched against the use of biotechnology and is so influenced by environmentalists bent on obstructionism that its time to fence Europe out of global agricultural trade so developing nations that are interested in using biotechnology have options other than to accept EU restrictions on the use of GMOs if they want to trade with the 28-member organization. (Britain hasnt officially pulled out yet.)

Developing countries seeking to trade with the EU at lower tariff rates must sign the Cartagena Protocol, which urges them to adhere to the precautionary principle, which the Canadian Environmental Law Association defines as a duty to prevent harm, when it is within our power to do so, even when all the evidence is not in.

However, GMOs have not been shown to harm. In fact, they have increased yields.

This puts pressure on developing nations with small budgets who must do business with the EU to forgo the opportu-nities offered by GMOs.

Some of the EUs efforts may be mitigated. China bans domestic production of GM

crops for human consumption but is actively pursuing GMO research, and there are reports of large-scale illicit use of GMOs in farmers fields.

And while cotton is the only GM crop approved for growing in India, its possible the technology will move further in that direction there.

If GMOs make significant inroads in the Asian giants, global momentum in favour of biotechnology will be strong, given that both countries are major agricultural importers.

It is a significant development to get into a proxy battle with the EU through devel-oping countries.

However, its irresponsible to deny developing nations the chance to use tech-nology that can help them feed their popu-lations by holding an economic hammer over their heads.

So the G8 has struck a partnership with 10 African nations called the New Alli-ance for Food Security and Nutrition, which encourages them to use GMOs, with billions of dollars in G8 funding. This represents a key post in the fence policy.

An important test for the use of biotech-nology in Europe and its trading nations and hence an opportunity to find some common ground will be CRISPR/Cas9, the gene editing technology that generates new crop traits without introducing for-eign DNA.

The United States has determined that CRISPR technology wont be subject to the same rules as GMOs, but Canada consid-ers traits developed that way as novel and so will be assessed by Health Canada, though none have yet gone through the process.

If CRISPR technology yields its promised effects yet is rejected by the EU in the man-ner of GMOs, the signal will be clear, and the fence will become more robust.

Canada would do well to push for Euro-pean acceptance of CRISPR to avoid a massive trade dispute that will force devel-oping nations to choose sides.

FOOD SECURITY

EUs stand on gene editing may set stage for ag trade

CRAIGS VIEW

Bruce Dyck, Michael Raine, Barb Glen, Brian MacLeod and DArce McMillan collaborate in the writing of Western Producer editorials.

We now know that organic farming can yield enough to feed the world.

KENDRA KLEINFRIENDS OF THE EARTH, PAGE 3

WPEDITORIAL OPINION

Its a challenge small communi-ties across the country have faced for decades: how to con-vince young people to stay.

For many, the lure of the city is irresistible, with greater career and educational opportunities, and copious options for entertainment and sports.

The hustle and bustle of the city, coupled with the larger youth populations that live there has, for decades, drawn young people away from Canadas small commu-nities.

I grew up in a city of about 60,000 outside of Edmonton, a bedroom community that, in traffic, takes

about 15 minutes to drive across in any given direction. While hardly comparable in size to a small town, its still hard to go some-where in my hometown without running into at least one person I know.

As a kid, finding things to do, par-ticularly when we didnt have our drivers licences, was challenging. It is a boredom familiar to youth everywhere. (As a teenager, the swimming pool, the library, and the now-shuttered dive of a movie theatre were staples on the local social scene.)

There were always plenty of things to do if you were under the age of 12. Cool activities, classes, and drop-in sports at the local community and recreation centres were always on offer opportuni-ties that re-emerged when you became an adult.

Not so much, though, if you fell in between the ages of 13 and 17. This also happens to be the time when most of us feel like were too cool for pretty much everything. Its an

attitude that has been known to drive teachers and parents crazy since the beginning of time.

Unfortunately, those years are also critical for developing a con-nection to ones hometown.

After-school sports teams and other extracurricular activities helped fill much of the void and kept us out of trouble, for the most part. Still, I remember bored con-versations with friends about how most of us couldnt wait to get out of this place.

A lot of us did.A decade later, many of my class-

mates and I are scattered across the country and the world. Most of our careers and dreams have landed us in communities much larger than our hometown.

And, as much as I hate to admit it (I love my hometown, I really do), hardly any of us, myself included, talk of moving back.

Its a pattern Ontarios rural com-munities are trying to change.

Community leaders, business leaders and politicians, including

Ontarios Agriculture Minister Jeff Leal, gathered in Stratford recently for the third annual Rural Ontario Summit.

The goal: brainstorm ways to convince young people to stay.

Education, training opportuni-ties, jobs, entrepreneurship, social infrastructure, internet access, improved transportation and civic leadership were all up for discus-sion as community leaders grap-pled with how to convince the younger generation that rural com-munities are viable places to call home.

Quite simply, youth are the future. Without them, rural Ontar-io faces much uncertainty.

At the heart of the conversation is Ontarios agriculture industry, an industry in which ongoing invest-ments in innovation and technol-ogy will help lure the next genera-tion.

Premier Kathleen Wynne has challenged the sector to create 120,000 jobs by the year 2020 and double its annual growth rate.

Leal has repeatedly insisted that goal is achievable. Since 2013, 34,000 new jobs have been created in rural Ontario, along with a 1.6 percent bump in the agrifood sec-tors gross domestic product.

Exposing young people to these opportunities is critical.

Meanwhile, industry leaders point to growing demand for local food and craft beer, which coinci-dentally, are increasingly popular with younger Canadians.

In todays fast-paced and increas-ingly globalized world, competing against the lure of major metropo-lises can be a challenge for any community. For rural communi-ties, those difficulties can seem nearly insurmountable.

Still, it should not be seen as an impossible task, particularly when its being tackled by folks whose hearts and souls are the essence of their communities in the first place.

RURAL ONTARIO SUMMIT

Governments look for ways to stop rural youth drainCAPITAL LETTERS

KELSEY JOHNSON

Kelsey Johnson is a reporter with iPolitics, www.ipolitics.ca.

FOOD SECURITY

Editor: Brian MacLeodPhone: 306-665-3537 | Fax: 306-934-2401E-Mail: [email protected]

THE WESTERN PRODUCER | WWW.PRODUCER.COM | JULY 7, 2016 11

BY SYLVAIN CHARLEBOIS

China is one of the worlds largest meat consumers. It currently consumes 28 percent of the globes meat, includ-ing half of its pork. While the aver-age Chinese consumer used to eat about 13 kilograms years ago, meat consumption is now up to 63 kilo-grams per person.

These are staggering numbers, and if nothing changes, they will only go up.

Chinese public health officials are now recommending consum-ers eat 40 to 75 grams of meat per day and look at alternative sources of protein. That is 50 percent less than current levels.

Less meat consumption will not only cause changes for China but also for the rest of the western world, particularly Canada, which would affect our relationship with animal proteins.

Every decade, as many nations do regularly, Chinese health officials revisit their food policies and issue a new food guide to influence con-sumer behaviour. Since the last guide, the food landscape in the country has changed dramatically.

The average Chinese consumer now eats 63 kilograms of meat a year. In fact, at current rates, meat consumption per capita could increase by another 30 kilograms by 2030.

China, where 1.3 billion people live, even considers KFC a great place to have a romantic encounter.

For several decades now, they have embraced animal proteins in their lives and have considered them as part of how social classes are defined. In other words, the rich should and must eat meat.

That attitude, however, is slowly

eroding. With several food safety scares and health issues emerging, China is thinking differently about meat consumption as public offi-cials recognize that it is important to make changes.

New guidelines recommend a reduction in meat consumption per capita from 63 kilograms of meat per year to 14 to 27 kilograms per year. The underlying intent, of course, is to reduce obesity and other health challenges for its population in the future. Yet impli-cations go beyond the health of its citizens.

It may also help from an environ-mental perspective.

Globally, livestock production is responsible for 14.5 percent of cli-mate change emissions. This change has many environmental groups welcoming Chinas deci-sion.

However, for Canada, it may war-

rant a change in how we grow Asian markets.

We currently look at trade deals as gateways to untapped markets where consumers are craving for more animal proteins.

Discussions about protein quali-ty around the world are slowly going mainstream, and many gov-ernments are increasingly becom-ing concerned about the sustain-ability of livestock production. Therefore, calculations to measure the potential of Asian markets may need to be revisited as a result of these new guidelines.

There will always be a market for animal protein, but it can only grow by recognizing value-added fea-tures.

A&W, McDonalds and even Earls with its recent humane beef kafuf-fle are chains that can speak to how complicated meat consumption is becoming.

As markets mature and become more fragmented, consumers will look for products that reflect how consumers see the food supply chain and responsible production practices. Animal welfare, organi-cally focused methods and locally produced commodities have won market currency in many places around the world. Oddly, when looking at national food guides, China is seeing things differently.

Animal protein consumption has been managed and stewarded dif-ferently in North America.

Lobby groups representing the beef industry have successfully defied governments that want to suggest new meat consumption guidelines.

However, with Chinas call to encourage consumers to look at proteins differently, our beef industry may be at odds with cur-rent global trends.

Per capita consumption for beef is dropping in Canada, a trend that has continued for decades. Conse-quently, a change in the architec-ture of the industry only makes sense, and these adjustments need to happen quickly.

Perhaps other Asian countries will follow suit.

Since it has a highly organized and co-ordinated economy, China may succeed with its call to reduce meat consumption over the next decade or so. It will be interesting to see how North America and Cana-da reacts. But for now, China may have understood something that the western world has yet to grasp.

& OPEN FORUMPUSH TO REDUCE CONSUMPTION

China may wane as meat export market

The Chinese government is encouraging its consumers to eat less meat. | FILE PHOTO

Sylvain Charlebois is dean of the Faculty of Management and profes-sor in food distribution and policy at Dalhousie University.

Global sales of biostimulant cropping products are rapidly increasing and are expected to reach more than $2.5 billion by 2018.

Farmers who attend agricultural trade shows have likely noticed that many new agronomic prod-ucts are being sold.

Canadian research organizations study the effectiveness of cropping products, but the information gleaned from this research is often proprietary and not released to the public.

If a study has favourable results for the company that paid for the research, we will likely hear about it from the companys representa-tives as we wander the trade show floors.

But the skeptic in me cant help but wonder about all of the studies that are being kept confidential.

In the United States, a program called NutrientStar, which was launched earlier this year by the Environmental Defense Fund, is reviewing cropping tools and prod-ucts to find out what actually deliv-ers beneficial results for producers.

The group is composed largely of academics and agronomists that examine existing agronomic trial data and complete meta-analysis of the information.

However, the groups analysis is restricted by the limited studies that are available, including those that companies chose to keep con-fidential. As well, it has no control of the trial protocols used in the studies that it can access.

Canada is a world leader in agro-nomic research and development, yet there is a void of publicly avail-able independent research into new agronomic products.

In other words, there is a void of publicly funded research, which is not proprietary, into the many biostimulant-cropping products being sold across the country.

In the absence of independent analysis, the onus of testing has fallen to farmers. The Canola Council of Canada is trying to get farmers to follow specific research protocols so that these trials can be added to a larger analysis of prod-ucts and growing techniques.

Meanwhile, independent groups such as PAMI and universities are well-suited to research new agro-nomic products.

Independent research would be well received by Canadian produc-ers, but in the absence of public funding, the question always comes down to who is going to pay for it?

[email protected]

The Statistics Canada num-bers are startling. Rarely are acreage shifts so dramatic from one year to the next.

Lentils everywhere. Thats what you see in Saskatchewans south-ern grain belt where lentils have become the dominant crop.

The latest numbers are even more extreme than earlier esti-mates: a 48 percent increase. And this is on top of the previous years 27 percent jump.

At 5.84 million acres, lentils cover nearly as much area in Western Canada as durum (6.1 million) and barley (6.385 million).

Saskatchewan has 5.3 million of

the lentil acres, which is bigger than the provinces durum acreage (five million) and twice as big as the barley area. Its quite a feat for a crop thats best adapted to the brown and dark brown soil zones.

Spring wheat in Saskatchewan has declined to only 6.9 million acres. While canola is king in the province at 10.9 million acres, its amazing that lentils now cover more than half the area devoted to the Cinderella crop.

Alberta has more than doubled its lentil acreage this year, but the prov-ince still has only 565,000 acres. With their reluctance to embrace lentils, Alberta farmers turned heavily to field peas, increasing acreage by nearly 29 percent and generating a third consecutive record area (1.9 million acres).

In Saskatchewan, field pea acre-age went up only three percent to 2.2 million. This is almost a million acres below the record set back in 2008. Saskatchewan has become lentil country, limiting field pea acreage despite strong pea prices.

Meanwhile, flax in Western Can-ada has seen a precipitous decline of nearly 44 percent, a victim of softer prices and often disappoint-ing yields. Flax acres had been increasing the past several years.

Manitoba continues to love soy-beans. This is the ninth consecu-tive increase, up 17 percent to 1.6 million acres. However, the love affair does not continue very far into neighbouring Saskatchewan, where acreage has slipped from 270,000 to 235,000.

Grain corn in Manitoba has gone from 250,000 acres last year to 325,000 this year. Statistics Canada does not report corn acreage in Saskatchewan. In Alberta, corn acreage has slipped from 40,000 to 25,000.

Major seed companies have been predicting millions more acres of soybeans and corn across the West. So far, the advance has stalled in Manitoba.

In the smaller acreage crops, mustard is up 52 percent, but this comes after a 31 percent drop last

year. At 525,000 acres, mustard is only 25,000 acres higher than the 2014 level. Nearly 75 percent of the mustard acres are in Saskatche-wan. Acreage in Alberta is domi-nated by the yellow type. This years increases are in yellow and oriental, with brown mustard actu-ally dropping.

Canaryseed is down 20 percent to 260,000 acres, but it was up 18 per-cent last year. Once a speculative crop with large price swings that depended on the size of the Sask-atchewan crop, canaryseed has traded in a relatively tight price range for many years.

Of all the crops, the biggest game changer is lentils.

Given the volume of production, we could see the best prices early in the harvest season, which would create a rush to sell the crop as soon as possible. If that happens, it will be a buyers market.

HURSH ON AG

KEVIN HURSH

Kevin Hursh is an agricultural journalist, consultant and farmer. He can be reached by e-mail at [email protected].

INDEPENDENT STUDIES

Funds needed for product research

PRODUCTION OUTLOOK

Lentil acres biggest surprise in Stats Canada numbers

EDITORIAL NOTEBOOK

ROBIN BOOKERREPORTER


PIPELINES FOR OIL

To the Editor:

Inadequate oil transportation for Canadas energy market, namely, the 1974 rejection of the McKenzie Valley pipeline and the recent Key-stone pipelines, cost Canada bil-lions of dollars.

Out of necessity we need to heat our homes six months per year and we face major transportation chal-lenges simply because of the geog-raphy of our country.

Yet we are only responsible for .05 percent of the pollution generated globally. We are not the problem. If all Canadians chose to make sacri-fices for the betterment of nature , a positive effect would evolve.

The global effect would be nega-

tive because we are one of the most ethical and environmentally, responsible producers of energy in the world. The U.S. has more than three million kilometres of liquid petroleum and natural gas pipe-line. Included is the 48-inch pipe-line from Prudhoe Bay to Valdez, transporting thousands of barrels of crude daily to American refiner-ies, using marine-going large tank-ers, going down the Pacific coast to American refineries daily.

The U.S. has no problem drilling for oil in the Pacific, Atlantic, Arctic or the Gulf of Mexico, yet some Americans have the audacity to condemn Canada for mining our own oilsands in the North. Con-trary to popular belief, oil sands bring no environment threat to global life, therefore Canadian

pipelines must be constructed to deliver our natural resources to market.

The Fort McMurray oil fields will generate $1.5 trillion. There is potential for 500,000 direct and indirect jobs across the country. Thus we had better elect govern-ment people who understand the value of our natural resource and make Canada a debt-free nation.

Having oil in the ground does not bring us prosperity, and not being able to develop it, market it, ship it through a pipeline and sell it at world price will make us poor.

Canadians deserve better. So think about it what kind of Canada do you want to leave your children?

John SeierstradTisdale, Sask.

LETTERS POLICY:

Letters should be less than 300 words. Name, address and phone number must be included for verification purposes and only letters accepted for publication will be confirmed with the author.

Open letters should be avoided; priority will be given to letters written exclusively for The Western Producer.

Editors reserve the right to reject or edit any letter for clarity, brevity, legality and good taste.

Publication of a letter does not imply endorsement byThe Producer.

OPEN FORUM

CHANGE FOR THE WORSE

To the Editor:

We have just celebrated, com-memorated, slept through Cana-das 149 birthday. I pray that I can live long enough to see and hear the 150th.

The few reminders of change are:How long did it take to increase

my Canada Pension and Old Age Security by $40 a month? Ten years?

With one swipe of the pen, medi-cation went up $5 a prescription and prescriptions $40.

So much for comfort.Ive driven Canadian roads since

1947. Today, its more dangerous on the highway than a pasture full of angry bulls.

Immigrants in the early 20th cen-tury knew that hard work was their salvation. They grew and produced their own food, shelters and furni-ture.

Mu c h o f t h i s w a s p o s s i b l e because they lived in their own environment with family for sup-port. If necessary, they moved to a more favourable environment. Todays immigrant does not have the same freedom of choice. Todays immigrant is made to live like everybody else. This is an illusion. If you cant adapt, what then?

Politicians are almost interested in your opinion, then upon elec-tion they tell you what the party leader thinks you should do.

The only place people congregate is at sports and rallies. Did you ever attempt a friendly neighborly con-versation at one of these?

What are we doing to and with the aged and ill? Are we concerned with their welfare or our own com-forts?

E.O. OystreckYorkton, Sask.

BY BARBARA DUCKWORTHCALGARY BUREAU

Francis Gardner, an Alberta rancher who spent a lifetime pro-tecting the land, died June 26 at the age of 74.

Gardner owned and operated the century old Mt Sentinel Ranch near Chain Lakes in the eastern slopes, which received the first environ-mental stewardship award from the Alberta Cattle Commission in 1992.

He was active in preserving the native grasslands of the province and was a founding member of the Southern Alberta Land Trust Soci-ety, which has protected thou-sands of acres of grassland and montane forest.

He was also involved with the Cows and Fish program to protect riparian areas and restore water-sheds to their natural forms.

He was a member of the Pekisko Group, which helped local ranch-ers fight against oil and gas devel-opment on native range in the area.

ALBERTA

Environmental rancher dies

WHEN YOU FUEL UP WITH

E NT E R TO W I N

6AVAIL ABLE

PRIZES

FOR MORE INFORMATION, OR TO ENTER, VISIT COOPAG.CA. CONTEST CLOSES AUG. 14, 2016.

8500 LITRE DOUBLE WALL

$5000 FUEL CREDITOR


BY BARB GLENLETHBRIDGE BUREAU

Strip loin steaks were served to International Trade Minister Chrystia Freeland and Mexican President Enrique Pena Nieto at a dinner last week after Mexico announced it would once again accept Canadian beef from ani-mals older than 30 months.

It was a fitting menu item to acknowledge a full re-opening of the Mexican market that has not accepted over-30-month (OTM) beef since 2003, when BSE was found in Canada.

Though both Mexico and the United States have accepted under-30-month (UTM) beef since August 2003, the restrictions on OTM and some types of offal remained. Mexico will remove that restriction Oct. 1.

It hasnt come too soon for the Canadian Cattlemens Associa-tion.

Weve only been working on this one for 13 years, said John Mass-wohl, the CCAs director of govern-ment and international relations.

I cant tell you how many meet-ings Ive been to, with our Mexican counterparts and meetings of min-isters along the way. Its on the agenda every single time, the over-30-month trade, and its been hard to get, but now its finally hap-pened.

Canada exported $270 to $290 million worth of beef annually to Mexico before BSE. About 20 per-cent of it was OTM.

Masswohl said he thinks Canadi-an beef exports could return to those levels, given a larger herd and the right price.

CCA president Dan Darling, in Ottawa for the announcement, said it might encourage Canadian producers to expand their herds.

When our production increases to previous levels, I believe that Mexico could again import more than $250 million per year like it used to, Darling said in a CCA news release.

In addition to expanded access for OTM beef, we look forward to potential future opportunities that todays announcement of fully restored access for Canada for all beef and beef products, regardless of the age of the cattle, will bring.

Ca na d a B e e f s a i d Me x i c os announcement sets an important precedent for market access condi-tions in other markets around the world.

Mexico is Canadas third largest beef export customer, last year buy-ing 19,400 tonnes valued at $155 million.

The Canadian Meat Council said the change would mean incremen-tal sales of $10 million a year to Mexico. Incremental value occurs when a market is willing to pay more for certain products.

Masswohl said one reason Mexi-co gave for the delay in fully nor-malizing beef trade was that until about two years ago, it could not export its own beef to Canada.

That was largely because they had never asked, said Masswohl.

Before about five years ago, Mexico really didnt have an export beef industry. They were entirely focused on their domestic market. But theyve actually done a good

job in developing an export indus-try. When they told us that concern, we were supportive of them mak-ing the request.

Mexico now has unlimited duty-free access to Canada for its beef, although relatively little is sold here. However, Masswohl said that access helped solve Canadas beef trade issue.

Its good to have friends on the inside. I would say that the Mexican cattle producers have been a good ally for us on that, as well as other issues weve worked with them on. We worked really closely with them on the COOL (country-of-origin labelling) issue.

The Oct. 1 timing for a full re-

opening of the Mexican beef mar-ket is also a benefit to Canadian producers, Masswohl added.

We wanted to make sure this was done in time for what is the peak over-30-month time of the year, and thats when farmers are doing that preg checking in the fall and if theyve got a cow that isnt pregnant, it usually does not get fed over the winter time, he said.

October-November are really important times for marketing those over-30-month animals, so its good to see that well have that option at that time of the year.

[email protected]

2000 180.2452001 272.3342002 289.6652003 117.6042004 327.4082005 209.2792006 158.6972007 173.6392008 180.1992009 169.8542010 185.8152011 152.3922012 123.8652013 96.7762014 151.1862015 155.651

Source: Canadian Cattlemens Association | WP GRAPHIC

CANADIAN BEEF EXPORTS TO MEXICO

million $Canadian product weight (tonnes)

37,280

47,230

80,625

24,966

77,887

46,865

41,647

19,4185

45,661

69,840

46,348

52,336

18,51045

29,442

32,173

23,386

BEEF EXPORTS

Canadian beef heads to MexicoMexico closed its border to cattle over 30 months in 2003 in wake of BSE

Were here to help your business thrive. Agriculture is a business like no other. Thats why

you need a fi nancial advisor with a background

in the business. With TD Agriculture Specialists

like Jolene, you have one. So when the Franke

twins needed fi nancial advice to help grow their

grandparents farm, Jolene was ready to help.

Today, the Frankes have a thriving operation with

over 250 head of cattle. Share the benefi t of our

experience. Talk to a TD Agriculture Specialist today.

The TD logo and other trade-marks are the property of The Toronto-Dominion Bank.

Visit tdcommercialbanking.com/agriculture

Our deep roots in agriculture can help you thrive.



Canadas two largest railway companies appear to be on board with Ottawas plan to limit pollut-ing emissions for railway locomo-tives.

Last month, the federal

Documents

What's behind pulses' shift to bulk exports?