EASTERN EDITION
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September 17, 2012 $3.50
MARKETING
2012
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SEPTEMBER 17, 2012
MARKETING 2012 Strong prices look like a boon this year — in fact, they are a boon — but they raise hard questions too. Why did the most sophisticated market programs lose us the most money this summer? And what are those clouds on the horizon? Find out in this special issue.
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OUTLOOK ON CORN PRICES The market needs corn, and Philip Shaw says it’s going to pay for a good long time, unlesss…
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CORN HEADS WEST Behind the forecast 10 million acres of Prairie corn are farmers like Joel Lawson, looking to score big.
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SEPTEMBER 17, 2012
GUIDE LIFE — PEACE IN THE FAMILY The holidays should be a time of family harmony, but on the farm, they can need some help.
EVERY ISSUE 8
MACHINERY GUIDE Big tractors, big performance, and an increasingly big choice for Canada’s big farmers.
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HANSON ACRES When the lawyer’s kid comes to stay, the Hansons find out that on the farm, some facts don’t change.
GUIDE HEALTH Everywhere we turn, someone wants us to buy fish oil supplements. Will they really make you healthier?
Our commitment to your privacy
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GUIDE HR — THE WRONG BELIEFS Taking a hard look at your personal biases takes hard work, but the payoff may make it worthwhile.
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At Farm Business Communications we have a firm commitment to protecting your privacy and security as our customer. Farm Business Communications will only collect personal information if it is required for the proper functioning of our business. As part of our commitment to enhance customer service, we may share this personal information with other strategic business partners. For more information regarding our Customer Information Privacy Policy, write to: Information Protection Officer, Farm Business Communications, 1666 Dublin Avenue, Winnipeg, MB R3H 0H1.
THINKING OUTSIDE THE FENCE Marketing their farm’s environmental quality helped Alberta’s Jenkins family find a succession fix.
THE STORAGE QUESTION Canada’s countryside is becoming one vast on-farm elevator. Now, what’s the best way to make it pay?
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MORE FROM THE MARKET “Know your customer” seems like hot air to everyone except the farmers using it to build more income.
GROWING THE BRAND AGCO says the global battleground is here in North America, and it has a plan to win.
THROW OUT YOUR MARKETING PLAN? Most market advisers told you to sell crop in the spring, before the run in prices. Is it time to change?
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SO YOU THINK YOU CAN MARKET If two-thirds of our crop get sold in the bottom third of the market, are those high prices a mirage?
MINIMIZE YOUR FERTILIZER BILL Gerald Pilger shows how to use your marketing skills to cut your nitrogen costs next spring.
FUELLING FAMINE? Oxfam tells us why they’re fighting Canada’s ethanol standards (and how Ottawa isn’t listening).
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PETUNIA VALLEY The boys along the sideroad are getting pretty bent out of shape, and paying for the privilege.
CONTENTS
BUSINESS
country-guide.ca 3
desk EDITORIAL STAFF Editor: Tom Button 12827 Klondyke Line, Ridgetown, ON N0P 2C0 (519) 674-1449 Fax (519) 674-5229 Email:
[email protected] Associate Editors: Maggie Van Camp Fax (905) 986-9991 (905) 986-5342 Email:
[email protected] Gord Gilmour (204) 294-9195 Fax (204) 942-8463 Email:
[email protected] Production Editor: Ralph Pearce (226) 448-4351 Email:
[email protected] ADVERTISING SALES Lillie Ann Morris (905) 838-2826 Email:
[email protected] Cory Bourdeaud’hui Cell (204) 227-5274 (204) 954-1414 Email:
[email protected] Head Office: 1666 Dublin Ave., Winnipeg, MB R3H 0H1 (204) 944-5765 Fax (204) 944-5562
Tom Button is editor of Country Guide magazine
When a thing is right Grain markets are acting exactly as they should. The commodity prices we’re seeing this fall are a true reflection of the actual value of the grains and oilseeds that our farms are producing. As the livestock sector adjusts, soon the exchanges will show a truer valuation of our animal production as well. There is nothing in today’s markets for agriculture to apologize about, or for that matter to gloat over either. It’s cold reality. The world is recognizing the wealth that farmers create. Full stop. We’ve always known food makes life possible, but increasingly food is valued because it makes quality of life possible too, enabling billions of people for instance to consume meat and dairy. Yes, it comes at a cost, but the benefit is so great, the cost is worth bearing. That is what the market is telling us. Of course, we’ve also always known that farmers don’t only produce food. Farmers have always produced leather and wool and cotton too, as well as lubricants and paint ingredients and all manner of processed and industrialized inputs. Now, agriculture produces ethanol as well, and some analysts — including some that we quote in this issue — would have us believe that this is somehow new fangled and wrong headed, and that ethanol is only a good idea in times of depressed prices. They couldn’t be more wrong. The world has a choice, either to cope with peak oil by slashing and rationing our energy use, or to commit to a bold but realistic vision of a future where more energy is sustain4 country-guide.ca
ably produced, and where energy won’t be a constraint that prevents us from thriving. There is a cost to ethanol. Who would deny it? But there is a benefit too in the lives it saves and the lives it enhances. Pumping more barrels to replace the fuel we should be producing from corn would only mean borrowing even more from the future, using petroleum reserves that should be held back for coming years so we can avoid paying our share of the price now. Nor does anyone know how long the bull market will last. It won’t last forever. We know that because we know high prices encourage high production. This is what they are meant to do, and we can be confident we will see the world’s farmers respond to today’s markets with enormous enthusiasm and skill. We also know that in order to get to the point where they can prosper, today’s farms have wrestled with lean times. Often, they have wrestled for generations, using only their grit to pull them through the long, tough hauls between the occasional years of stronger returns. And it isn’t as if today’s prices are shielding farmers from the risk of poor decisions. Every farmer who looks at the price of the farm down the road, or the cost of a new combine, knows the intimate meaning of risk. But be sure to find some time away from the decision-making this year. Celebrate your success. When a thing is right, say it. I’m at 519-674-1449, or email me at
[email protected] . Let me know what you’re thinking.
Advertising Services Co-ordinator: Sharon Komoski (204) 944-5758 Fax (204) 944-5562 Email:
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[email protected] Designer: Jenelle Jensen Contents of this publication are copyrighted and may be reproduced only with the permission of the editor. Country Guide, incorporating the Nor’West Farmer and Farm & Home, is published by Farm Business Communications. Head office: Winnipeg, Manitoba. Printed by Transcontinental LGMC. Country Guide is published 12 times per year by Farm Business Communications. Subscription rates in Canada — $33.60 for one year, $51.45 for 2 years (prices include GST). U.S. subscription rate — $35 (U.S. funds). Subscription rate outside Canada and U.S. — $50 per year. Single copies: $3.50. Publications Mail Agreement Number 40069240. We acknowledge the financial support of the Government of Canada through the Canada Periodical Fund of the Department of Canadian Heritage.
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[email protected] U.S. subscribers call 1-204-944-5766 Country Guide is printed with linseed oil-based inks PRINTED IN CANADA Vol. 131 No. 10 Internet address: www.agcanada.com
ISSN 1915-8491 The editors and journalists who write, contribute and provide opinions to Country Guide and Farm Business Communications attempt to provide accurate and useful opinions, information and analysis. However, the editors, journalists, Country Guide and Farm Business Communications, cannot and do not guarantee the accuracy of the information contained in this publication and the editors as well as Country Guide and Farm Business Communications assume no responsibility for any actions or decisions taken by any reader for this publication based on any and all information provided.
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opinion
Big Idea To farmers, biofuel mandates are a step in the right direction, producing green energy, weaning the world off petroleum, and supporting agriculture. Who could object to that? Well... aid groups are stepping up their campaign to blame ethanol for solving our energy problems on the backs of the world’s poorest and hungriest. Here's how.
Fuelling famine? By Gord Gilmour, CG Associate Editor
To us in the wealthy, developed world, food insecurity means running out of milk and having to wait for the next trip to the store. But for millions around the globe, food insecurity means imminent malnutrition, starvation and death. Now, aid groups are intensifying their call for a rethink of biofuel mandates that divert a significant portion of major food crops — 40 per cent of the U.S. corn crop, for example — to fuel production. Country Guide recently spoke to Oxfam Canada executive director Robert Fox to find out what they’re saying about ethanol and food, and what response they’re getting.
Country Guide: Oxfam has been one of the loudest global voices calling for a reconsideration of biofuels. Can you tell us a bit about how the organization got here? Robert Fox: Oxfam has a detailed analysis of the global food system and we strongly believe that it’s broken at this time. It’s broken for a number of reasons and biofuels are just one part of that, but they’re a very important part. They’re increasing competition for food at a time when supply is falling for a number of reasons, and when competition — other than biofuels — for that food resource is also increasing. I think it’s very important to note that Oxfam isn’t advocating a cheap food policy, but we need to look at how food prices have been increasing and consider that in a global context. The average Canadian family spends about 15 per cent of its income on food. Say commodity prices increase by 50 per cent — for most Canadians that might mean having to switch from a brand name to a generic product, or consuming a bit less of certain expensive products. But in the communities where we work, in places like Africa, Latin America and Asia, those families are spending 60, 70 even 80 per cent of their income on food. If corn goes up in price 50 per cent, in that case it doesn’t mean a little less consumption. It means you don’t eat. CG: So when that price increase hits one of these vulnerable regions, how does it play out in the lives of the people? I recall reading during the last food crisis in 2008 about extremely poor Haitians who were baking dirt pies and eating them out of desperation — I could barely fathom that. Is it difficult for us to understand this in wealthy countries? RF: The impact is devastating, especially on women. When families are food insecure it’s always the women who eat last and least. We’re very concerned about West Africa right now — there are 18 million people living there who are on the cusp 6 country-guide.ca
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opinion of famine in some parts of the region. When we see these huge increases in corn prices and the knock-on effect in wheat, soybeans, rice and other food crops, it’s a huge problem. In the African Sahel — that’s the southern transition zone out of the Sahara desert — women will leave their villages and walk out into the countryside and find an anthill. They’ll then jam a stick into the anthill because they’re trying to disperse the ants from the anthill, so they can harvest the grains, weed seed and husks and chaff the ants have stored. They’re doing this so they can feed their kids. CG: With the grain price increases we’ve seen lately, are we then looking at another food crisis looming? Do you expect this to increase pressure to review biofuel policies? RF: We’re certainly concerned about the dynamic where we have these mandates in developed countries like the U.S., Canada and much of Europe that require all fuel to contain a portion of biofuels like ethanol in the mix. These mandates are especially frustrating because if you let the market prevail, oil companies would almost certainly be using more petroleum and less corn, which would moderate the price of food crops. In essence what biofuel mandates do is they take a bad situation, from a food security perspective, and make it worse than it needs to be. As for whether there will be another global food crisis, that remains to be seen, but there are signs it’s coming. Corn prices have increased by 50 per cent and all the other food crops are following them. In many ways the canary in the coal mine here are the feed buyers. They’re frequently among the first to feel the effects, and in this case they’ve been the first to begin to put pressure on Congress in the U.S. They’ve recognized that the cost of their feeds is spiking and that’s going to impact their livelihood. Again, this plays out completely differently depending on where you are and your personal circumstances. In Canada, for example, for most of us it means we might find a steak or pork chop on sale as they reduce their stock — before prices start to climb again. In less wealthy places it might mean meat disappears from your diet because the rest of your diet is now more expensive. In the poorest places it might mean even the grain disappears from your mouth. CG: So what might the solution be? Is it really as simple as removing biofuel mandates and subsidies? Or is it more complex than that? RF: It’s not biofuels alone that’s causing this recent price rise, clearly. It’s mainly droughts and crop failure in the U.S. Corn Belt, and a similar crop failure in Ukraine. The key is that biofuel mandates increase that pressure and competition for food resources at a time when there’s a serious problem with food security. I’m also concerned that we’re moving evermore september 17, 2012
into the dynamic that food is just another commodity. There was an article I saw recently on Reuters that quoted Glencore — they’re the large commodity trader that recently purchased Viterra, though I’m sure you and your readers know far more about that than I do. They were quoted as to how they were anticipating a good year because of these high prices and volatility. There’s certainly lots of volatility and for them that’s good. But I’m far from sure that it’s good for farmers, and I know that it’s not good for consumers. And I know that it’s devastating and even life threatening for the poorest of them. CG: If you had one chance to look every grain grower in Canada in the face and tell them about Oxfam’s biofuel position, what would your message be? RF: I would say that food-based biofuels aren’t a sustainable response to challenges like energy security and climate change. They’re a bad policy that’s distorting the market. Biofuels that aren’t made from food crops might have their place, but when they’re made from food crops they’re destructive and they’re putting lives at risk. I would also encourage them to visit our website and review our policy at (www.oxfamcanada.ca). In my experience farmers make good decisions when they have the facts. CG: So what response are you getting, especially among politicians and policy-makers? RF: Oxfam is raising our concerns with governments around the world. In Europe and the U.S. we are finding lots of support among policymakers for our concerns; in Canada, less so. CG country-guide.ca 7
Machinery
By Ralph Pearce, CG Production Editor
Larger, powerful, adaptable, innovative. These machines aren’t just bigger, they’re built for durability, performance and efficiency, with an increasingly complex array of electronic, monitoring and control options. It’s part of a trend that acknowledges the growing complexity of farming in Canada, together with the demands of larger farming operations. Check out the lineup we’ve assembled in this month’s instalment of Machinery Guide.
case ih steiger rowtrac
challenger mt800c and mt900c
Following the logic of “four tracks are superior to two,” Case IH is introducing its new Steiger Rowtrac, featuring a four-track, positive-drive system that is the only such factory-integrated system of its kind. Built to handle larger implements, the Rowtrac will be available in three models (i.e. the 350, 400 and 450) providing Quadtrac technology for primary and secondary tillage as well as field applications. This new system also uses independent, samesize tracks for more power to the ground with less slippage when pulling large planters and tillage implements. Growers also have greater adaptability and versatility for different cropping systems, with 20-, 22-, 30- and 40-inch spacing options. As with other Steiger models, the Rowtrac machines “boast the boost” with Power Boost extra power, on demand. www.caseih.com
Aside from performance and power, the one focus that their engineers say they aimed to build into MT800C and MT900C tractors is “the Challenger Difference.” Whether it’s the Caterpillar engines that deliver 410 to 585 engine horsepower, or the ability to maintain power while towing heavy loads, or managing the tough spots on your farm, the MT800C and MT900C are built to handle the demands of larger farms. At the same time, engineers strove for a balance of strength with agility to achieve maximum performance with enough flotation to reduce compaction. Time isn’t just money, it also counts for efficiency on the farm, and Challenger says its heavy-duty tractors go beyond in-field excellence with a revised cab that offers greater comfort and easier operation, no matter what the time of day. www.newfromchallenger.com
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fendt 933 scr and 936 scr For Fendt, today’s higher-powered tractors are definitely larger, but the key word that comes to mind with the company’s 933 SCR and 936 SCR tractors is “value.” Value comes in various forms and Fendt offers technologies as standard features, such as the Variotronic electronic control. This device allows the operator complete control of all tractor and implement components, including camera functions, operation documentation and auto-steer functions, all using the touch-screen Varioterminal. Plus, Fendt says the 330-horsepower 933 and the 360-horsepower 936 provide more of what farmers want, including productivity and efficiency, with the utmost value in mind. www.fendt.com
New holland t8 and t9 Whether you choose the New Holland T8 or T9 series for your farm, there are objectives that the company says it designed into both, including “power and productivity,” “lower operating costs” and a commitment to comfort and easy operation. The T8 series boasts a lineup of 330, 360 and 390 engine horsepower, while the T9 series offers six models with a range of 390 all the way up to 670 engine horsepower. When it comes to control, New Holland has gone to the source, asking farmers what they want for throttle, transmission and hydraulics. The result is the Sidewinder II, a control armrest that brings comfort and performance together for greater efficiency and command. www.newholland.com
versatile 4-wd tractors Versatile has a strong brand presence in Canada, committed to the concept that size and dependability matter. In 2012, Versatile offers six models ranging from 350 to 550 engine horsepower with engines ranging from 11.9 litre to 15 litre. Versatile’s four-wheel drive tractors come with either manual or powershift transmissions on most models. The engines are also designed with an Exhaust Gas Recirculation/Diesel Particulate Filter (EGR/DPF), which helps reduce exhaust noise and enhance fuel efficiency when used with the Variable Geometry Turbo (VGT) system. That provides a quieter ride, greater environmental awareness, and still lots of power. www.verstaile-ag.ca
john deere 9r/9rt John Deere is a serious player in large tractors with its 9R and 9RT series, featuring five wheeled models from 360 to 560 engine horsepower plus three tracked models from 460 to 560 horsepower. Each comes with advanced engine control, meaning these tractors can sense changes in engine speed and loads 100 times per second, allowing the engine to instantly adjust its fuel quantity and injection time. Plus the cab combines advanced technology and operator comfort, that help push productivity to a new level. www.deere.com September 17, 2012
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doing More. using less.
A series on being ready for the farming challenges ahead
Maximizing yields requires more than good genetics The basics of crop rotation and proper soil management need to be applied — including in North America
A
few years ago a University of Manitoba soil science professor delivered a presentation of how to grow 100 bushels of canola per acre. He looked at the yield claims of several products and pieces of equipment, added them up, and concluded that if you purchased every one, you could grow 100-bushel canola. His point, of course, was that this was impossible. Once you are already using good genetics and the right basic management practices, the law of diminishing returns starts to apply. The role of good genetics in achieving the yields we have today is well known, as is the need to improve them further. But in a world where higher yields are needed to feed a growing population, is too much pressure being placed on the plant breeders and not enough on the farmers? Are they following those basic management practices? North American farmers often assume that they lead the world in management, but is that the case? It’s hard to argue with U.S. dominance in corn yields, but wheat yields tell another story. The U.S. five-year average wheat yield from 2006-10 was 43 bushels per acre. That’s more than Canada at 40, but most of the U.S. production is winter wheat, with an inherent yield advantage over spring wheat, and grown in an area with a longer growing season and more precipitation. The U.S. average yield is the same as in Ukraine, still faced with the challenges of emerging from the Soviet era. Uzbekistan, in the same position, averaged 66 bushels, and France 102 bushels. Back to the basics Those statistics suggest that in the U.S., many farmers are not doing the basics — fertilization, good soil management and proper crop rotation. In that last regard, many Canadian farmers will admit they are not following recommended practice recently, particularly in following the one-in-four-year rule for seeding canola on the same field. That’s understandable given its high price relative to other crops, but it does mean fewer tonnes grown in total. As the world’s demand for food continues, total tonnes will become more important, meaning farmers may need to take a longer-term view of how to maximize their yields.
caseih.com
AVerAge WHeAT Yields (bu./acre) 2006-10 120 100
102
80 60 40
66 40
43
43
Ukraine
U.S.
20 0
Canada France
Uzbekistan
Source: FAO
That means making the most efficient use of all available resources, including fuel, fertilizer, chemicals and the most important resource of all — soil. Again, some of the basic agronomic principles for maintaining soil health and crop yields have still to be adopted in developed countries, but in the developing countries — where population growth is highest — there is even more work to be done. That will require more than good genetics, but the application of good old-fashioned extension. Farmers in areas such as sub-Saharan Africa have yet to have the same access to public and private extension services, or to farm publications like this one, to learn about the best ways to produce the most crop from a hectare of land. For many of the developing world’s farmers, one hectare is the size of their farm. That old-fashioned extension will need to include ways to adopt new-fashioned technology on a scale appropriate for farmers and their families.
On a farm, there’s no such thing as a few small chores. You need versatile equipment that works as hard as you do. That’s why we offer a family of tractors and hay tools designed with the power, efficiency and versatility to help you get things done. All built for a level of operator comfort that makes those long, hard days a little shorter and a lot more productive. And right now, you’ll find great offers on our full line of Farmall® tractors, balers, windrowers, and Puma® and Maxxum® tractors. To learn more, visit your local Case IH dealer or caseihdeals.com.
©2012 CNH America LLC. All rights reserved. Case IH is a registered trademark of CNH America LLC. www.caseih.com.
BUSINESS
So you think you can market If Canada’s farmers sell two-thirds of their crop into the bottom third of the market, are those sky-high prices just a mirage? By Maggie Van Camp, CG Associate Editor
magine yourself in my part of the country at the end of July. Imagine how the dust swirled around the battered old stake truck ahead of you as it creaked into the elevator and dumped the highest-priced winter wheat of the harvest. The farmer had done what he did every year — delivered and sold at harvest. Meanwhile, you were on your smartphone waiting in line to unload some wehat that you had pre-sold sometime in March — for $300 per tonne less. It’s moments like these that leave you wondering about the wisdom of price risk management, and that make your jaw drop because of the sheer number of dollars you feel like you just left on the table in these spiky markets. It’s the same across the country. In fact, University of Manitoba research shows that the more actively farmers
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are in the market, the lower their average price. It raises a painful question. In today’s volatile market conditions, do Canadian farmers have good enough information or good enough analytical skills to identify profit opportunities? Does anyone? Farmers today are more likely to use more marketing tools and to have marketing plans. The number of agricultural clients with trading accounts has steadily grown for Bert Caputo, CFA and investment adviser with RBC Dominion Securities Inc. in Waterloo, Ont. Caputo thinks the younger generation of farmers is more comfortable with commodity marketing tools, and he believes too that the convenience of mobile communication and Internet information has made it easier for farmers to stay informed and trade on the go. “There’s a wide range of producers
SEPTEMBER 17, 2012
BUSINESS
doing a real mix marketing,” says Caputo. “It varies from producer to producer.” Usually, Caputo’s clients hedge using a combination of pre-sales and options. They consider options and futures marketing simply as complements to other marketing alternatives, and he is seeing more farmer clients using more puts and call options. As a rule, he sees more crop farmers using more put options to lock in a floor price, leaving the upside wide open. On the other hand, livestock producers, primarily hog farmers, are more willing to hedge feed costs by using a call option to protect themselves against rising prices, but still benefit if prices fall. This summer Caputo has seen an increase in volume through his desk. “When prices start to rise, it gets people’s attention,” he says. With volatile commodity prices, there are more opportunities for grain farmers to use puts and calls in their marketing plans, says Caputo. Correspondingly, there’s also more necessity for livestock clients to incorporate feed hedging as a part of theirs. There’s also an essential first step, say market analysts. Whatever you decide on for your marketing plan, you need to document it, and then tell someone — your spouse, your adviser, your accountant, someone — so you’re more obligated to it. Richard Vyn, agricultural economist with the University of Guelph’s Ridgetown campus, is concerned that the unpredictable short market this year can cause some folks to lose sight of their marketing plans. The difference between corn prices in May to the end of July stretched over $3 per bushel and soybeans $3.50 per bushel. “Don’t look at a single year and judge your marketing strategy,” Vyn says. This year you would have been better to wait, but you don’t see many years like this. “Two-thirds of the time when prices are above costs of production in the spring, they go down by harvest,” says Vyn, based on an analysis of corn markets over the last 20 years. Vyn’s research involves running simulation models for various corn- and soybean-marketing strategies to assess how on average they perform in Ontario. The strategies that reaped the highest average prices across all years incorporated short hedges using futures contracts for corn. These strategies returned prices about 30 cents per bushel more than the baseline strategy of fall cash sales. The put option strategies he tested generated returns only slightly lower than those of the futures contracts strategies. In Vyn’s models, making multiple cash sales throughout the year (including elevator storage charges) did not result in significantly higher prices than selling off the combine. Also, his models showed that spreading cash sales out over the year did not actually reduce risk. The statistical variability of returns is greater for these strategies as compared to the baseline, while there is little difference in the probability of generating a price above the cost of production. SEPTEMBER 17, 2012
Recently Vyn has updated the marketing strategies research to include a similar set of strategies for soybeans. This time, the results are a bit different. On average, for soybeans the cash sale strategies with sales spread throughout the year did better than the futures’ contract strategies. A few years ago University of Manitoba economists, Fabio Mattos and Stefanie Fryza, compared how successful actual farmers were at using different marketing strategies. They compared the CWB’s marketing options versus taking the pool price, and found marketing performance using these producer payment options averaged $16.13 per tonne below the pool — based on analysis of 7,400 farmers over six crop years. The researchers compared farmers’ marketing performance using these CWB marketing contracts against the final pool price, ranging from $195.14 Continued on page 14
Short market,
long tail
In 1988, Ed U sset was a pi t trader in Ch when the drou icago ght struck early in June. At th the carry-out e time, situation was much more co and of course mfortable , the almost five billion bu corn ethanol shels of demand didn ’t exist. Any ch U.S. biofuel po anges to licies would be game changing That year, pric . es spiked early and quickly, th they drifted slo en wly lower with some volatility ‘short market . “The has a long ta il’ theory is valid Usset. “It has ,” says held up seven out of 10 times Already this ye .” ar some dem and rationing occurred and has will continue in the month Usset says ge s ahead. nerally South America’s clim more reliable ate is than the north and he’s bank normal crop fro ing on a m those region s. “The three m ost important words for any ducer in the U pro.S. and Canada are ‘forget last he says. “In year,’” 2013 prices will do things imagine but, th we didn’t ey won’t be th e same as 2012 In the wake of .” the massive U .S. drought, st ries are circul oating of farm ers having to contracts or pay out even in quirk y situations ph deliver grain ysically to elevators wh ere that was U ss et re co m re qu ired. m en ds pr e- se lli ng vo lu m es crop insuranc on ly to e production levels.
country-guide.ca 13
business Continued from page 13 per tonne in the 2005 crop year to $372.06 per tonne in 2007. The spread was incredible. Some farmers were able to get $335.99 per tonne above the pool price, yet the worst result was $186.68 per tonne below the pool. “On average, farmers did not have better information or analytical skills to time the market, since they actually received lower prices compared to pool pricing,” concluded Mattos. Although the CWB’s single-desk structure will cease to exist following this crop year, results from Mattos’ and Fryza’s research can be useful in assessing performance of the other marketing tools available through the CWB. Their analysis was based on a summary of actual farmer transactions for Canada Western Red Spring wheat from 2003 to 2009. They focused on farmers who priced CWRS wheat using daily price contract, forward pricing contract or basis pricing contract, and Flex-Pro in at least two of the six crop years. The study showed that the farmers weren’t good at timing the market, yet timing strongly impacted marketing performance. Instead, farmers tended to price their grain just before the middle of the marketing window.
The more volatile the market, the worse that farmers do, the research shows. And being more active in the market is far from a cure Moreover, the farmers in the survey who used more active marketing strategies tended to perform worse compared to those who were less active. Additionally, pricing larger portions of the crop with forward pricing contracts and basis pricing contracts tended to reduce performance. “As they try to be more active and change their strategies every year, farmers are actually trying to time the market and obtain higher prices. The evidence in our study says that being more active led to worse performance,” says Mattos. Other researchers have found no benefits to actively marketing and making decisions based on price expectations and changing every year. In 2004 Cunningham, Brorsen, and Anderson from Oklahoma State University showed using the same marketing strategy every year, regardless of market information, produced better average prices.
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One of the simplest mechanical styles is to always sell at harvest. Anderson advocated a mechanical style of selling equal portions of one-third each in June, September, and November. Interestingly, Mattos and Fryza also found price variability significantly affected marketing performance. The average performance in the year with the most price variability (2007-08) was $83.16 per tonne worse than in the year with the least price variability (2003-04). In other words, it was more difficult to price profitably during periods of high volatility in the market, says Mattos. To manage volatility and uncertainty Ed Usset, grain-marketing specialist for the Centre for Farm Financial Management at the University of Minnesota, believes in keeping the process of marketing in the control of the farmer, not actively chasing commodity markets. “It’s hard to do consistently well with outlook-based marketing,” Usset says. “I don’t let luck influence my approach.” At http://www.cffm.umn.edu/GrainMarketing/Market ingPlans.aspx you can download Usset’s pre- and post-harvest marketing plans for corn and soybeans. He believes marketing plans should be based on price objectives for the farm together with insight into market trends. His key to good marketing is to find a consistent approach that works year after year. “I don’t try to sell the top of the market,” Usset says. “I’ve stumbled on it a couple of times, but I go for good average prices.” Usset also recommends starting marketing plans about 10 months prior to harvest, although he readily admits such a system of early pre-selling a portion of the crop didn’t reap as much this year as those who waited to sell into the peak of the July weather market. However, if you’re going to be wrong, at least you still made money and didn’t lose on the crop. Usset says farmers often build storage for logistical, not marketing, reasons. Removing the delivery bottlenecks allows farms to grow with a limited harvest window. However, having this storage on farm is likely to change how farmers market. “They’ll be more willing to hold grain longer,” says Usset. He’s not convinced that more farmers are doing a better job at marketing or even that the larger farmers are any better marketers. Yet today the stakes are higher, Usset warns. “Marketing problems are more important today without traditional price safety nets. Now you’re on your own.” CG
September 17, 2012
TOOLMAN
Throw out your marketing plan?
By Errol Anderson
t’s time for some straight talk. Listening to some market advisers — including me — may not have been the best medicine this crop year. The disastrous American Midwest drought of 2012 not only shook up U.S. and global grain and oilseed markets, it shook up farmers’ marketing plans as well, and it has certainly shaken a lot of people’s confidence in what they thought they knew about marketing. In hindsight, your best strategy in 2012 might have been to throw out your marketing plan. But who could have known the severest U.S. drought in decades was on our doorstep? When there are major global weather events, there can be years when tossing out the marketing plan might be the strategy that pays off the best. We’ve seen it happen before, and the American drought of 2012 may be another example. What has happened in the U.S. this year is nothing short of a disaster, and the ramifications will be felt for months, extending well into next year. Growers who followed traditional advice this past winter and spring likely sold a good chunk of their production before drought shot prices up. So it begs the question, wouldn’t it have been smarter if you had ignored all the advice and simply held your grain until you got the best price? Before you jump to a conclusion, consider this. If markets go up and never come down, the short answer is that market planning and forward pricing is of little use. But in reality, we all know that this isn’t possible. Markets simply do not act that way for the long haul. No matter how bullish the bull market, it will always have a shelf life. This year the scale of the drought losses is no doubt staggering, and it will be some time before that grain can be replaced. It will be months before new crop production from South America hits the global stream, replenishing export supplies. So you ask yourself, what if Brazil and Argentina suffer production problems? Is this the beginning of short crop after short crop? Is this the beginning of a global food shortage? But that’s looking at only half the equation. One thing markets do very well is to drive substitution and eliminate demand when supplies get tight and prices soar. This will definitely be put to the test in 2013. Industries find a way to survive. The cattle business is a key example. Burnt-out pastures will market cattle more quickly and various types of forage (including corn) will act as replacement. The cattle cycle will eventually repair itself, but it takes years. Grains will as well, but at a much quicker rate. Any major global weather event can make best-laid plans of little use for weeks or even months. So yes, a year like this might mean that the last grower to sell is the one who wins. But no matter how bullish a market is, there will be price setbacks. And the old saying, “expect the unexpected” may haunt us before it’s all over.
September 17, 2012
Despite this incredible bullishness, with any sharply rising market comes an eventual price peak. The sky is not the limit. Higher prices ration demand. It’s a system that works, even in this market. Then, a price correction ultimately occurs. Eventually, prices reach a point where demand is truly rationed or a new global event possibly in the financial world surprises commodity traders. Marketing through volatile times can be highly stressful or extremely profitable for growers depending on how it is handled. No doubt, it’s during these times that prices and profits can really excel. But you have to look at yourself in the mirror. Do you simply want to speculate on unpriced grain? Or do you want to ensure a profit? These are two different individuals. Day-to-day market swings are watched closely by the farm speculator whose goal is to sell at the peak of market prices. This individual calculates the money lost if the top of the market is missed. By contrast, a farm business manager has long-term growth foremost in mind. This is a person who calculates production costs and assesses the cash price needed to cover expenses, and who often includes marketing objectives in the farm’s financial and production plan. The gold standard for grain pricing in my opinion is to maintain a market plan that ensures some form of pricing discipline even during the incredibly bullish crop year we are now in. Prices can go up quickly, but down quickly as well. And without a pricing plan, marketing opportunities may be entirely missed even in the drought year of 2012. Even worse, some growers get caught up in speculative furor adding even more risk to their farm business. Buying futures while leaving grain unpriced in the bin is high risk and a recipe for market losses. This market gamble is fondly known as a Texas hedge. Remember that while the futures market takes no hostages, a savvy marketer can race to the finish line taking advantage of sweet price gains along the way — even if prices will never be at the top without a whole bunch of luck. So, is it best to throw out your marketing plan? Maybe in the 2012-13 crop year, the answer will be yes. Or maybe it won’t. The year isn’t over yet. And what about next year? Well, the answer really goes back to what kind of farmer you are. Are you the kind to bet everything on a hunch? Or are you the kind to manage your way to long-term profitability, which gets us back to the original question. Is it better to throw those marketing plans out this year? You know where I stand. Market plans and pricing discipline always have their place in a well-run farm business. CG Errol Anderson is a commodity broker located in Calgary and authors ProMarket Wire, a daily grain and livestock risk report. He can be reached at 403-275-5555 or email
[email protected]. country-guide.ca 15
SEPTEMBER 2012
Take a New Approach to Farm Business Management
Community strength and marketing insight move opportunity to reality The Huron Business Development Corporation (HBDC), in collaboration with the Huron-Perth Farm to Table Network, recently launched Huron Perth Food Opportunities. This initiative helps local farm families to develop value-added products, niche markets and agricultural diversification strategies. The Huron Business Development Corporation (HBDC) is a not for profit, federally funded, Community Futures Development Corporation with a mandate to help grow the local economy through small business development projects and community loans. Located in one of the richest agricultural regions in Canada, it is no surprise that much of the work of HBDC is centred on agriculture and associated businesses. According to Paul Nichol, manager of HBDC (www. smallbusinesshuron.ca), agriculture brings in more money from outside of the area than any other sector and it employs more than 15 per cent of the workforce. “Our overall strategy for the region is to create a larger market for local products and develop expertise in our farmers so that they can meet the demand as it grows. Our surveys showed that to help them succeed, farmers wanted to learn more about direct marketing to the consumer and value-added production,” says Nichol. “But we are a small group that simply does not have the resources to undertake these things alone. AMI funding helped us to deliver on the needs of our producers and more.” The Huron Perth Food Opportunities initiative received an investment from the Agricultural Management
Untitled-62 1
Institute (AMI) which helped fund a series of farmerdriven, facilitated study groups. Recent efforts have helped to equip Huron and Perth producers to meet the growing consumer demand for locally grown food and regional specialties that complement culinary tourism. The next stage provides farmers with the resources they need to take advantage of production opportunities and marketing structures.
Building Communities Huron Perth Food Opportunities is already showing returns for over 160 local producers that have participated in this initiative in less than two years. Through a series of farmer-driven, facilitated study groups, participants share strategies, develop business plans, build business management skills and identify new market opportunities. In addition, workshops provide knowledge in marketing techniques, customer service, market readiness, time management, as well as what to grow and how to sell to meet consumer demand. These study groups and workshops have led to a number of exciting opportunities for area farmers. • Training in capacity building, organization, marketing and promotion has helped launch five additional farmer’s markets, bringing more locally grown food directly to consumers. • Workshops and winery study tours focussed on establishing and marketing direct-to-consumer
vineyards has led a dozen farmers to initiate a commercial grape growing hub along the Lake Huron coastal shoreline. The long-term view is to create a viable agri-tourism wine route similar to those in the Niagara Region and in Norfolk County. • Bringing business planning, marketing, promotion, customer service, and food handling know-how to the Amish community has helped them to establish a new twice-weekly produce auction with more than 40 sellers participating. Pooled product attracts wholesale buyers and restaurateurs to the auction which recently celebrated its first anniversary. Joan Brady, Huron Perth Food Opportunities project co-ordinator and study group facilitator says, “The power in every program is the ability to streamline them to the participants, and to build one-on-one relationships. Each area and producer is at a different stage in development. It is important that programs and funding opportunities recognize that and don’t pigeon-hole projects at one level. That is one of the benefits of AMI – we were able to prepare a funding application based on what our community needed and AMI responded to that.” Nichol states that now, more than ever, the local population has better access to locally grown nutritious food. “The viticulture initiative along the shoreline offers a brand new opportunity for local wineries, culinary experiences and a tourism structure to support it. For the farm community there are market opportunities beyond the traditional commodity model, and for those producers seeking a different route, HBDC and our partners are there to help them to develop and satisfy those markets.” To learn more about Huron Perth Food Opportunities visit www.huronperthfarmtotable.ca To learn more about how AMI can help you take a new approach to your farm business management visit takeanewapproach.ca, email
[email protected], or call (519) 822-6618.
Marketing for Change When it comes to diversification and value-add Teresa Van Raay and her husband Martin have gone the whole hog − well actually ‘The Whole Pig’ (www. TheWholePig.ca). From their 600 acre farm in Dashwood, Ontario, the Van Raays operated a farrow-to-finish operation for 26 years. Two years ago that changed when they moved to a wean-to-market operation and launched the ‘The Whole Pig’ to deliver high quality pork products directly to the consumer. The Van Raays are savvy business people. They have used a variety of strategies to build their new business, including a website for product details, ordering, recipes, dietary information and more; and a Facebook page and Twitter handle. They have also engaged in more traditional forms of promotion such as radio advertising and seasonal advertorials in local newspapers, as well as creative build-your-own package offerings. “We started by working with people who could help us to develop a business plan,” says Teresa. “Over time, our plan has evolved as we continually look for ways to increase repeat customers and returns.” Teresa also attended workshops offered through Huron Perth Food Opportunities where she was impressed by the energy of the facilitator and gained valuable information for her business. The Van Raays caution others not to over-estimate the reach of their marketing efforts. After all, it was a holiday advertorial that alerted neighbours to their business, Teresa notes. “It showed us that the word about us had not spread close to home and opportunities still existed to sell to the people next door.”
14/08/2012 9:55:57 AM
marketing
More from the market All that talk about “who’s your customer” sounds like so much empty air, except to farmers who are using it to make money By Gord Gilmour, CG Associate Editor he surveys always turn up the same numbers. Three-quarters of farmers feel they’re in the top quarter of good marketers. And there’s good reason for it. Most farmers obsessively watch the grain and oilseed futures. When the conversation turns to the upcoming USDA crop estimates, they know exactly what the smart money is predicting, just like when it comes to the global grain outlook, they can tell you as much about the weather in Australia, South America and Ukraine as they can about the forecast at home. Well, those three-quarters of farmers can’t all be
in the top quarter, and the emerging consensus is that more of the farmers who actually are climing their way into that top quarter are doing it by looking at that word… “marketing”… the way the rest of the world does, to whom it means something completely different than it does on most farms. The tradition in agriculture is to focus almost exclusively on sales, not marketing, they say. Which doesn’t mean sales aren’t important. Price is obviously crucial. It’s just that marketing brings a series of tools and strategies into play in order to reel in the extra cash and the additional lucrative opportunities that the sales focus leaves on the table. Some of these strategies might even work on your farm. Marketing is all about three things; creating demand for your products, building an identity for your business, and finding ways to differentiate your business from the one down the road. “Hold it right there,” you’re probably already thinking. “That’s fine if you’re running a clothing store or selling cars. But we grow commodity crops — emphasis on ‘commodity’ — and you can’t market a commodity like that.” That might have been true at one point, but no longer. Times have changed, and more farmers are finding and developing new opportunities to truly market their products — even some of the largest commodity producers.
Against the grain
For Jim Pallister, value is what a farmer can create on top of price.
18 country-guide.ca
Near Portage la Prairie, Man., Jim Pallister could be called the poster boy for the Prairie commodity grain grower. His Pallister Farms is a large-scale operation easily topping 20,000 acres. It is well known as a grain and “special crops” operation, meaning that in addition to wheat and canola, they produce for slightly smaller, yet still significant, markets like edible beans and other pulse crops. It’s a business model that pretty much any grain grower in the region would be more than passingly familiar with, one where success is based on a laser focus on efficiency, teamwork and the economies of scale. But on the Pallister farm, there is one key difference. That difference isn’t readily apparent in the fields or even in the equipment sheds or in anything remotely like that. Instead, it only becomes apparent when you get Pallister talking about his marketing September 17, 2012
Canadian Marketing 100 Yonge Street, 6th Floor Toronto, ON M5C 2W1
FileName:Comm_AD_Agri_4.5x10_CountryGuideNational Pub: Country Guide National Material Deadline: Aug 22, 2011 Trim: 4.5” x 10" Insertion Dates: Sept 20, Oct. 18, 2011 Colours: CMYK
marketing philosophy (as opposed to his hedging strategy), which gets him spontaneously talking about who his customers are and what they want and need. “Years ago someone told me — and I can’t even remember who it was, so I can’t give them credit — that farmers were the only group he’d ever seen that thought they were the customer both buying and selling,” Pallister says with a shake of his head. He lets the statement sit a bit, and then it becomes clear he doesn’t believe a word of it. Instead, he asks, when you go into the elevator to sell grain, who’s buying your crop? And what do you do to understand that individual’s position and what they need to get from dealing with you? They’re certainly your customer, Pallister says, so doing a bit of legwork to get your head around that might pay you big dividends down the road. What might that look like in practice? It could take almost any form, but at its core is understanding your customer and where they’re coming from. And sometimes it might cost you a few bucks now, in order to better position yourself down the road. “In about 2005, we had a situation where we ran into some production problems and we sold more beans than we produced,” Pallister recalls. “We went to the companies that we had contracts with, and we said to them, ‘Give us a number, tell us what you need,’ and they gave us a number — and then we wrote a cheque.” That wasn’t “write a cheque after a protracted argument” or “grudgingly write a cheque while sulking about it,” it was write a cheque without complaint, in order to build and maintain a better relationship with that valued customer. Did it work? “Eight years later, they’re still talking about it,” Pallister says. “I think it’s definitely had an effect on how they deal with us. I’m certain at times they give up some of their margin because they know they don’t need that insurance built in when they’re dealing with us.” Besides those tangible benefits, Pallister is also convinced the goodwill has translated into other breaks when he’s needed them. For example, it’s not much of a stretch for a grain company to make a delivery of No. 2 CWRS into No. 1 CWRS with some strategic blending at the elevator. Ordinarily that would be Continued on page 20 September 17, 2012
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management Continued from page 19 nothing but gravy for the grain company — but for a valued supplier, one with a proven commitment to stand behind their contracts and work with the company? They might catch a break and find their No. 2 is actually a No. 1.
At Penn State All this is very familar to John Berry, an agriculture marketing specialist with Penn State University. Berry has spent his career looking at the entire gamut of farm marketing, from direct sales off the farm to farmerowned processing. For the commodity grain grower — or producer of any commodity agriculture product — Berry says there may be no better strategy than finding ways to address the concerns of their customers and thereby become more valued suppliers to them. “One of the things I’ve done over the years is spend a lot of time with grain-marketing clubs,” Berry says during a telephone interview with Country Guide. “I’m a member of several, and from the farmers there I’ve learned there are a number of these things that come into play. If the grain from your farm is known to all buyers to be of high quality, you’re going to earn more. If you’ve got a decent driveway and bin yard and a large auger that can fill a truck in a few minutes, not an hour, you’re going to earn more money. If you don’t fly off the handle and you’re decent to deal with, you’re going to get more.”
Reinventing the wheel One of the reasons Berry suggests commodity growers work more closely with their customers is because of the hard and inescapable reality of trying to go it on your own. While farmers might be tempted to build an onfarm processing plant or a flour mill, for example, they quickly run headlong into reality if they don’t also have a plan to somehow differentiate their products from the competition. “Take a pasta plant, for example,” Berry says. “All the other companies are already experts at making pasta, and there’s a significant learning curve. How do you compete against maybe two or three generations’ experience making pasta?” Meanwhile, back on the Canadian side of the border, at Guelph, Ont., Martin Gooch agrees with this statement. Gooch is an expert on agriculture value chains at the George Morriss Centre thinktank and he believes that any farmer trying to move into one of these already established markets is going to have to go in with eyes wide open, or come up with a better plan — like maybe working with these companies to build something new where everyone winds up with a bigger share of a bigger pie. “You can no longer afford, as a business, making decisions based on assumptions,” Gooch says. “You have to look at your customers and ask, ‘What is it they value?’ and, ‘What gives them a real headache?’” It’s in answering these questions that you might 20 country-guide.ca
find the germ of an idea which could put you down the right path of better returns for everyone, Gooch says, quickly insisting that this isn’t a strategy only confined to boutique growers or exclusive grocers. “I’m familiar with one farmer out west who, every year before he decides what to seed or buys his seed, goes and talks to his customers,” Gooch says. “He asks, ‘What issues do you face?’ and, ‘What can I do to address them?’” It’s a brilliant strategy, Gooch says, because it costs the grower next to nothing, gives them valuable insight into the minds of his customers and just by taking the time and energy to do that, they’ve already differentiated himself from every other grower in the area. “Simply by reaching out, he’s already establishing the basis for a better business relationship with that customer,” Gooch says. “It really is as simple as trying to understand their mindset.” Nor should that process stop at the elevator driveway. Farmers can play an important role in driving the establishment of value chains themselves, thus finding ways to build supply chain models that work better for them, Gooch says. Take the example of a relatively small group of farmers in the U.K. “This group of closely co-operating farmers, in conjuction with a miller, went to Sainsbury’s, the secondlargest U.K. retailer,” Gooch says. “They said, ‘We’ll deliver to you a type of flour that will let you bake a really good loaf of in-store bread for your customers.’” The result was a new market for both the farmers and the miller and a key way for the Sainsbury’s chain to differentiate itself from its competition, all the while garnering positive publicity.
Back in Manitoba Back in Manitoba, Jim Pallister says he’s also noticed a fundamental change in the way his customers are doing business. Years ago they were reluctant to reveal who their end-use customers were, for fear they’d get cut out of the equation entirely. “Now not only will they tell us who they are, they’ll bring them right out to the farm so we can meet them and talk to them,” Pallister says. In part he suspects that’s because there’s a growing recognition that a bean canner from the U.K., for example, has no interest in dealing with individual farmers from Western Canada. Instead they recognize that a locally based grain trader brings something to the table, such as local and industry expertise and established relationships. For a grower, though, it’s an invaluable opportunity to connect directly with the final customer and get a fuller picture of what the customer needs are every step down that chain.
Your choices So should farmers really pursue this strategy? Or is there a certain type of farmer that might be more successful? The answer to the first question is an unequivoSeptember 17, 2012
management cal yes, says Gooch, and the first and perhaps most important step for most farmers might be to convince themselves they actually bring something to the table. “Many farmers don’t want to do this — I think they don’t feel they have the confidence to go out and engage in discussions with those down the chain,” Gooch says. “However, I think they’d be very surprised how willing and open the customer is to talking to them.” One tip he stresses is getting to know the companies a bit before contacting them, something he says the Internet is invaluable for. With just a few keystrokes it’s usually possible to find a wealth of information on most companies out there, including what products they produce, where their major markets are and even how they see themselves and attempt to position themselves in the marketplace. Gooch also says it might not hurt to talk to other farmers in other places who have pursued some of these strategies, since they’ll have some insight into just what sort of reception you might expect. It’s also probably not a bad plan to start small with a smaller company, where you can learn a few lessons. “See what you can learn with them, and what you can discover,” Gooch says. “Once you’ve sharpened your teeth and gained some experience, you might go to a larger organization.” But the opportunity is for farmers to get out there and do it, and work incrementally at making this adjustment to the way they do business. “I’ve worked with producers who have doubled their profitability in 18 months,” Gooch says. “They’ve done that by working on this step by step. Now, that won’t happen for everyone, but if they work at this steadily and methodically, it will work, I promise them that.” As for the second question, farmer Jim Pallister says he’s convinced that in modern markets there’s an almost infinite variability and just about any farmer can find a fit, no matter who they are or what they produce. “I’m sure there are people who will say this is only for large farmers — I simply don’t believe that,” Pallister says. “I believe in markets, it really comes down to that, and I think farmers of any size or type can find and develop markets.” For example, Pallister says he doesn’t understand why some conventional farmers resent the successful marketing efforts of organic growers. “It’s not the seller who defines the value of that product, it’s the customer,” Pallister says. “What does it matter to me if they’re sitting in Osborne Village (an urban Winnipeg neighbourhood) paying more than I know the value of that product is? It doesn’t matter a bit.” Pallister suggests thinking of other ways people spend their money they don’t need to — such as young men and their pickup trucks. “They all want the chrome and 300 HP,” he says with a laugh. “Do they need it? Of course not. Does it matter they don’t need it? Not really.” Back down at Penn State, John Berry is nodding September 17, 2012
Value building can be individual, or by groups such as British farmers who built a path straight to Sainsbury’s shelves his head. If anything, Berry says, he’s seen far more success on the smaller scale for these strategies, though he quickly urges all farmers to at least consider them. Says Berry, “We really are only limited by our own imaginations.” CG country-guide.ca 21
BUSINESS
THE STORAGE QUESTION Storage fundamentally changes a farm. Now, take-charge producers like Jeff Shea are finding new ways to sort out, which way should they go?
PHOTO CREDIT: DAVID CHARLESWORTH
By Maggie Van Camp, CG Associate Editor
22 country-guide.ca
SEPTEMBER 17, 2012
BUSINESS
t won’t surprise any farmer in this country to read that Canadian farmers are building their on-farm storage capacity to its highest levels ever. Nor will farmers be surprised to hear why. Start with the combination of stronger farm cash flows, stir in extreme volatility in the markets, then add the logistics involved in running today’s larger, high-productivity farms, and it just looks like a decision that has got to be right for virtually any farm. From the road, on-farm storage is looking like a smart strategic asset, particularly in the new free market for wheat, barley and durham. It also looks like a global competitive advantage for Canada as a whole, which in turn has got to parlay into a stronger farm sector. “Canada is the only main exporting country that has massive on-farm storage,” says Morley Ayars, regional farm business management specialist for Saskatchewan Agriculture. Still, there are lots of other ways to invest in farm productivity. You could buy land, lease a bigger tractor, build a new shed, or go for any of a hundred different upgrades. To take a harder look at the wisdom of on-farm storage, I went to Shea Farms in southern Ontario, a farm we chose because of the way it has tried to benefit from on-farm storage in multiple ways, all at the same time. And it’s true. You won’t find any second guessing about on-farm storage here. Today Shea Farms grows about 2,000 acres of corn, wheat and soybeans at Watford, halfway between London and Sarnia. The Sheas also do some custom work and Jeff runs a successful seed and fertilizer supply business as well.
Their total storage capacity of 140,000 bushels has been a work in progress since 38-year-old Jeff came home to farm. “The best investments we’ve made in the 20 years I’ve been farming are tile drainage and bins,” says Jeff. “I tried to max our yields first, then built the bins.” Indeed, when Jeff looks around at their dryer and storage, what he sees is how the addition of each piece of shiny steel tells a story of trying to make the most of tight markets, setbacks and growth. But you have to look a little harder to see exactly how broad that impact has been. For Jeff, Tom and Kathy, their commitment to on-farm storage and drying has been a game changer. With storage, they can grow new crops and certified seed, and they can also invest their own sweat equity for lower handling and operating costs. By avoiding elevator bottlenecks, they’ve also been able to expand acres while building their ability to sell into high-demand markets. For Jeff, the bins have become a marketing tool. “Not having to sell at harvest has changed the dynamics,” he says. “It puts more control in your hands.” In other words, the Sheas believe their farm is utterly different with the bins. Of course, the story goes both ways. If bins made the farm stronger, the Sheas’ strengths made it possible to get the most out of the bins. That’s because the bins also tell the story of the Sheas’ stubborn, unbridled passion for farming. In the end, it’s that passion that may be the real key to making a bin system pay. So maybe the question is, Do you have that passion too?
ADVANTAGE #1 More crops, more markets
PHOTO CREDIT: DAVID CHARLESWORTH
W
hen the Sheas built their first bin in 1995 it was to store special foodquality soybeans that are exported to the Pacific Rim to make products such as tofu. At the time, buyers were willing to pay premiums approaching $2 per bushel for winter delivery. Two years later, that market changed, the premiums dropped, and Jeff began using the bin to store certified seed. Having bin space allowed the Sheas to expand their crop portfolio. In fact, they still find that on-farm storage opens the doors for storing seasonally purchased crops, and they find too that it can be a huge help in niche
SEPTEMBER 17, 2012
crops with limited buyers, where the ability to control the timing of your sales can be pivotal. Nor is that true only in the East, or only for steel bins. “Grain bags have really changed the dynamics (of on-farm storage and marketing),” says Brenda Tjaden Lepp, co-founder and chief analyst of FarmLink Marketing Solutions. She sees more temporary storage with her customers in regions where renting is more common, and where the farms are larger and the crop mix is simpler, such as canola, oats, wheat and barley. Continued on page 24 country-guide.ca 23
business
Monitor bins by smartphone By Maggie Van Camp, CG Associate Editor
A
new web-based bin-monitoring system that can be accessed by smartphones is now on the market. Calgary’s Mifarm.ag Management’s system uploads real-time data on grain bin conditions to a cellular network, to help farmers better protect their crops from spoilage and theft. Sensors located in bins monitor grain volume, temperature, and relative humidity, as well as control fans. The system also uniquely monitors grain levels to warn of theft, an increasing threat. Instead of buying and installing the system, you sign up for a three-year contract and Mifarm provides the service, including the cables and relay system. This costs about $0.12 per bushel over three years and includes service. Every 15 minutes the sensors give a reading and within 10 minutes you get an alarm by email. Mifarm president, Gary Gunthorpe, says the company started installing systems this summer and recently installed a 400-sensor system in a 30-bin storage facility. The information is communicated by cloud-based database that farmers can access via web portal and smartphone applications on both Rogers and Bell. “Our cellphone modem is higher and more powerful,” said Gunthorpe when asked about cellular dead zones. “It has four times the power of your cellphone.” The development work started in September 2010 with three partners. Delta T Engineering, ATI Agritronics Inc. an instrumentation company from Saskatoon and Cervus Equipment, a large publicly traded company owning the largest group of John Deere dealers in Canada. Recently, the federal government loaned $750,000 to Mifarm.ag Management Inc. to help commercialize this grain management technology. The project forecasts the manufacturing and installation of 300 systems in 2013 and thousands more by 2016, and will create 15 full-time positions in the process.
24 country-guide.ca
Continued from page 23 Grain bags have also been a good solution for larger-than-expected yields, or for crops that require storage but are only grown once in a three- or four-year rotation, like oats. In 1997, the Sheas put up two more 9,000-bushel bins, enough for 100 acres of wheat or 200 acres of soybeans, the two crops that are traditional on this flat, heavy-clay land. Having three bins, naturally let them consider a third crop, and they started growing corn. That same year, Jeff came home from attending DuPont’s Young Leaders program in the Midwest with one word on his lips — ethanol. From listening to other participants, he knew corn demand was going up. He could also see yields going up, thanks to bio-
tech traits including glyphosate tolerance. Although corn prices at the time were far from stellar, Jeff saw long-term opportunity. It was an insight that was bolstered by his work as a DeKalb seed dealer and former Monsanto sales representative, where he could see exceptional corn growers in his area starting to really make progress with corn. That’s when Jeff added the dryer. “When times are tough is when I build bins,” says Jeff. “These bins are built for $3 corn, not $6 corn.” In fact, Jeff doesn’t like the risk of storing corn when prices are high and the threat of prices going down weighs heavily. Although the Sheas core all their bins and have heat cables, he’s also well aware of the potential of spoilage.
Advantage #2 Avoid harvest marketing
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ver the years, Jeff has used his storage to avoid selling off the combine when harvest-time supplies were strong. His first lesson in the power of patience came with his first bin. At harvest some of his wheat graded as feed with greater than 10 per cent sprouting (another challenge in Ontario’s damp climate). Jeff stored that wheat until the end of the winter when he knew supplies were tighter… and the same wheat graded #2 with a healthy premium over feed. A few sales like that can help pay for the bin, Jeff says. Jeff leverages his stubborn streak with some good market information. In 2003 the Sheas added 50,000 bushels storage and at the next harvest corn was only $2.80 a bushel. Jeff filled the bins and held… and held… and held. By September corn finally got to his sell point of $4. It’s during market downtimes when having bin space really pays, says Jeff. When prices dipped two years ago, the Sheas built a 60,000-bushel bin. “In the summer of 2010, I still had 90 per cent of 09’s corn stored, and then in August I bought all our 2011 fertilizer,” says Jeff. “Corn was $3.75 per bushel in the fall and by June it was $4.40.” However, Jeff adds that it doesn’t always work to his advantage.“Sometimes my dad says I’m too in love with the grain…”
A major player in Ontario’s grain sector agrees that marketing from on-farm bins takes judgment. Anyone who operates grain-handling facilities needs to clearly understand their costs and know that storing grain will not always be a good marketing strategy, says Wes Thompson, president of Thompsons Limited in Blenheim, Ont. “Get either of these principles wrong, and profits evaporate.” Commercial elevators use storage for their own account only after careful analysis, says Thompson. “Generally, one in four years, storage is a waste of money.” In 2010, storing grain for a sale later in the year was clearly a winning strategy, but in 2011, storage looked like a mistake by the end of the winter, although the Midwest drought later turned that situation completely around. The lesson, says Thompson, is that it can be hard to predict the returns to storage, and it’s impossible to guarantee that storage will pay for itself in any given year. For wheat, Tjaden Lepp also takes a cautious approach, recommending partial sales and then holding some crop for sales into early 2013. “Some pricing before harvest is a good risk management strategy,” says Tjaden Lepp. Continued on page 26 S e p tember 1 7 , 2 0 1 2
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“When times are tough is when I build bins,” says Jeff Shea. “These bins are built for $3 corn.”
Continued from page 24
Advantage #3 Physical instead of paper hedge
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n-farm storage can also restrict your marketing opportunities. Commercial delivery often means growers can sign basis contracts, for instance, and elevators also offer forward contracts out more than one year, something most end-users do not offer. There’s also a price discovery trigger within this system. “Commercial elevators always have a price for grain in storage, whereas end-users may, or may not, be offering a price,” says Wes Thompson. Although Jeff Shea follows markets daily, he’s not comfortable holding a call or put option. He says the fees with options are too costly, especially in years when the margins are tight. Instead he prefers to sell physical grain in increments rather than using options or hedging with paper. The cost of storing is balanced by the confidence that still owning the physical crop gives him in his marketing decisions. “Not that I always get it perfect but I follow the advice of sources I respect — a market report from Missouri, the Van Trump Report, my wholesale fertilizer dealer and the folks at DeKalb,” says Jeff.
26 country-guide.ca
Jeff also listens carefully for indications that the time may be right to sell, and over the years has seen some patterns develop. “If the Cargill buyers call, there’s likely four or five days left in the price. If they’re trying to shake some grain loose, it’s a good indication that things are getting there.” One advantage Jeff sees in having his own storage is the ability to balance basis against his actual storage costs. Current basis spreads were adding up to only about $0.05/bushel/month to carry. “$0.25/ bushel to store it from harvest until June is telling us not to store corn,” says Jeff. “Besides, Dad’s happy when they (the bins) are empty.” Markets are changing constantly so it’s difficult to compare the validity of basis versus storing. “Carry charge strategies are only one layer of marketing decisions,” says Tjaden Lepp. “Basis contracts are not a good risk management strategy.”
Continued on page 28 September 17, 2012
Soil Management Matters Responsible soil management is a priority for the Innovative Farmers of Ontario (IFAO). The benefits are important. Crop yield stability is greater through bad weather years. It is essential for long-term sustainable production. It is important if clean water is to leave our farm fields. To achieve these benefits we need to focus on soil moisture management, soil health and the protection of soil structure. Soil moisture, too much or too little, is the first limiting factor in crop production. Early precision farming work confirmed this. On most soil, drainage of the crop root zone is important. Only enough water should be removed to create a healthy environment for crop roots and soil life. At that point it is wise to apply moisture conservation practices as a hedge against drought. These practices include less tillage and careful crop residue management. Both contribute to increased organic matter and that improves soil water holding capacity. Soil health is a huge contributor to soil productivity. Indicators of healthy soil are abundant and active populations of worms, bacteria, fungi and many other creatures. Tillage is their greatest enemy. Soil life should be fed at every opportunity through the use of crop residue, manure and cover crops. Soil life contributes to aeration and drainage and also enhances nutrient retrieval, particularly for phosphorus. Healthy soil is complex and has an ecosystem of its own where every part matters. Soil structure must be protected through improved crop decisions and reduced field activity. The goal is reduced compaction and improved soil stability. The outcome is healthier crops and cleaner water leaving fields. Tillage damages soil structure in addition to reducing organic matter and destroying soil life. Good soil managers understand that soil is like a living mass where everything is connected. It responds to care and can die with abuse.
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business Continued from page 26
Advantage #4 Lower handling fees
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n average their bins cost the Sheas about $1.25 to $1.50 to build. That doesn’t include the augers, legs, overhead bin or propane dryer. Two years ago the Sheas doubled their drying capacity. Now that they’re growing 500-plus acres of corn, the payback also comes from lower drying and handling charges. Automatically filling the dryer means it can run through about 800 bushels an hour. The overhead bin and legs cost a total of $120,000 but make unloading, drying, and loading much more time efficient. They can load out grain in multiples of three and blend with the same load-out pipe. The blending gains are similar to those at commercial elevators. Lost interest and bin depreciation or bag costs for grain bags popular in Western Canada are major additional costs and should also be included. Last winter, Morley Ayars, regional farm business management specialist for Saskatchewan Agriculture, compared total average bin cost per bushel for various storage systems, including required unloaders, augers and carts. Used and new bins averaged about $3.83 per bushel for hopper bottoms and $2.45 per bushel for flat bottoms. Grain bag setups averaged $0.94 per bushel, plus $0.34 per bushel annually. When calculating costs, farmers usually only include the direct capacity per-bushel capital costs and not the labour and operating costs of doing the work themselves, says Ayars. However, in the Prairies there’s a trend toward building hopper bottom bins instead of covering the costs of shovelling out flat-bottom ones. “Farmers in Saskatchewan are struggling to find good-quality labour so they are investing in capital instead of labour,” says Ayars. The clear benefits of on-farm storage occur when a farmer has lower operating and capital costs than a commercial elevator, plus the commercial elevators requirement for profit, says Thompson. On top of the capital costs of construction, elevators also consider their opportunity costs, the operating costs like labour, propane and electrical,
opportunity costs and shrink loss incurred through drying, handling and spillage. “On-farm drying may appeal to some farmers, but commercial drying is nowhere near as profitable as many farmers think,” says Thompson. Each delivery to a commercial elevator is adjusted to the exact correct moisture level so there’s no additional shrink from drying or handling. Unlike a commercial grain company, most farmers don’t include their own effort involved in managing and building storage when they look at P&L numbers. For the Sheas, no budget is big enough to include the planning they put into their facilities or the stress of dealing with problems. In 2004, when using the overhead bin and legs and dryer for the first time, the overhead bin collapsed due to faulty engineering. Fortunately no one was hurt. Unfortunately, the insurance company wouldn’t cover the damage because it wasn’t due to fire or weather. The Sheas had to go through the energy-sucking process of litigation to get a proper settlement. However, some of the paybacks of having their own storage and dryer are unaccountably soft. His dad enjoys running the facility and his parents built a beautiful home on the yard site. They can blend to meet quality requirements, making the most out of their crops. Also, increasingly important has been their ability to give their sharecropping partners a break in handling, drying and storage fees. It’s helped build long-term relationships. Although Jeff has plans to continue to expand storage, he’d like to install his own scale first in order to save trips to town for weighing for his sharecroppers. With land prices in Ontario increasing astronomically, Shea Farms’ future growth may be tied more strongly to sharecropping and renting. “Farmers are getting older, and if they’re not carrying any debt and prices are good, they’re having the time of their lives right now,” says Jeff. “Why would they quit? Instead sharecropping is a good option for them.”
Advantage #5 Break the bottlenecks
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voiding lineups at the elevator is another advantage of having your own storage. This added efficiency is worth a great deal when your harvest window is limited. With all three members of Shea Farms working at off-farm jobs and only one full-time employee, much of their harvesting is done at night, yet the local elevator closes at 7 p.m. The efficiency of not having to wait in line to unload has made a huge difference, allowing 28 country-guide.ca
the Sheas to expand their cropping acres, Jeff adds. The harvest window in this part of Ontario can shut rapidly as they’re prone to November streamers coming off of Lake Huron. It’s called the Snow Belt for a reason. Additionally, heavy fall rains on this clay notoriously bog down combines and trucks. Says Jeff, “Storage allows us to farm the way we want to farm.” CG September 17, 2012
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ost readers already know Ralph Pearce, among the best and most insightful corn and soybean writers in Canada, and you’ll have recognized his byline in recent issues. With this inaugural Corn Guide, Ralph is now helping us establish a new focus on the decisions you make to integrate technology with your business objectives for exceptional overall farm results. It has never been more important to produce every bushel, or more important to capitalize on your opportunities. Let us know what you think.
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[email protected] Ralph Pearce, Production Editor,
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Cornguide
Rethinking tillage and plowing Lessons learned from 2012 By Ralph Pearce, CG Production Editor
Corn Guide, September 17, 2012
T
he temptation was to say that it was a one-off. The early-April windstorm that swept out of the north last spring picked up clouds of topsoil and year-old corn leaves and turned the air brown in a way we haven’t seen in Ontario for over two decades. Now the question is, was it really just an anomaly, a once-in-a-generation fluke caused by a warmer-than-usual winter? Or is it a harbinger of what’s to come as global warming strengthens its grip? Either way, it was a storm to get the whole province taking a fresh look at whether we’re making the right tillage decisions, or whether our compromises are setting us up for big trouble in the near future. Do we need to change our approach to plowing and how we manage crop residues? The challenge is that for any farmer, the answer will rarely be a simple yes or no. Multiple factors are involved, each with its own specific roles. Crop prices, market demand, the effect of the drought on world corn supplies, changes in equipment designs, improved genetics, pest control… you name it, they all play into the decision-making process.
Pressure to rebound American farmers will be under extra pressure to rebound from their dismal 2012. Word is now filtering into Ontario that one seed company is concerned about poor germination of their U.S.grown seed corn intended for Canadian fields, while another dealer is reminding growers that “we’ve emptied the warehouses” in the past two years. There is also speculation that U.S. growers may be heading to the fields next March with an expectation — whether it’s realistic or not — of planting 100 million acres just to rebuild stocks. Nor are the Americans alone. Lots of Canadian corn growers have struggled through 2012 too, and every farmer wants another chance to sell at this year’s prices. Now, all of that is going to put pressure on farmers to rethink their tillage, says certified crop adviser John Waters. In turn, that means more acres getting plowed. Waters is a believer in reduced tillage. “There’s no question, we need to figure out how to keep more residue on the ground,” says Waters, who works with Lakeside Grain and Feed in Forest, Ont. “In 2011, Continued on page 4
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Continued from page 3
we had really heavy spring rains, and one grower I know had corn stalks and leaves floating across his lawn and driveway. Had his land been plowed, it would have been topsoil on the move, not leaves.” Still, Waters deals with a number of growers who opt for the plow-and-till approach, and some have done their own field research. One grower in particular divided one field into thirds, using deep tillage, strip tillage, and a third area that was conditioned with a mouldboard plow. “In the end, it was the mouldboard plow that paid the bills,” says Waters, adding that the purpose of the experiment had actually been to confirm to the farmer that there was an advantage to strip till. “He was disappointed to see the results, and he wasn’t just looking at it on the yield monitor, he had scales on the grain buggy too.” Steve Hosking also concedes that some plowing is often essential, especially considering that Bt corn stalks can take as much as three times longer to decompose, and can be a challenge to plant into when left on the surface. At the same time, Hosking, the territory manager for Sunflower Manufacturing, acknowledges that farmers themselves can be resistant to change. “Some guys just can’t sleep over the winter if their fields aren’t black,” Hosking says. “It really is sort of a mindset, and I’m not so sure that the younger generation has that. It may pass with the older generation.” Going long term For years, dedicated no-till farmers have made presentations at conferences and workshops, extolling the virtues of the practice and always stressing the need to commit to reduced tillage for the long term. Years ago, one dedicated no-tiller told attendees at a meeting of the Innovative Farmers Association of Ontario (IFAO) that if they were looking for a one- or two-year return on no till, they were likely to be disappointed, but the balance sheet will look different if you give no till five years, and in 10 years it will look better again. Farmers this year are understandably struggling with a lack of patience. But Don Lobb isn’t buying that as a justification. In fact, he disputes much of the oftcited research that supports tillage or plowing or a combination of the two. A 4
longtime no-till farmer, consultant and frequent speaker on the subject, Lobb acknowledges that no till is a tough sell to most farmers, regardless of rotations or soil types. However, he contends that the research that supports tillage is usually flawed in its fundamental approach. “Before giving value to tillage comparison research, we need to ask questions,” says Lobb. “What was the tillage history on the comparison site? What was the final plant population on each tillage practice being compared? How was nitrogen applied? How was the crop residue managed? What was the crop sequence in the tillage comparisons? Were cover crops used? How were they managed? The list of questions goes on!” A valid comparison of no till and tilled production must be done on a “system” basis, where every component of the system is fine tuned, regardless of the tillage practice being compared, Lobb believes. “In the long run, tillage can’t win because it destroys soil structure, soil life and organic matter,” says Lobb. “On complex topography, it causes up to 10 times more soil erosion, and this needs to be factored in to tillage assessments.” Lobb makes this claim without hesitation, and lists researchers and teachers including Jill Clapperton (formerly with the Canadian Agriculture Department) and Murray Miller at the University of Guelph, both of whom promote the advantages of no till from the perspective of improved soil health, and the benefits of mycorrhizal and fungal activity below the surface. And there are many farmers across the province who can and do make no-till management work on their operations. In fact, Lobb is one of those who made it work more than 25 years ago. “I did about 16 or 17 years on that, where I had side-by-side comparisons, and pretty consistently, I had higher yields with no till, not lower ones,” Lobb says, noting that University of Guelph, Ridgetown Campus field tests have shown much the same result. “If you try no till this year and it doesn’t work for you, and you quit because of it, that doesn’t mean it doesn’t work. That means it didn’t work that time on that site.” Part of a total system One of the stumbling blocks may be the perception that no till is a single cog in the management wheel. Not so, says Adam Hayes, soil management specialist with the Ontario Agriculture Ministry.
Like Lobb, Hayes admits he gets a little frustrated when no till gets criticized for causing yield lags and for taking too long to produce positive results. Hayes notes that farmers look for ways to justify tillage or plowing instead of focusing on the real job — residue management. Unfortunately, the default treatment is to do some form of tillage or plow the whole field under. “Residue management actually starts with the combine,” says Hayes, citing Marion Calmer’s presentation at the 2012 IFAO conference in London, Ont. Calmer spoke of the unique design on his combine heads which tear apart the discarded stalks, enabling decomposition to begin sooner. “He’s really thinking about it at the start,” says Hayes. “Then tillage can come, with a range of coulters or a chisel or a disc. Then there’s the planter or the drill, which helps prepare the seedbed, clearing residue and allowing good seedto-soil contact. We’re thinking of only one aspect, and that’s not the best approach.” Hayes also recognizes that climate change will present some ongoing issues for growers unless they start looking to improve soil health. It’s not just dry years that pose a problem for growers, but flooding and water erosion too. In the winter and spring of 2009, there were three one-in-50-year storms within a fivemonth period in southwestern Ontario. “Our erosion control practices need to consider those one-in-50-year storms,” says Hayes. “Without residue cover, growers are leaving their soils wide open. And climate change — with more intense storms — is another issue. We can’t just fall back on the old practices.” The bottom line for this debate may actually turn out to be a lot closer to home. It may be a matter of attitude. The common theme for a lot of producers, whether they’re growing a four- or fivecrop rotation, no till or conservation till, or continuous corn, is finding the system that makes it work. Hayes knows of a farm family from the Dresden, Ont. area who has poultry manure trucked in from the Niagara Peninsula, which they apply to their wheat stubble. Another grower from the Dunnville area is working with no till and controlled traffic practices. “He’s only had two inches of rain yet his crops look good considering,” said Hayes in midsummer. “He must be doing something right.” CG Corn Guide, September 17, 2012
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Continuous corn the new norm? For growers like Larry Lehrbass, continuous corn looks like the right decision By Ralph Pearce, CG Production Editor
C
hange has been right at the heart of agriculture in the past 20 years, and the bigger the change, the better. There’s been no till, there’s been the launch of GMOs, there’s been the arrival of GPS technology. And through it all, corn has remained king. Could the next big change be the one practice that we were sure we would never go back to? Could we be heading back to continuous corn? In a word, the answer is “maybe.” And the reason is, because corn isn’t the same crop that it used to be. This time, the peak cycle in corn prices is coming at exactly the same time that more GMO hybrids with corn rootworm protection are proving themselves in the field, and companies are catching up with seed demand. Plus, with so many experts calling for a long tail to this year’s drought market, there’s more interest in shelling out the extra dollars for the high-tech traits. Besides, the long-term market outlook seems so bullish, even a down cycle looks like it would see corn prices stay above what used to be considered market highs at the turn of the millennium. Market rumblings now suggest that in part because of continuous cropping, U.S. corn growers may plant 100 million acres in 2013, although much will depend on precipitation levels over the next six to eight months. Farmers there already have considerable experience with continuous corn. So the question now is, will the practice come to Ontario — or to be more historically accurate — will it come “back” to Ontario? For Lehrbass, it’s economics “I’ll keep growing corn unless something tells me that I can’t,” says Larry Lehrbass, a grower with a nice patch of loamy soil in the Alvinston area west of London, Ont., where he also has a small beef operation.
6
For the past four years, Lehrbass has been a continuous corn grower, a decision he made based on the poor performance of wheat and soybean crops on his farm. “My soybean yields were going down, wheat looked good but it was almost more straw than grain,” says Lehrbass. “With my soys, it’d get white mould, with fields that would look like 60 but yield only 30 (bushels per acre).” For Lehrbass, the decision to go with continuous corn was an easy one, and since making the switch, he hasn’t seen any significant challenges, year to year. Unlike some other continuous corn growers, Lehrbass manages today’s big residues by plowing in the fall, and he does conventional work on the ground in the spring as well. With that proviso, however, he finds he can manage continuous corn with only a few simple tweaks to his normal program. For instance, Lehrbass grows triplestack hybrids and uses a little more nitrogen relative to one-year corn, and his weed management program relies heavily on glyphosate, to which he has added a pound of atrazine. With that package, his yields have increased in the past three years, although the conditions each of those years were different, so Lehrbass is hesitant to key in on any one practice as the most important factor. Back to the future Continuous corn certainly isn’t new. Widely used in the 1960s and into the ’70s, it looked like a great choice on paper, especially when you considered that rotation options such as soybeans weren’t nearly as strong as they are today. Even then, however, it can safely be said that most growers realized that continuous corn wasn’t the best long-term agronomic practice. “We did a lot of things then that we do not have to do now,” says Pat Lynch, independent agronomist. “We plowed Corn Guide, September 17, 2012
strength through enhanced genetics and more research and knowledge enabling growers to do a good job at planting, the percentage of continuous corn in Ontario remains small compared to the trend in Illinois or Indiana. Blair Freeman, area agronomist with DuPont Pioneer, agrees that while there is interest in continuous corn, Ontario isn’t very likely to see the same percentages as in the U.S. Midwest. “There are some growers who maybe have targeted fields where they’re growing continuous corn,” says Freeman, agreeing that there are instances and conditions where such a practice can and will work. “There are many factors at play in cropping decisions. We can grow wheat in Ontario, as an example, which they can’t grow in some of the ‘I’ states. Ontario growers have many more profitable cropping options than some other growing areas. These are helping us to extend rotations, and keep yields of all crops up over the long term. So I don’t think we’re destined for the same corn after corn after corn that you’re seeing right now in the U.S., but that’s probably a good thing, too.”
deeply, and then because of that, we worked the ground four or five times, often with multiple secondary tillage tools. It wasn’t uncommon to have a cultivator pulling a harrow and a roller, and that may have been the last trip after three previous trips. All of this led to a breakdown of soil structure and resulting poor emergence and lower yields.” Today, that kind of tillage parade is no longer necessary. Greater efficiencies in Corn Guide, September 17, 2012
tillage management mean growers can incorporate corn stover with minimal passes in the spring. Lynch points to growers who can make one pass in the fall using vertical tillage on their cornstalks, and then a single pass in the spring to build a seedbed. And thanks to enhanced designs, many corn planters can handle the task of planting into higher residues. Yet despite the arrival not only of better equipment but also improved stalk
Management with a big “M” Continuous corn may not be making a sweeping comeback, but then the conditions under which it can be grown successfully are quite specific, and those who do grow continuous corn, and do it well, are well known for their management practices. According to Lynch, soil type is the biggest factor to consider, and having a livestock operation attached to the farm is another benefit. “There are a lot of producers who have farms or fields with different soil types,” explains Lynch. “For those producers, they could grow continuous corn on their silt loam soils but only one-year corn on heavier soils. The last three U.S. corn yield champions set the record on fields that were continuous corn, and they were all silt loam soils.” Lynch knows of one grower in the Harriston area who has a beef operation on a silt loam soil who does well with continuous corn. Still, there are some continuous corn growers who insist on adding residue manContinued on page 8
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Cornguide Continued from page 7
agement to their system. That step often utilizes a reduced-till scenario with a planter configuration that keeps the seed row clean. “Back in the day, when continuous corn was very prevalent, we pretty much said that if you didn’t have mouldboard plowing in the operation, your odds of getting it to work slid off the end of the table,” says Greg Stewart, corn lead for the Ontario Agriculture Ministry. Now, he has revised his thinking. In fact, when you consider the tremendous root production of a high-yielding corn crop, and then combine that with the crop residues that can protect and feed the soil surface, continuous corn can become, says Stewart, “a soil-building rotation.” Stewart also agrees with Lynch that compared to the 1970s or ’80s, there have been advances in vertical-tillage tools that help make continuous corn work, as well as planters that do a better job of keeping trash or residues out of the row. “You could walk a continuous cornfield in conservation tillage in the 1980s and see all of these plants that were
8
“I’ll keep growing corn unless something tells me that I can’t.” — Larry Lehrbass behind because they didn’t get planted just right, or because there was a cornstalk in the seed trench or a stalk laying over top of the seed,” says Stewart. “You’d see these plants that inherently were not doing as well, and they dragged the whole continuous cornfield down.” Today’s corn on corn On most farms, however, continuous corn may not be the only — or even the best — way of getting more corn into the operation. Instead, more farmers are looking at lengthening the conventional three-year rotation of corn/soybeans/wheat to a four-year plan by adding a second year of corn at the start. “There are areas that are growing more corn on corn than have in past years, for economic reasons, and there are agronomic reasons, too,” Freeman says, adding that with the current pricing structure, some growers are simply choosing between
a 170- or 180-bushel corn crop versus a 30or 40-bushel soybean crop. “It’s definitely easier to do with the traits we have today,” says Freeman, also pointing to the tillage and planting equipment that can do a quality job of getting the crop into the ground in a hurry. In the past, it was generally accepted that a second year of corn would automatically translate into a yield lag or into higher disease pressures, but Lynch notes there are some management factors that can help maintain yields. For starters, most secondyear corn crops need more nitrogen. That second-year crop should also be a hybrid with corn rootworm resistance. “We do not want to go back to using rootworm insecticides like they are in the U.S.,” says Lynch, adding that weed control is another issue facing growers with another year of corn in the rotation. “Typically, there is a minor weed shift in second-year corn, and annuals are worse, especially grasses.” CG
Corn Guide, September 17, 2012
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Cornguide
At last, here’s a drone with enormous farm potential By Ralph Pearce, CG Production Editor
I
n a farm sector where commodity prices seem to be shooting skyward, here is a new remote sensing device that may have equally high-reaching potential. The SwingletCAM unmanned aerial vehicle (UAV) is one of many relatively new designs being used in Europe and North America. But this particular UAV holds several advantages for agriculture, and early reviews say it shows enormous potential. Colloquially known as a “drone,” the SwingletCAM may look simple in its design and construction, but its insides are incredibly complex, as is its capacity for data retrieval. In fact, the Swinglet may put drone technology exactly where GPS technology was when the first yield monitor was wired into the first combine. Right now, ag drones are in their infancy, with normal image (RGB — red, green, blue) cameras mounted on them, but with NIR or near infrared capability also available. Felix Weber has always been intrigued by precision farming. For 20 years, he farmed on Highway 86 near Listowel, Ont., on an operation that he grew from 300 acres to 1,000. In 1992, he began using his first yield monitor, well ahead of the general learning curve on the technology. “After four years, I started to layer those maps, and realized the value,” says Weber, who is also a consultant and is now based just outside of Palmerston. “I made money with the yield monitor without the maps. But then when I started to layer the maps and started to soil sample based on the zones that I produced out of those layered maps, I realized the value of what this could bring, and then I started to manage the land differently.” Since then, Weber has been looking 10
Off the ground for ways to increase efficiency and productivity, and not just on his own farm but on others as well. Shortly after he started layering and soil sampling, he became interested in using satellite imagery as a means of improving a farmer’s operation. But the delay and lack of accessibility under cloudy conditions made that process more costly than he could justify. It was then that he began to explore the potential with UAVs, travelling to Europe to examine the two models he’d been researching out of many. “When I saw it, I knew this was it,” recalls Weber, noting how he was attracted to its simplicity and quick access, all with high precision. “That really sold it for me, right there. Everything has its advantages and disadvantages. You can have a light plane, very compact compared to a big bird that flies very fast. The difference is your limitation of weather and when you can fly. I can fly in up to 28 km/h of wind, which is a fairly strong wind, and after that, it starts to get shaky.” If Weber were to go to a faster-flying unit, it would have to fly higher, so he’d need a better camera to capture the samequality image with improved stability. But then, at a higher altitude and faster speeds, there are other disadvantages. How it works The SwingletCAM packs a lot of capacity into roughly four feet of specialized Styrofoam. With a GPS receiver, a three-axle gyroscope and a computer chip contained within its control system, it can be connected to a Windows or a Mac computer via a simple USB port. It weighs only 500 grams (just over one pound), yet is durable enough to last through landings on asphalt, on gravel or canola stubble. When the machine is
activated, all electronics are automatically checked, and the barometric pressure and wind speed, the ailerons, the flight plan, the GPS and the gyros are tested by the computer. It’s one of the unit’s many safety features, and is similar to a pre-flight walk-around check that pilots perform on single-engine and smaller multi-engine planes. Other safety features include a wind warning, which will sound for Weber at ground level, and will return the plane to him within a 30-metre radius of its launch point. He also must preset a flight plan into the computer. Without entering that plan, the SwingletCAM simply will not fly. With both the RGB camera that came with the unit and the NIR camera which Weber purchased after, the goal is to determine crop health by studying the crop’s foliage, based on differences in the level of reflection of light within the crop. Another key in the SwingletCAM’s capacity is its calibration. According to Weber, everything requires calibration to be effective, including yield monitors, the Greenseeker, and the SwingletCAM. “I can look at the data afterwards of the difference within the field and go to certain spots in the field to see what it is,” explains Weber. “Does that mean that I have insects, do I have nutritional deficiency? And sometimes you’re looking for something very specific or you can choose the time to look for something specific.” Back to scouting Weber is also clear that just because he has images of a field, and just because they are GPS referenced using computer software that stitches together the images from across an entire field, that doesn’t mean he can manage his crop from a desk. He still needs to ground-proof. But now he knows exactly where and when to look. Corn Guide, September 17, 2012
“It’s an image, it’s one tool in your tool box,” says Weber, who is now the exclusive Canadian distributor of the SwingletCAM. “Too many people think this is going to replace Greenseeker, that it’s going to replace crop scouts. But each tool has its advantages and disadvantages.” Greenseeker can produce extremely high resolution, since you basically pull the cameras through the field on a spray boom. It can also allow farmers to make on-the-go rate decisions with fertilizers or crop protectants. More applications SwingletCAM can’t produce the same accuracy. Nor can you link it directly to an applicator to make on-the-go rate decisions. But SwingletCAM lets you keep an analytical eye on the crop without dragging a boom through the field, and it lets you cover more acres much faster. Weber can take an early image in spring of wheat to look at the density of the crop. But based on the images that come up on the screen, he can’t be certain whether it’s wheat or weeds he might be looking at. If he uses the images to go into the field for a closer inspection, he can get a better idea of how to address the situation. “If it’s weeds, in my herbicide application I may apply a higher rate in the higher weed-pressured areas,” says Weber, adding that he and farmers can address specific issues in specific areas of the field. Where insect pests are an issue, SwingletCAM can isolate the damage, it can help determine what areas are above or below the economic threshold for treating, and it may even be able to help the grower choose the right pest control. In the end, that means higher economic yields with lower costs, and superior profitability. The applications are obvious but they’re also expanding. With this technology, there’s more information that can be generated, then layered and analysed. Field density, weed density, overall crop health plus drainage maps, insect pressure — the diversity of the information continues to grow. The colour differences in the images provide the information from above and the GPS referencing process points the way to the area of the field that needs the attention. With that capability, perhaps the sky really is the limit. CG Corn Guide, September 17, 2012
At just over one pound, the drone packs a GPS system, an internal gyroscope, and several camera options.
Launched low over the field, SwingletCAM creates instant images of crop health and progress. Then it only takes a USB port to upload them into a laptop to create a field action plan.
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Cornguide
Y-Drop corn nitrogen It’s a new name to watch. Y-Drop technology is raising hopes it will boost corn yields and also improve nitrogen efficiency By Ralph Pearce, CG Production Editor
W
hen GPS technology was introduced in Canada in the mid-1990s, the primary focus was the yield monitor. Sure, there was talk about variable-rate fertilizer applications, but that all seemed futuristic. For right now, the ability to finally measure exactly how well our crops were yielding, spot by spot, was the real driver. In a way, you could say that it shows how short sighted we can be. More charitably, though, GPS technology sparked great waves of innovation, some of which are only showing up now. In 2012, GPS has expanded into precision farming, auto-steer, and even applications that are paving the way for automated combine and grain-cart unloading. But the uptake of variable-rate technology (VRT) hasn’t achieved the same brisk pace. Greenseeker technology, for instance, has been around since the mid2000s, but only now is it gaining in prom-
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inence, and according to some sources, more so in the U.S. than in Canada. Now, however, the introduction of a first-in-Canada fertilizer and inputs applicator may push us a little faster up the technology adoption curve. The Y-Drop can be operated independently with standard rate selection but seems to have a natural fit as a companion to the Greenseeker system. At present, there are three Ontario-based principals involved in the project, including Paul Raymer from the Farm Office in Tavistock who is the distributor of the Greenseeker and Y-Drop technologies, William Miller who is a consultant and a Perth County farmer who’s an innovator and a leading proponent of getting the Y-Drop and Greenseeker systems to work in concert, and Don Good of Good Crop Services from New Hamburg who is the early adopter of the trio. “From my perspective, the Y-Drop is an important part of the adoption pro-
cess,” says Miller, who also serves as president of the Perth County Soil and Crop Improvement Association, and is involved with several other farm organizations as well. “Yes, the technology is fairly new to Ontario, and crops have been good, commodity prices have been excellent, so there hasn’t been the strongest drive to move to these new types of technology.” Most growers know about Greenseeker technology, which is essentially a sensor that “reads” plant health based on light reflective technology. It is mounted on a sprayer boom at varying intervals and, when calibrated with a standardized test strip, will apply fertilizer or other inputs according to the sensor signal. Greenseeker is getting adopted faster in the U.S. in part because so many counties and states there are imposing limits on the amount of nitrogen that farmers can apply. That could happen here too, says Miller, but he’d rather see growers look at the technology as a way of maximizing profitability, not for meeting potential government regulations. To look at the Y-Drop, it doesn’t appear to be that sophisticated. It’s mounted as an attachment behind the spray boom, in this case on a RoGator. The piping off the boom drops down roughly four feet then branches into a Y-shaped pattern to two drag hoses at ground level. When paired with the Greenseeker technology in corn, the hoses
Corn Guide, September 17, 2012
place nitrogen in a stream within two inches of the corn plants, as opposed to having it broadcast into the canopy or drizzled between the rows. “We’re getting it placed in a better area, so we should be able to get better uptake by the plant and end up getting a lot better response,” says Miller. Paul Raymer has been following Miller’s progress and has been working at making the two systems work better together. Raymer has also been comparing results with one of the Greenseeker developers at Oklahoma State University, where researchers have also been looking at the benefits of laying nitrogen closer to the plant. “The differences they’ve seen in yield responses have been significant,” says Raymer. Then Raymer asked what he sees as the natural next question. If laying the nitrogen beside the corn plant creates a yield boost, can variable-rate technology be used to get the optimum yield boost per dollar of nitrogen input? The answer from Oklahoma was quick. In theory it should work, said the U.S. researchers. “But we don’t have the numbers.” Now, provincial and federal researchers here and from the University of Guelph as well are showing strong interest too. For Miller, it confirms what he has already come to believe. In terms of agronomics, the environment and his own farm’s bottom line, the Greenseeker and Y-Drop system provides a unique opportunity to fine tune applications in his corn and his wheat. And this may only be the beginning. Now, government researchers are also looking at the Y-Drop system for applying potassium sulphate in soybeans, and phosphate at planting in corn. CG
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13
Cornguide
The new WeatherCentral system opens up a future where weather knowledge is a business tool By Ralph Pearce, CG Production Editor
Corn Stage
CHUs Required
Estimated Date
VEEmergence
166
May 9
V1
239
May 14
V2
317
May 19
V3
399
May 22
V4
525
May 27
V5
623
June 1
V6
716
June 6
V7
822
June 10
V8
910
June 13
V9
1008
June 17
V10
1099
June 20
V11
1208
June 24
V12
1339
June 29
VT - Tassel
1493
July 5
R1 - Silking
1633
July 10
R2 - Blister
1949
July 21
R3 - Milk
2234
July 31
R4 - Dough
2480
R5 - Dent
2824
August 23
R5 - Maturity
3170
September 7
14
August 10
Weather business W e talk about the weather, we complain about it, and it’s always a concern on the farm. No matter the time of year, if you’re farming, you’re watching it — certainly on a daily basis, but often right down to the hour or even more continuously than that. Planting, spraying, harvesting, storage — they’re all tied to the weather, as are the thousand jobs in between. The challenge especially in Eastern Canada is the lack of a weather service capable of providing weather forecasts and weather records that are both in depth and large scale. They need to be in depth, such as on a township basis or even more specific than that, because as any farmer can tell you, weather can be a remarkably local phenomenon, breaking down into microclimates based on factors such as local topography or proximity to large bodies of water. Yet the weather service would also need to be large scale, so it covers enough ground to help a significant number of farms. Indeed, with our farms getting larger and larger, it can even need a fair amount of scale just to help a single operation. Relying on urban-based forecast models and broad-view prognostications is often superficial, at best, and is usually unreliable for making key decisions on when to plant, spray or harvest. Enter Weather INnovations Inc. (WIN) and its ever-expanding WeatherCentral system. Based in Chatham, Ont., WIN is already well known among those in the crops sector for its SPRAYcast, DONcast and WHEATcast models. Last May’s launch of an array of upgrades to www.WeatherCentral.ca marked the onset of a new generation of data analysis and information supply. By accessing the WeatherCentral system, growers can register each field to receive site-specific crop heat unit (CHU) and grower degree day (GDD) calculations. Then, by inputting a planting date and the corn hybrid, they can also generate a table that predicts the crop staging for that field. Everything from VE (emer-
gence) to VT (tassel), right down to full maturity (black-layer) is included in the table. From there, growers can use the maturity date, key in their desired moisture level in the corn, and another feature, the drydown date prediction tool, will calculate a forecast date for harvest. The 2012 harvest season will be the first time farmers can use the new corn tools, so there’s considerable anticipation as summer turns to fall. When it was introduced last spring, most growers in southern Ontario had already planted their corn, thanks largely to a warmer-than-normal winter and drier-than-normal spring. But growers in eastern Ontario and Quebec had the opportunity to use the system right from the start, tracking their fields for the entire season. The other advantage to this system is that it is never “finished.” New fields can be registered, or the data used on existing fields can be enhanced using retrospective figures. And there are other features that are currently in the works. “Users can add as many fields for as many different crops as they want, and it all shows in the ‘My Fields’ dashboard view, and for each field, you get a custom-tailored forecast,” says Ror y Sweeting, the communications and marketing co-ordinator with WIN. “It has maximum and minimum temperatures, anticipated rain, and you can choose from a daily view or an hourly view — and the hourly view actually has quite a bit more information.” To start, growers can input a field using GPS co-ordinates, a 911 address or the interactive Google map contained within the site. Users must register for this type of in-depth data analysis, but Sweeting emphasizes that only general information — name, location, email address and postal code — are gathered, and are never shared. “The beauty of our programs is that through sponsorships, we don’t charge individual farmers for the use of the tools,” states Sweeting. “With the number of weather stations required, the larger corporate sponsors really help to Corn Guide, September 17, 2012
make things easier. The goal is to provide the service to farmers on as broad a level as possible.” More diversity, more fields Steve Twynstra, owner of Twilight Acres, north of London is one of those larger-scale growers with fields all over Middlesex County in southern Ontario. There’s the home farm near Ailsa Craig, another plot of land southwest of London and another southeast. Spread out as he is, he’s had to make decisions in the past that may have been less informed than those he can make based on the analysis he can access now. Twynst r a has been using the Corn Guide, September 17, 2012
SPRAYcast and DONcast systems for several years. Although the corn growth stage calendar and the drydown date prediction tool are relative newcomers to the menu of features that Twynstra uses, his familiarity and his increased farm efficiency with SPRAYcast and DONcast made the choice of becoming a weather “partner” with WIN much easier to make. “Being able to use the SPRAYcast model — I use that significantly — and the DONcast model gives you a little better feeling of what you should be doing, even though we’re still groundproofing everything with a CCA,” says Twynstra. He concedes that working with the newer tools for tracking crop
staging has come with what he calls a few “growing pains,” but overall he’s pleased with the results thus far. “Being able to measure the heat units by field will help us decide on field harvest schedules, because we put the actual hybrids into the table and it’s tracked all by planting date,” Twynstra says. Will it be accurate enough? Twynstra points to recent experience. “When emergence was happening, we found it was pretty close to what the model was forecasting it should be.” During previous years, there was a little more guesswork to determining which fields were ready for harvest, but using this new system from WIN provides Twynstra with more detailed and more accurate information on which to make better decisions. And that is particularly important with fields at almost opposite ends of the county. “This is the first year, so I have to defer some opinion until we get a year under our belt,” says Twynstra. “But it looks very promising right now, being able to look at when the crop is supposed to black-layer for a specific hybrid in a specific field, and relate that drydown capability.” The WeatherCentral system is sponsored by Bayer CropScience and Pride Seeds, and runs with the participation of more than 40 so-called “weather partners,” each with fully equipped weather stations in their fields. That level of participation entitles the users to a few program enhancements. For example, as a partner, Twynstra can monitor more precise precipitation levels on his farm, and he can access that information even when he’s on the road. The use of the growth stage calendar and the drydown date prediction tool has also given him the confidence to build a new on-farm storage unit. “We’re hoping that this year, we’ll be able to put some corn directly into storage and bypass any dryers,” explains Twynstra. “It’s very real for me because we did this forecasting at the end of June, or early July, before we got into this dry spell, and as a result, we’re putting up another 1,500 tonnes of storage. And I never would have been able to make that business decision with the degree of comfort that I have without having the WIN model or access to it on the Internet. CG 15
Cornguide
Can air seeders do for corn what they’ve done for canola and wheat? By Ralph Pearce, CG Production Editor
S
hould your next corn planter be an air seeder? According to some manufacturers in the seed equipment business, it’s possible. But don’t bet the farm on it. Opinions are definitely split. The primary concern seems to be all about what you as a farmer would be comfortable with. It’s expensive for machinery makers to open a new market, just to watch other manufacturers come flooding in if the experiment succeeds. And right now, it’s fair to say that few farmers are clamouring for air technology in corn, especially in Eastern Canada, where corn growers have historically favoured the precision and accuracy they get from a planter. While it may be true that the seed industry is moving more towards bulk sales, with more tote and truck options that would seem on the surface to favour air seeders, the confidence that farmers have in conventional planting technology means that they’re finding more ways to make bulk work with older hoppers. Besides, there may also be a concern about the physiology of the corn seed relative to soybeans or wheat. Anson Boak is marketing co-ordinator for Salford Farm Machinery, based in Salford, Ont., southeast of London. He notes that Salford has been conducting limited trials using the company’s doubledisc air seeder to plant corn in twin rows. At this point, they’ve had some success with the tests but, says Boak, the demand just isn’t there. “One of the reasons we’re not pursuing
16
Air seeding corn it heavily in Ontario is that we just don’t believe we can change people’s opinions that they must have a seed singulator to plant corn,” says Boak. “We’re not about to try to convince people to farm in a different way,” Boak says. “It’s pretty set in the industry. But for those with an open mind and with an eye on profit first, and not the yield plaque on the wall, we’re ready to help them out.” Boak does acknowledge that some growers are trying air seeders for their corn. However, to his knowledge, no one has sold their planter yet. “Seed spacing is the issue, but there’s research to support that you overcome that at certain populations,” Boak continues. When you boost populations to today’s high numbers, plants are packed closer together than ideal even if you have accurate spacing, Boak says. Instead, Salford is testing its air seeder in twin rows set 7-1/2 inches apart on a 30-inch centre, with the thinking that this will make within-row spacing less of a factor. Western perspective Even in Western Canada, where corn is being grown on an increasing number of irrigated acres and where air seeders are more the norm, there is still a reluctance to move away from the peace of mind that comes with a planter. Some of that can be put down to seed and plant physiology. For years, researchers and extension personnel have talked about the resiliency and “forgiving nature” of
soybeans and even wheat. According to research, soybeans can suffer 60 per cent loss in a stand but still reach 90 per cent of the expected yield index. And wheat is as hardy a plant as there is, with the capability of throwing tillers to make up for a lessthan-perfect stand. But corn is very particular, and Jason Hardy, field marketing specialist with New Holland and Flexi-Coil, agrees with Boak’s assessment that the demand is for planters with seed singulators. “Corn is unique and these guys prefer using their planters,” says Hardy. “It’s not to say that, in terms of accuracy, we can’t get the seed out there with the product — and you’re going to get fairly consistent seed placement. But these guys in the corn areas, they’re pretty particular about seed placement.” Hardy does add, however, that “we do have a large number of customers on soybeans who are moving towards air seeders and air tanks.” Hardy says there are farmers who are looking at convenience of an air seeder, even though they aren’t yet ready to give up their planters. If they could have the best of both worlds, they’d be ready to make the move. “That’s what you may start to see, where those two worlds start to come together a little bit, like disc drills,” says Hardy. “The truth is,” says Hardy, “there’ve been some guys successfully growing high-yielding corn out here, and now we have those guys looking at planters.” CG Corn Guide, September 17, 2012
SPOTLIghT ON CROP ADVANCES Crop Advances is an annual report that summarizes applied research projects involving the OMAFRA Field Crop team, in partnership with commodity groups, industry and the OSCIA. www.ontariosoilcrop.org/en/resources/cropadvances.htm
Disease knowledge helps maintain corn quality in Ontario By Lilian Schaer Regular survey for the presence of corn diseases and pests can help farmers and plant breeders adapt to emerging trends – as well as protect and grow markets. This is particularly important for seed corn production, where Ontario is a recognized leader in North America, producing high yields and high quality. “These surveys help give us a benchmark and assist in minimizing risks and losses to Ontario and Canadian corn production from diseases and pests,” says pathologist Albert Tenuta, Field Crops Program Lead with the Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA). “We’re always on the lookout for new endemic diseases or new invasive pests so we can help maintain productivity and quality – and with that, maintain the viability of the industry.” How was the research conducted? OMAFRA, in conjunction with Agriculture and Agri-Food Canada’s Ottawa corn breeding program, has been surveying Ontario and Quebec to identify and record the distribution and severity of various corn diseases and insect pests already present, as well as any that may be new. In 2011, 120 fields in Ontario and 45 in Québec were surveyed. The survey is being repeated in 2012. What did the survey find? Northern Leaf Blight, the most common leaf disease in Canada in 2011, showed spread to more areas in Ontario and Quebec. In fact, 95 per cent of fields surveyed showed Northern Leaf Blight.
Certain strains may be starting to bypass some of the resistance genes that are available in many commercial corn hybrids. Gray Leaf Spot continues to spread in Ontario each year. It has become epidemic in southern Ontario as the predominant leaf disease in many fields. Common smut infection, especially on seed corn fields in Southern Ontario, was frequent, as was Head Smut found in Eastern Ontario and Québec. So far, Goss’s Wilt, a pathogen that continues to spread in the U.S. Corn Belt, and has recently been confirmed in Michigan and Indiana, has yet to be found in Ontario. “When it comes to seed corn or commercial production, Ontario can compete with anybody in the world on high yield and high quality,” says Tenuta. “That’s a testament to growers, companies, government extension and everyone working together to maintain the viability and economic development of this industry.” Where can I get more information? Results from the first two years of the survey are available in the Crop Advances report at http://bit.ly/NcEPYu. Outcomes from the 2012 crop year will be available there in February 2013. How was the research funded? This project was funded in part through the Farm Innovation Program, a federalprovincial-territorial initiative, and by Seed Corn Growers of Ontario, Dow (Hyland Seeds), Maizex, Pioneer Hi-Bred and Pride Seeds. OSCIA assisted with communication of research results.
ONTARIO SOIL AND CROP IMPROVEMENT ASSOCIATION
Northern Leaf Blight was the most common leaf disease in Canada in 2011. All photos courtesy of Albert Tenuta, OMAFRA
Top three things growers should know about corn pests and diseases Know what’s out there. Having an understanding of what the diseases and pest insects are out there can help breeders ensure the best genetics are available to reduce potential losses. Every field is different. Every field is unique and should be dealt with on an individual basis; there is no single method that will work across all corn acres. Anticipate change. What might work this year may not work the next. Consider the long-range weather forecasts but also know your field histories to make sure you act accordingly when it comes to variety selection, residue management, crop rotation, seed treatment and crop protection. Gray Leaf Spot has become epidemic in southern Ontario as the predominant leaf disease in many fields. Goss’s Wilt continues to spread in the U.S., but has not yet been found in Ontario.
Mission: Facilitate responsible economic management of soil, water, air and crops through development and communication of innovative farming practices
www.ontariosoilcrop.org/default.htm
Cornguide
#PestPatrol with Mike Cowbrough, OMAFRA
Seed-placed starter delivers
Ontario research shows that wheat starter delivers an average 7.5 more bushels. Add in better winter survival and a more uniform stand... and you have an agronomic no-brainer Prepared by Field Crop Unit, Ontario Ministry of Agriculture, Food and Rural Affairs
S
tooped over a seed trench late at night, squinting through the beam of a flashlight at dark-grey soil, Alan McCallum still doesn’t doubt how worthwhile starter fertilizer is for a wheat crop.
In fact, McCallum figures if he doesn’t see grey fertilizer in the seed trench, it’s worth putting the brakes on winter wheat seeding no matter how ominous the forecast or how late in the fall it is. In his mind, starter fertilizer is that important. McCallum is a crop consultant in Elgin County and recommends starter to all his clients, including when he helps his brothers plant winter wheat. “One of the main problems we’ve had with starter fertilizer also ends up being the best way to prove to ourselves that it’s worthwhile,” says McCallum. “When the primary fertilizer hose on the air drill gets plugged, it’s not hard to tell where it happened come spring. You see a marked difference in the maturity of the wheat.” 18
Some of the plot work McCallum and his brothers did a few years ago showed a yield response of up to 19 bushels per acre on lower-testing clay soils. On old pasture ground, where you tend to have lower background phosphorus levels, the yield response can be even greater. That’s what Ontario cereal specialist Peter Johnson sees too. “Seed-placed starter fertilizer, on average, can produce a 7.5-bushel yield increase,” Johnson says. Johnson always tries to put in a test strip without starter in his trials. In the spring of 2011, winter wheat planted the previous fall with no starter fertilizer would have been ripped up because of poor winter survival. “In the rest of the field, the stand with starter fertilizer was essentially perfect,” he says. “Starter fertilizer increases winter survival and crop uniformity.” At a wheat price of $7 per bushel and phosphorus at $800 tonne, the payback is obvious, says Johnson. The economics of adding starter are better in this environment than when phosphorus was $600 and wheat was $4 per bushel. Liquid versus MAP Johnson has done experiments with liquid fertilizer. He put down boards over rows of wheat and found that if you’re only applying 2.5 gallons per acre of liquid fertilizer, you might as well save your money. “The problem is that with that low a rate, you’re getting a drop here and drop there, so there’s a whole bunch of seed going down with no phosphorus,” says Johnson. “Maybe if we had more even distribution it would make a difference. When we go from five gallons Corn Guide, September 17, 2012
to 10, well five gallons is OK and 10 gallons does a pretty nice job.” Liquid fertilizer is good and convenient, but expensive. If you’re set up for liquid starter fertilizer already, Johnson suggests trying five gallons of fertilizer with five gallons of water to reduce costs but maintain good distribution. Adding sulphur and zinc to phosphorus in a starter fertilizer, such as through the MESZ product, doesn’t do much on winter wheat, says Johnson. He says sulphur appears to disappear over the winter. If you’re set up for dry starter fertilizer delivery, Johnson says 50 pounds of MAP is good, but 100 pounds, of course, is better. When looking at rates it depends on your equipment capability. McCallum and his brothers have been using the same mix for years — basically 9-43-10 blend comprised of 83 per cent MAP and 17 per cent potash. “There’s nothing magic about that at all, but we feel a little potash in the trench isn’t a bad idea,” McCallum says. “It’s a source of potassium early on and a little bit of that chloride may give us some disease protection. The downside to including potash in the blend is that it’s a salt and a bit more corrosive on our equipment.” Johnson says that based on just two years of data, potash on wheat is less important than on corn and soybeans. But he says don’t drop potash to zero. Equipment Challenges Starter pays. No question. But anyone who hasn’t invested in an air cart in the past 10 years will tell you feeding wheat at planting isn’t the easiest job. “When they first built seed drills every drill had a fertilizer box on it,” says Johnson. “We realized how efficient it was to put starter with seed rather than broadcasting it all over the place.” But by 1998, fewer than 10 per cent of growers had fertilizer capability on the drill. “Everybody wanted big and fast and convenient,” says Johnson. “The ability to do it fast mattered more than the ability to do it right.” Growers also got away from starter because it’s hard on equipment. For all kinds of reasons, an air cart is the simple answer. Newer air carts have a split box with a compartment for seed and another for fertilizer. Most are made of plastic now, which doesn’t rust. Air carts allow blending of fertilizer at a reasonable amount — 100 pounds of MAP with wheat seed for excellent response. Corn Guide, September 17, 2012
If you don’t have an air cart and just a single box drill, you can blend the phosphorus and seed while augering everything into the box. It’s harder to be accurate with rates using this method. “It works but it’s a pain,” says Johnson. “The easy answer is buy yourself an air unit and mount it on the drill. It costs a little more than a liquid kit but you’ll pay less for fertilizer and it will last just as long. It’s a simple way to get back in the game and not rust the drill out.” McCallum and his brothers run dry starter fertilizer through a John Deere 1850 air seeder with a commodity cart towed behind. “It’s very standard, run-of-the-mill equipment,” says McCallum. “It’s plumbed so that material from the front tank and back tank can go into the same slot.”
How it works Starter fertilizer
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tarter fertilizer convinces a wheat plant that it has enough nutrients to push out more til-
lers than it otherwise would. That’s important, because each tiller can produce a head and more grain. Phosphorus is the main reason wheat responds to starter fertilizer. It’s critical to wheat metabolism for photosynthesis and respiration. If there is plenty of phosphorus nutrition, the wheat thinks it has a high yield potential and pushes out
The most common frustration running starter fertilizer through an air cart is plugged tubes. “Fertilizer quality is very important,” says McCallum. “The less fines the better. When we get into metering rolls, a little chunk of fertilizer fines can wreak havoc.” Blockage monitors on an air seeder will howl if one tube is completely blocked. But with McCallum’s setup, because it’s just a blockage sensor and he’s running two different products through the tube, one primary tube might be blocked at the metering roll but seed is flowing through fine. “If we’re blocked in one primary outlet that’s a sixth of the drill width,” he says. “If you aren’t checking it you won’t notice any problems. We have to stop every so often and make sure a mix of seed and fertilizer is coming out at every row.” McCallum and his brothers would like to get individual monitoring on each tank. That way they’d at least know they have material flowing through each of the primary hoses. CG
more tillers. Dave Hooker, field crop agronomist at the University of Guelph’s Ridgetown campus, says tillers produce 50 per cent of wheat yield. “If wheat can maintain tiller numbers, then it can maintain yield potential as well,” Hooker says. “If the plant is short of phosphorus and it thinks it can’t maintain tillers, it will start to abort tillers in order to favour the main stem.” Most yield-forming tillers are made in the fall. Some tillers will start to form before freeze-up but fail to develop, making it very important to use starter fertilizer if wheat is planted late.
Have a question you want answered? Hashtag #PestPatrol on twitter.com to @cowbrough or email Mike at mike.
[email protected].
19
Because of you, Pioneer® brand seed is planted on twice as many farms and twice as many corn and soybean acres as any other seed brand in Canada. But we don’t take our leadership role for granted. We take it personally. We know serving growers is a privilege, not a job. We believe that leadership comes with a responsibility to work smarter and try harder. So we don’t stop at good enough. Or better than last year. And neither do you. That’s why together, we’re breaking barriers in yield, knowledge and success on your farm.
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09/08/12 3:24 PM
business
Outlook on corn prices Buyers need North American corn and they’re ready to pay us for it. So what are those clouds on the horizon? By Philip Shaw orn producers have been enjoying some good times. Prices have been buoyant especially since the advent of ethanol and the birth over the last few years of the demand-driven market. Now, those good times may get even better, thanks to the worst drought in over 50 years in the American Corn Belt and prices soaring to record levels in late July of 2012. So, as we peer into the future, you can almost hear the corn planters being dragged out of their sheds before the combines even start rolling this fall. The world wants our corn and Canadian producers are certainly poised to provide it. Crop prices are obviously a major factor in building the momentum for corn going into the planting season of 2013. But let’s remember that price isn’t the only thing that corn has going for it. Corn has other advantages, which scream out over other grains when it comes to those planting decisions. Modern corn hybrids have had traits placed within them that fend off pests and consistently produce higher yields on a relative basis compared to soybeans and other grains. This trend continues, and in turn it is adding even more optimism to the crop, helping explain why Ontario farmers planted 2.3 million acres in 2012. Where do we go from here? It surely will be a long story because the devastating drought of 2012 completely changed the market for corn not only in Ontario, but in the United States and in the rest of the world. Coming out of the South American drought in the winter of 2012, the world needed big U.S. crops to maintain global ending stocks. However, that didn’t happen. The USDA in its August 10 report said the United States is set to produce 123.7 bushels per acre of corn this year, down from the 166 bushels per acre they predicted on March 30. This was what in the trade is referred to as an “unexpected Tuesday,” which arrived in June and July of 2012. Nobody saw it coming. Certainly the market was unprepared. The 2012 U.S. crop had gotten off to an early start and looked very good in the early spring, with the USDA reporting in its June 29 report that 2012 corn acreage would be 96.41 million acres. Then, a once-in-a-half-century drought chopped 43 bushels per acre from the March estimate. With corn being abandoned and going for silage because of the devastating drought, the harvested September 17, 2012
acreage will surely be reduced further. It is scorched earth across the American Corn Belt, and it raises several questions as we move ahead. What will be final yield of the U.S. corn crop in 2012? As August wound down, 123.7 bushels per acre seemed high, with many prime corn-producing areas like southern Illinois looking at yields under 100 bushels per acre. If yield goes lower, will prices go higher for old crop and new crop as we look into 2013? Or, will demand be destroyed, both in the short term and the longer term by these higher corn prices? Already, wheat is being substituted for corn at every junction to reduce costs. And what about the non-commercial speculative interests who pump millions and millions of investment-fund dollars into agricultural commodity markets, helping drive prices to their current highs? How reliable is their participation? Will the continuing debt problems in Europe drive the fund money into U.S. treasuries, boosting the value of the U.S. dollar, which is always negative for commodity prices? And what will the weather do? That is always the ultimate question, the great equalizer in 2012. The record prices that corn made in July of 2012 have been a great boon for people who have corn. It surely gives the industry hope. However, will the effect of these high prices be to encourage more production next year? Or will super-high prices simply destroy demand to a point where supply and demand ultimately find a new balance? We could already see a potential warning signal by looking at demand for corn in the late summer of 2012. With corn prices rising, demand for corn stagnated and then fell off fairly dramatically. For example, since the initial USDA estimates in May, demand has fallen for corn in three major categories, with feed, exports and ethanol falling 25, 32 and 10 per cent respectively. Total corn demand has plunged 18 per cent. That’s almost one of five corn cobs which were projected to be produced in the United States early in 2012, a huge hit on demand. As well, North America’s high corn prices are a loud market signal to other nations which can produce corn. While it’s true that in Ontario, corn acreage will be held back because of the likely increase in wheat plantings this fall compared to 2011, the globally higher prices for corn will encourage production in South America, Continued on page 30 country-guide.ca 29
business
Continued from page 29 Ukraine and other corn production regions. At the same time, wheat will be substituted for corn whenever possible, further stabilizing the price of corn. Simply put, the 2012 drought in the U.S. Corn Belt combined with the higher price of corn will see production shifts throughout global agriculture. If the 2012 run-up in corn prices was the result of a perfect storm of news all coming at the same time, we also shouldn’t forget the key driver is still U.S. ethanol policy and the American renewable fuel standards (RFS). They are the major reason for the huge increase in corn demand from ethanol. Nor should we underestimate that demand. Ethanol usage has fallen 500 million bushels this year, down to 4.5 billion bushels out of a total crop of 11.225 billion bushels. Even with that decrease in demand, however, ethanol still represents 40 per cent of the corn grown in the United States. With corn prices having run up to record levels this past summer, there has been much talk of the suspension of the renewable fuel standards by the American government to facilitate lower prices for the food and livestock sector. That is the biggest black swan or unexpected Tuesday that could hit this corn market from left field. If this market wakes up one day and learns that the renewable fuel standard had been suspended, the price of corn will drop precipitously into a new lower price range. That 4.5 billion bushels, representing 40 per cent of corn demand, is nothing to sneeze at. If U.S. political leaders change their ethanol policy, the whole psychology of the corn market in the U.S. and the world will face a paradigm shift back in time. Even in an election year in the United States, 30 country-guide.ca
there are forces on both sides of this issue which are bringing it to the fore. It is unpredictable. Some analysts say it won’t happen, but if we have learned anything from the 2012 growing season, it is that in corn, we should never say never. At this early juncture, measuring 2013 corn acres versus all other grains is a bit of a flyer, especially when this year’s crop is yet to be harvested. However, the world is facing reduced corn stocks as well as much higher prices, which in turn are garnering the spectre of 100 million U.S. corn acres next spring. Yes, that corn acreage figure for 2013 seems preposterous, but make no mistake, there will be a huge push for corn acres over the winter and into spring, and as always, the weather will be critical. If it were only about the supply and demand for corn it would be so easy. However, the non-commercial speculative interests in the grain market manage huge pools of investment money, which flow in and out of agricultural commodities at a moment’s notice. Their choices affect currency values and corn prices usually in very significant ways. They accentuate trade volume, which in turn, makes for higher highs and lower lows. Price volatility is usually the result. The challenge for Canadian corn producers is to measure how their management choices fit into this corn environment. Corn has so many advantages with its superior economics compared to other grains. As we move into the fall harvest and then look toward spring, surely there will be visions of 200-bushel yields sold at $6, $7 or $8 a bushel in 2013. As said above, if the 2012 corn-growing season proved anything, it’s that you can’t take things for granted. As we look ahead, though, Canadian producers are poised to produce. CG September 17, 2012
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BUSINESS
CORN HEADS WEST Ten million acres of western corn within 10 years? rain corn plantings hit a record 300,000 acres in Manitoba this year, and Joel Lawson, who farms at Miami, an hour south of Portage la Prairie, accounted for 315 of them. The 29-year-old, in his second year of farming with his dad Ray, quadrupled his corn acres from last year. “I did it because of the potential for a higher net return,” Lawson says. With 2125 corn heat unit genetics in 2011, Lawson’s 70 acres yielded just over 150 bushels an acre, and it came off almost dry, making it seem a simple choice to plant more in 2012. Now, DuPont Pioneer wants to replicate Lawson’s success and take corn across Western Canada, where Alberta farmers are already planting 90,000 acres. “We see 10 million acres of corn in Western Canada in a 10-year time frame,” says Greg Stokke, DuPont Pioneer’s business director for the company’s Western Canada commercial unit, and he talks in terms of corn “transforming” western Canadian agriculture.” DuPont Pioneer has already invested in bricks and mortar, opening a facility 32 country-guide.ca
in nearby Carman in 2009 to breed corn as well as work on canola and soybeans. Earlier this year the firm also opened a new research centre in Edmonton. In fact, DuPont Pioneer, formerly known as Pioneer Hi-Bred, estimates there are 40 million acres in the West with the right soils and sufficient rainfall to produce corn. The hurdle is to breed hybrids that can mature early enough. Most Manitoba hybrids are in the 2200 to 2400 corn heat unit (CHU) range, but DuPont Pioneer also sells a 72-day maturity (2050 corn heat unit) variety. “If we get to a 70-day corn hybrid, that opens up about 10 million acres (in the West),” Stokke says. “When you get down to that 68-day corn hybrid you open up about 20 million acres in Western Canada. In 10 years or less we’ll be at 68 day (1900 CHU).”
THE NEXT CANOLA? Theresa Bergsma isn’t surprised Manitoba farmers seeded record corn acres this spring. The secretary-manager of the Manitoba Corn Growers Association (MCGA) says the industry had been expecting it for several years, but until 2012 the springs were too cool, too wet or both.
By Allan Dawson Future production depends a lot on prices, Bergsma says. “If prices stay strong like they are now, corn acres will grow,” she says. “But it also depends on the spring.” Corn is a heat-loving crop. It needs to be planted early and to get out of the ground fast in order to mature before the first killing frost, which on the rare occasion has struck in late August in the Red River Valley, where most of Manitoba’s corn is produced. Next year’s seed supply could also be a factor due to drought in parts of Ontario and the United States where corn seed for Manitoba is produced, Bergsma says. As well, competition for seed may be intense, based on farmers around the world chomping at the bit to increase acreage for a chance to sell $8 crop. If Lawson could grow a repeat 150 bushels, and if prices did stay as high, that would be an astounding $1,200 gross per acre. The reality will likely be less astronomic, but it explains the urge to plant.
A BETTER START In the countdown to harvest, crop watchers are keeping a close eye on the Manitoba crop. SEPTEMBER 17, 2012
business “The majority of Manitoba corn growers were able to plant their 2012 grain corn crop by late April or early May,” says Pam de Rocquigny, cereal specialist ofr Manitoba Agriculture, Food and Rural Initiatives. “As well, corn has benefited from the higher temperatures seen over the growing season.” The big question is, were the rains timely enough? Most cornfields could have used more, but in late August observers were still hoping for an above-average provincial yield. Farmers lucky enough to get adequate moisture were crossing their fingers for a bumper crop. The five-year average yield for corn in Manitoba is 97 bushels an acre, according to crop insurance data. The record — 118 bushels an acre — was set in 2007. Now, that 2007 record looks like it might be beatable. At the very least, it no longer looks like a fluke. In four of the last six years the provincial average exceeded 108 bushels an acre. Back in 1981 when the previous plantings record was set at 225,000, Manitoba’s five-year average corn yield was 63 bushels an acre — a third less than it is today. Grain corn has come a long way in Manitoba. Production got a kickstart in the 1960s when Seagram built a distillery at Gimli. It wanted to make whisky, including its prestigious Crown Royal, from Manitoba corn. The company helped teach farmers how to grow corn and would later sponsor the annual corn-growing competition. In 1971, the province’s farmers established the MCGA and seeded 9,000 acres of corn, with a harvest of 440,000 bushels. For many years the distillery was a major market for Manitoba corn and it paid a premium for high quality. Now, however, most of the crop goes for alcohol of a different sort. Husky’s ethanol plant at Minnedosa buys nearly 60 per cent.
When Joel Lawson started farming last year with his dad Ray near Miami, Man.,he wanted to try corn, a crop Ray hadn’t grown for a few years and which had a troubled past in the province. A good crop and good returns, however, saw Joel quadruple his corn acres this spring, contributing to the record 300,000 acres of grain corn seeded in Manitoba in 2012. The corn in this field was almost 10 feet tall when photographed Aug. 30. infested to harvest, meaning it earned no income at all. Corn has the potential for high yields, but it’s a costly crop to grow. And it requires specialized equipment, including a planter and corn header for the combine. Soybeans by contrast can be produced with conventional equipment, although more and more farmers are buying planters and flex headers to better produce soybeans.
A one-in-10 wreck Roughly once every 10 years, Manitoba corn has a wreck. The coldest growing season on record in 2004 saw Manitoba farmers harvest an average of just 1.3 bushels per planted acre. In 2009 corn averaged 44 bushels an acre due to a cold spring and cool summer. In 1993 excessive moisture resulted in an average yield of 19 bushels an acre, and
Slower than soys But corn acreage hasn’t taken off the way soybeans have, even though corn has been in production here much longer. Prices for frost-damaged soybeans are discounted, but can still earn a return, yet growers remember several years where much of Manitoba’s corn was either too immature or too mould September 17, 2012
the year before the average was just 20 bushels due to frost. That’s why Bergsma urges farmers to hedge their bets by planting early-maturing hybrids, with fewer acres devoted to later maturing, but potentially higheryielding varieties. Yet each year the MCGA’s annual yield competition provides insight to what is possible with corn. Last year Baker Colony Farms near MacGregor didn’t just break the competition record, it shattered it with a yield of almost 272 bushels an acre. The old record was 253 set in 2008. That contest is based on hand-picked cobs, not field-scale harvests. Still it points to a crop with potential. Stokke for one is a believer. “We have the model, the know-how, the funding — we can do it.” CG (With files from Rebeca Kuropatwa)
Put your business planning skills to the test! The Grand Prize Winner will receive the opportunity to attend the 13th International Farm Management Association Congress held in July 2013. For full contest details and entry form, please visit www.takeanewapproach.ca/challenge.aspx, or call (519) 822-6618. country-guide.ca 33
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19/06/2012 11:39:44 AM
management
Minimize your fertilizer price Increasingly, it pays to use the same skills when buying your nitrogen as when you’re selling your crops By Gerald Pilger ne of the biggest decisions farmers face each year is when should they price their fertilizer needs. Not only is fertilizer the biggest input expense in many crops, but prices can change dramatically in a relatively short period of time. Purchasing at the “wrong” time (i.e. when fertilizer prices are high) can seriously impact the farm’s financial situation. But how can a farmer know when the time is right? Here are four strategies to consider in the new era of increasingly volatile fertilizer prices.
1. Pre-buy Pre-buying fertilizer months before it is required has become standard practice for most growers, with the goal of taking advantage of the seasonal nature of fertilizer prices. In most years, fertilizer prices are lowest in the late summer or fall. Growers with fertilizer storage capacity and available cash or credit can save money by purchasing in this time period. However, this is not always the case. Growers who bought their fertilizer in the fall of 2008 found they paid nearly twice as much as those who waited to purchase theirs in the spring of 2009. That year, the commodity price crash was largely responsible for the sharp drop in fertilizer demand and prices between fall and spring. On the other hand, in the spring of 2012 fertilizer prices shot up by more than 50 per cent in three weeks at seeding time, largely due to a shortage of supply. In fact some growers simply could not get as much fertilizer as they intended to use at any price. As well, many farmers experienced delays in delivery of fertilizer even though they had pre-paid for all they needed. These are all symptoms of an increasingly volatile fertilizer market, and in light of this, it’s easy to see why combining pre-buying with on-farm storage is becoming common practice, with growers trying to build as much certainty into their fertilizer supply as possible. At Minnesota State University, agricultural economist Mike Boland says there are a number of factors which impact fertilizer prices. Factors which can affect fertilizer prices include crop prices, crop supply and demand, expected fertilizer supply and demand, natural gas costs, exchange rates, transportation costs, government policy decisions, and consolidation within the fertilizer industry. Boland also emphasizes that fertilizer is now a 34 country-guide.ca
globally traded commodity, and farmers and fertilizer retailers have very little pricing power.
2. Lock in a profit margin Jonathon Driedger, a market analyst with FarmLink Marketing Solutions, suggests growers should be looking to lock in a profitable margin rather than simply trying to pick the lowest fertilizer prices. Driedger recommends forward selling grain at the same time that you pre-buy fertilizer in order to ensure profitability. Minnesota’s Mike Boland agrees, recommending growers link the purchase of needed crop inputs with futures sales of the crops you will be growing.
3. Hedge nitrogen prices Farmers are well aware of the value of using hedging to lock in commodity prices. Unfortunately, there are no futures contracts for fertilizer. Until 2005, natural gas futures could be used as a proxy for nitrogen fertilizer hedging because nitrogen prices tended to follow natural gas prices relatively closely. After all, natural gas is the primary component of nitrogen fertilizer, accounting for up to 80 per cent of the cost of nitrogen fertilizer production. However, there has been a decoupling of the natural gas/nitrogen fertilizer relationship. Instead, grain prices now are a bigger influence on fertilizer pricing, with higher grain prices resulting in higher fertilizer prices. At least one major retailer of fertilizer publicly acknowledges this new pricing relationship and in fact is offering farmers a risk management contract that connects fertilizer prices with canola prices. This fall Cargill has introduced the Nitrogen Risk Reducer Contract. A grower pre-buying nitrogen fertilizer from Cargill has the option to purchase a contract which adjusts the price of pre-bought nitrogen should the average price of canola decline between the time of fertilizer purchase and March 16, 2013. For every dollar per tonne the averaged futures price of canola drops during the contract period, growers are refunded $1 per tonne of fertilizer purchased (or booked) and protected under this contract. The premium for Nitrogen Risk Reducer Contract is $20 per tonne and must be paid at time of purchase or booking of the fertilizer. It is up to growers to determine how many tonnes of their fertilizer purchase they want to protect with this contract, although there is a minimum of 25 tonnes and growers cannot protect more fertilizer than they purchase. september 17, 2012
management While not a true hedge, this contract is intended to provide peace of mind to growers faced with the current high fertilizer prices. Growers can purchase their fertilizer needs in the fall when prices have historically tended to be the lowest, yet still be partially protected should canola prices drop which in turn would likely result in lower fertilizer prices during the winter months.
4. Cost averaging The simplest way to reduce price volatility risk is dollar cost averaging. Few farmers sell their entire crop on just one day so why are farmers willing to risk locking in their biggest crop input cost on just one day? Instead, the cost-averaging strategy would see farmers buy a portion of their fertilizer needs throughout the year, thereby averaging out the cost of fertilizer over the year. For example, a grower could arrange with a retailer to purchase one-twelfth of their annual fertilizer needs on the first day of each month. Or perhaps a grower might decide to purchase quarterly. For example, they could purchase a quarter of their next year’s needs on June 30, followed by subsequent quarters on Sept. 30, Dec. 30, and March 30. Actual timing of purchase would vary between growers depending on cash flow, tax considerations, storage, and other factors. An average purchase strategy may also benefit the retailer. Typically retailers place fertilizer orders months in advance, which exposes them to risk because dealers also have no way of hedging the price. Plus, unlike farmers who know fairly closely how much fertilizer they need, the loss or gain of customers can significantly change sales volumes for retailers. In this context, customers who are willing to commit to purchasing their next year’s requirements a year in advance reduce the risk to retailers when they are ordering their supply. Interestingly, none of the four fertilizer retailers I contacted had any type of contract whereby a grower’s fertilizer needs could be purchased in equal portions throughout the year. But three of the four representatives of these companies could see value
in offering such a program and they said they would pursue the idea further. The one independent retailer I spoke with stated he had never even considered something like this, but would certainly work with any producer who wanted to purchase fertilizer in increments over time. Will such a strategy become a popular choice? At this point it’s hard to say. Much will depend on whether farmers feel motivated to seek some level of price protection. If your goal is to get a good fertilizer price — at least in relative terms — then averaging may not look attractive. On the other hand, if your goal is to avoid a bad price, then it may look like an appropriate tactic. As fertilizer prices continue to gyrate, we may be about to find out which attitude is the better basis for building a successful farm. CG
Fertilizer price outlook When asked for an outlook for 2012-13 fertilizer prices, most of the experts I talked to say farmers should expect a similar pricing pattern as in 2011-12. Farmers have had a number of years of good crop prices and most have relatively strong balance sheets, says Mike Boland, economist at Minnesota State University. Even farmers who are experiencing severe drought this year most likely have crop insurance which will provide the cash flow needed for fertilizer purchasing. In that scenario, it’s hard to see fertilizer demand dropping, especially with the outlook for another year of high grain prices. As a result, Boland doesn’t see any downward pressure on fertilizer pricing. At FarmLink Marketing Solutions, market analyst Jonathon Driedger is telling his clients that they should consider locking in prices for at least a portion of their nitrogen fertilizer needs right now. He too believes there will be strong demand for corn next year and farmers will be very willing to invest in fertilizer for that crop, given the high prices. “It’s all about corn,” says Driedger. Matt Erickson, economist with the American Farm Bureau Federation is predicting higher nitrogen fertilizer prices throughout the winter and into the spring. In an early-summer webinar on energy and fertilizer, Erickson said: “Locking in fall fertilizer needs this summer could be a good opportunity, although it will likely be a narrow opportunity.”
TRIPLE or PRESSURE-RINSE your empty pesticide containers Only clean containers can be recycled. Take the extra step: rinse before you return.
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september 17, 2012
country-guide.ca 35
March 2012
management
Growing the brand AGCO’s two senior North American executives share their plans for building their company By Scott Garvey, CG Machinery Editor
For AGCO’s Crain (l) and Richenhagen, North America is the world’s key battleground.
arlier this summer, most of AGCO’s senior North American executives made the trek from their corporate head office outside of Atlanta, Georgia, to the small, rural city of Jackson, Minnesota. They went there to cut the ribbon and make a few speeches at the grand opening of the “Intivity Center” attached to the company’s tractor and sprayer assembly plant in that community. Along the way, they told us about their strategy to grow their market share in both the U.S. and Canada. It’s a strategy that integrates marketing with every facet of the business. The Intivity Center is a 17,000-square-foot visitors’ interpretive facility created to enhance the experience of anyone visiting the plant, which itself has just undergone a 75,000-square-foot expansion to accomodate production of wheeled Massey Ferguson and Challenger-brand row-crop tractors. One AGCO executive described the Intivity Center as a “destination attraction.” Dealers can bring customers or prospects to the plant to see first hand what goes into building an MF or Challenger tractor, and anyone else can make the trip to Jackson to see the facility too. All that helps enhance the company’s image, with the objective of building a positive image in the mind of potential customers as a strong driver for sales.
36 country-guide.ca
Higher sales numbers in North America are exactly what the company is striving to achieve. According to senior management, investing in its North American manufacturing facilities is a major part of the company’s overall strategy to continue building the profile of its brands. “We want to grow more in America than any other area of the world,” said Martin Richenhagen, AGCO chairman and CEO, during his address to the hundreds of dealers and invited guests at the Intivity Center grand opening ceremony. “When I came to the U.S. I always had a dream. And the dream was to build a factory for wheeled tractors in America.” The Jackson assembly plant is the realization of that dream, and the company is planning other capital projects in the U.S. to increase its presence in North America. “AGCO is on a growth path,” Richenhagen continued. The company is spending $350 million on research and development this year, he said, and it is also pumping another $350 million globally into capital projects. After the formal ceremony concluded, Richenhagen and Bob Crain, senior vice-president and general manager for North America, sat down with selected media to talk about the newly expanded tractor plant and how it fits into their vision for the company’s future. “We would like to have everything we sell in America to be produced in America,” said Richenhagen. “And we’re getting there. This (Jackson plant expansion) is an important first step in that direction.” Getting production ramped up in Jackson to include row-crop tractors was the result of an extensive planning effort. As construction progressed on expanding the building and installing new equipment, staff from the plant spent a lot of man-hours in the Beauvais, France factory where the large rowcrop tractors were previously built. They were there to learn the unique assembly processes for the tractors, so they could seamlessly integrate those processes into the U.S. operation when they got home. That kind of planning and lead-up effort is an example of why translating investment into tangible results doesn’t happen overnight. “If you know anything about product development, you don’t see the products for three or four years after you start spending the money,” explained Crain. “What dealers are seeing right now is truly the tip of the iceberg. The best is yet to come in terms of products.” September 17, 2012
MANAGEMENT Along with increasing North American production, they also want their machines to have a reputation for quality. “We want to be No. 1 in perceived quality by 2014,” said Richenhagen. “Which isn’t an easy target because our competitors don’t stand still.”
The Equipment Authority
EUROPE TOO And don’t think the move toward increasing production in North America is an effort to flee the uncertain economic conditions in Europe, cautioned Richenhagen. “We are also growing in Europe. We had a record first quarter in Europe, so that means our industry is different from some of the other industries.” Richenhagen doesn’t believe the economic uncertainty there is holding back AGCO or any other company in the farm equipment industry. “I wouldn’t give up on Europe,” he said. Even so, Richenhagen does think changes to the structure of the EU could eliminate the cause of some of that region’s current problems. “I always thought from the beginning it’s very difficult having one shared currency but different tax laws. I think we need to get into a kind of structure similar to maybe the U.S. or Canada, kind of the United States of Europe, which means we don’t want to overregulate every single country. But in the area of tax legislation and business laws we need one European state bank instead of many state banks.” Richenhagen sees having production facilities in a variety of countries, including those in Europe, as a key element in running a global business. “You don’t want to put all of your manufacturing into one country only,” he said. “Therefore, we have it in France, Germany, Italy, Holland, and Finland, and then, of course, in eastern Europe. That’s a nice footprint.” AGCO has production facilities elsewhere as well, including South America. It’s building a new factory in China and expects to open a production facility in Africa at some point in the future. Although there is widely publicized speculation that CNH Global, parent company of New Holland and Case IH, will pull up its corporate stakes in Italy for greener pastures elsewhere, Richenhagen doesn’t see any need to do the same with AGCO’s Italian holdings. “I think this is kind of a political fight,” he said of the CNH affair. “We don’t have an issue (in Italy). We like to be in Italy, because it’s not bad to have a factory in the important markets.” As the company looks at future growth, Richenhagen offered a criticism of the prevailing attitude among many outside investors, saying he believes they don’t fully understand the new reality in the farm machinery industry. “There is a kind of paradigm in our industry which needs to change,” Richenhagen said. “Which is the very famous question, ‘where are we in terms of the cycle?’ There are no cycles in our business anymore. When you look back in history, the last 15 years were extremely stable for our business. Even during the financial crisis we were hit very, very late. The problem is that those people at Wall Street are not coming from the countryside. They don’t understand farming. They’re big-city guys.” And as he looks to the future of the North American market, is there a need for AGCO to continue to make capital investments by adding or expanding manufacturing facilities in order to fully reclaim Massey Ferguson’s once large market share? In answer to that he is unequivocal. “Yes. I think so,” he said quickly. Will AGCO continue making those North American investments? Richenhagen seemed to sum up the answer to that question during his speech at the grand opening ceremony when he said, “I would put it under the headline: AGCO, always growing.” CG SEPTEMBER 17, 2012
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country-guide.ca 37
Business
When the Jenkins family was ready to wrestle with its succession dilemma, help came from an unexpected place By MaggieVan Camp, CG Associate Editor
38 country-guide.ca
hen fifth-generation southern Alberta rancher Jen Jenkins decided she wanted to farm 12 years ago, she knew there would be some tough decisions. Starting to farm is hardly ever easy. Nor is succession. But add in a big family, all owning small parcels of the highly prized foothills ranch — plus two possible successors — and you’ve got the makings of a succession labyrinth. The Jenkins ranch is nestled in one of the most spectacular vistas in Canada, which also happens to be a wildlife migration corridor. It’s like a scene from the 1990s movie, “A River Runs Through It.” To the south lies Waterton National Park with the soaring Rocky Mountains, while along one of the ranch’s borders is a sparkling fly-fishing river. It can seem like paradise. Soon, though, the family’s how-to-succeed options seemed as rare as some of the wild species on their property. Today across the Waterton River, Cardston County is flooded with urban
development, tastelessly big houses jostling for the mountain view, and in 2000, when the Jenkins were talking succession, it was already clear that developers wanted even more. At the time, the two Jenkins brothers, Tom and Bob, worked side by side to manage their 300-cow purebred Hereford herd. The ranch’s 3,200 acres of native grass however were owned by no less than 15 family members, including themselves. Grandpa had willed his grandchildren 40-acre pieces, and each of the uncles and aunts still held portions that they leased to the ranch. Tom and Bob each had a child, Pete and Jen, who wanted to ranch, but 300 cows wasn’t big enough to sustain another two families. Being bordered by a national park and a river made expansion impossible and then there was the rising cost of land. “Land values in our area are very high so it wasn’t feasible to create that kind of capital to purchase the land by ranching alone,” says Jen. On the positive side, all the family members agreed that they didn’t want september 17, 2012
Photo credit: Aaron Whitfield
Thinking outside the fence
Business
to sell out to development. “No one wanted to see it subdivided,” says Jen. “We were ingrained with values about the land, how to treat and respect it.” Realistically, however, the family members did need to be compensated for their assets. The succession puzzle’s solution came unexpectedly, from an unexpected source — an environmental conservation group, the Nature Conservancy of Canada (NCC) which was buying land for its Waterton Park Front project at the time. The NCC has big money behind it, plus large corporate sponsors such as Shell and TD. With a balance sheet weighing in at about $5 billion in net assets, this non-profit group has used private donations and its partnerships with governments to purchase outright or put conservation easements on nearly two million acres across Canada. The NCC not only buys but also actively manages conservation on many of these properties. In 2001, the NCC bought 3,200 acres of the Jenkins’ property for about $1,250 an acre. (The family also ranched an additional 300 acres via Crown lease or in partnership with neighbours.) Although the sale price was much lower than the land’s development value, it allowed for the nonfarming family members to be paid out, and those who wanted to continue ranching to do so. Tom and his son Pete took their portion and bought another ranch in Saskatchewan while Jen and Bob stayed on the Alberta ranch, with a 50-year no-charge lease where they cover the municipal taxes. september 17, 2012
“It allowed everyone to begin fresh,” says Jen. “Amazingly we (all the family members) still talk to each other.” By the time debt was covered, equipment was duplicated and all the family members were paid off, there wasn’t a huge nest egg left. However, in the end everyone was able to meet their goals. “It may not have always been the best business decision but it was a good family decision,” says Jen. Conservation easements first became popular in the 1980s. By the end of 2010, the National Alliance census estimated the total acres conserved by state, local and national land trusts in the U.S. to be 47 million. That’s an increase of about 10 million acres since 2005 and 23 million since 2000. Basically, they’re legal agreements between conservation bodies and landowners that limit the uses on a property and are tied to the title of the land, no matter who owns it. The conservation body can be a federal, provincial or municipal government body, an independent, non-profit conservation organization or a land trust, such as the NCC. According to the Ontario Farmland Trust, a unique trust that focuses on preserving agricultural land, the terms of conservation easements vary, but all limit subdivision and environmentally damaging forms of development and are usually into perpetuity. “As long as the easements are spelled out clearly from the beginning and the intent is known, these (restricContinued on page 40 country-guide.ca 39
Business Continued from page 39 tive convenants) should stand,” says Matt Setzkorn, OFT’s policy co-ordinator. The conservation body doesn’t necessarily have to buy the land, as it did in the Jenkins case. More often landowners decide to have a conservation easement placed on their land because they want to ensure the ecologically sensitive or agricultural features of their property will remain protected after the property is sold or transferred. The landowners may also be motivated by tax credits. The difference in value of the property before and after a conservation easement is the value of the donation receipt to which the landowner is entitled. This may also reduce the municipal property tax assessment, although this must be pursued individually with property tax officials. Not all easements qualify as ecological gifts. For a donation of a conservation easement, common-law covenant or full title to be an eco-gift, Environment Canada must certify that the land is ecologically sensitive and it must also certify a fair market value for the donation. For more information on the Ecological Gifts Program, contact Environment Canada at www.ec.gc.ca. As of June 2006, landowners in Alberta had donated or sold conservation easements covering about 74,000 acres and donated or sold fee simple title covering about 100,000 acres to conservation organizations. Of these lands 47,000 acres qualified as ecological gifts valued at about $42 million. “The property value usually is lowered with these easements and for that change in value you can get a tax credit, if your property is deemed to have special qualities,” says Jennifer Stevenson, business adviser with the Ontario Agriculture Ministry. “Anything above the capital gains tax exemption, you get extra tax credits.” The tax benefits of a conservation easement can sometimes be used to help with farm succession. The process also forces families to talk about a vision for the property and try to match that with personal wants and needs. “An agricultural conservation easement is also a tool for succession planning as it provides a formal agreement outlining provisions to ensure that one’s land may provide a specific use for future generations,” says Stevenson. 40 country-guide.ca
When the Jenkins began negotiating with the NCC they hired a good lawyer who had previously worked with conservation easements. “Get a lawyer experienced with conservation easement to set it up properly,” Jen recommends. Covenants usually are negative, not allowing for particular activities or land uses. For example, a covenant might prevent subdivision of the property or require that the property be used for farming only, or not allow the removal of certain vegetative species within designated natural zones. Since they were already using good land stewardship practices, the Jenkins didn’t have to change how they operated their ranch. Jen and Bob maintain control of how the land is grazed and subsequently many other area ranchers now have agreements with the NCC. Some of them are based on purchases, as with the Jenkins, while others are based on conservation easements. Today the Waterton Park Front project is one of the largest private land conservation initiatives in Canada, conserving over 30,000 acres of ranchland. Covenants can also allow activities such as responsible forestry, usually according to a named set of practices or a management plan attached to the easement. The easement portion of the agreement grants to the holder, among other things, access for the purpose of inspecting the property and the right to take action to remedy any deficiencies. It also usually outlines terms such as giving notice of inspection to the landowner. Jen works well with the two or three NCC staff in the area and over the years has partnered with the NCC to do a few conservation projects, such as fencing riparian areas. Bob and Jen own everything on the land, such as the houses. There are three family homes on the ranch. One concession they made to the family was that the descendants could come back, use their family homes any time and enjoy the property, ride horses or go for a walk. That agreement has worked out fine but Jen’s ability to build a home for herself to replace her mobile home is curtailed. There’s another hitch too. Ownership of capital assets wasn’t something Jen thought would be important when she was younger.
However, loaning agents want land as collateral. “I didn’t see that it would leave me with little borrowing power,” says Jen. Normally they would have managed through this limitation but May 2003 changed everything. During the winter, Jen and Bob had bought 100 cow-calf pairs intending to resell them after grassing them over the summer. When the border shut down because a Canadian animal tested positive for bovine spongiform encephalopathy (BSE), suddenly those cows were worth nothing. And all their cash flow was tied up in cattle. “All our cash had gone back into building the herd,” says Jen. Once the shock had settled, Jen gathered her financial information and invited her banker out to the ranch to talk about a bridging loan. She poured out her story. “Then he said I should evaluate what I wanted to do and suggested I get a job at Walmart.” Now spurred on with a little anger, she called a senior economist from Alberta Ag and got some good advice. She went back to the books and did five years of full budgeting and presented it to two other banks with no luck. “It forced me to step up my game,” she says. Finally Jenkins went into Lethbridge to meet with FCC. “I’ll always remember that moment,” she says. “He met me with optimism, and said it was going to get better.” Now she figures it’s time to give that positivity back to other new farmers. She’s recently started acting as a facilitator for FarmOn (www.farmon.ca). Her role there is to listen, let farmers know they are not alone and help them set up a team of people and information to get them through their challenges. Her services are free and she has a large resource board behind her who help connect to the resources. “Often we’re trying to do it all, financial management, marketing, production, ownership, human resources,” Jen says. “Sometimes it’s a matter of letting someone else help you and it doesn’t necessarily cost a bundle.” Jen started her online connection with a woman’s group. These online chats and conferences led her to the FarmOn site. “I want to facilitate people building the future of agriculture,” Jen says. “I know what it feels like to be alone trying to make a go of it. I’m there to listen, online.” CG september 17, 2012
hr
The wrong beliefs Our beliefs about farming and about life can prevent us from achieving the success that is waiting for us By Pierrette Desrosiers, psychologist and coach
n large part, our beliefs determine what we get out of life. They can also help us be successful as farmers, or they can get in our way. By this, I don’t mean the beliefs we associate with church. Instead, for our purposes a belief is something that isn’t a fact or an absolute truth, but that we consider to be true. We all have beliefs about other people, life and ourselves, and these beliefs affect our attitudes, feelings and behaviour. This is why they deserve scrutiny. Our beliefs are the result of our education, culture, personality and experiences. Some of them are good for us and for society: it is wrong to steal. However, some of our beliefs are limiting and even destructive. They prevent us from evolving, from improving ourselves, or from changing situations or even adapting. Therefore, if we want to change something in our lives, the first step is to examine and perhaps modify our beliefs. For example, Roger, a large farmer in his 50s, is heavily in debt and he believes that he can’t do anything about that. He argues that he has no control over his finances. “I am in debt because of the government, the price of inputs, my wife.” When I spoke with Roger, we discovered that the real source of his financial problems is his belief that in order to be successful, he must be recognized as a success, and in order to be recognized as a success, he has to possess the newest machinery and the biggest farm in the area. Roger also believes that a “real man” doesn’t ask for advice or help. It became apparent how Roger’s beliefs affect his financial situation. By addressing those beliefs, Roger put in the necessary time and effort so that, two years later, he has developed healthier habits about managing money. When should you suspect that your beliefs might be holding you back? Consider the possibility if: • You are obtaining clearly unsatisfactory results. • You feel limited in your development. • Your self-esteem is fragile. • You have many conflicts. • You have financial problems. • You feel you don’t have control, or that you’re like a prisoner of your own life. In short, if your life is a series of dissatisfactions and disappointments, you surely hold several limiting beliefs. In fact, you are probably sabotaging your own existence unconsciously. Limiting beliefs that can have a major impact on your financial situation include: september 17, 2012
• I ’m not smart enough, good-looking enough, educated enough to… • Above all, I must not make any mistakes. • It’s not my fault, it’s their fault. • I’m not disciplined enough. • I absolutely need to be recognized in order to be happy. • If I make a mistake, everyone will laugh at me. • No one can be rich, healthy and happy. • You have to suffer in life to deserve what you have. • You were born to be poor. • Only liars and thieves get ahead. • Success isn’t for me. That’s how I am, and I can’t change that. • It would all be different if I was born with a silver spoon in my mouth. To change life’s results, we have to change our beliefs.
1. Identify your beliefs It takes effort to become aware of your beliefs. You have to listen to your internal dialogue. We constantly talk to ourselves, even if we are not always aware of it: “I can be such an idiot! How can I do that? I need that in order to be happy. What will they will think about me? Other people are going to think I am not successful if…”
2. Confront your beliefs Are they true? Look for proof of what you are saying. Is it real? Does everyone think that? Is it really undeniable? Are they beneficial? Do you feel good (joyful, happy, confident, peaceful) because of your beliefs? Do they give you more happiness? Do you feel better in the long term? Do they make your family happier? Are they useful? Do your beliefs help you accomplish your main objectives in life and business?
3. Change your beliefs Are your beliefs true, beneficial and useful? If so, keep them. If not, make an effort to change your thinking, exchanging one belief with another that is more useful and more realistic. Remember, you can control your beliefs. After all, a belief is only a belief, not a truth. CG Pierrette Desrosiers is a work psychologist, professional speaker, coach and author who specializes in the agricultural industry. She comes from a family of farmers and she and her husband have farmed for more than 25 years. (www.pierrettedesrosiers. com) Email:
[email protected]. country-guide.ca 41
LAND IMPROVEMENT CONTRACTORS OF ONTARIO
LICO CONTRACTORS LISTED BY REGION
■ SOUTH-WESTERN Region ■ SOUTH-CENTRAL Region ■ CENTRAL Region ■ EASTERN AND NORTHERN Region
TILE INSTALLATION
WIND PROJECTS
We locate existing tile, collect GPS data and design and install rerouting and post construction tile drainage systems.
CHATHAM-KENT 519-436-6134
www.gillierdrainage.ca
GPS Surveying & Mapping GPS Guided Drainage Plow Hourly Equipment Rental Competitive Pricing Professional Experienced Staff
342 Chatham St. S., Blenheim, ON, N0P 1A0
LICO CONTRACTORS SOUTH-WESTERN Region
519-676-7226 E-mail:
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LAND IMPROVEMENT CONTRACTORS OF ONTARIO
www.drainage.org
ONTARIO CROPLAND DRAINAGE A SHORT HISTORY THE LAND IMPROVEMENT CONTRACTORS OF ONTARIO (LICO) is an association of professional contractors, suppliers and associated industries primarily concerned with agriculture and cropland drainage in Ontario. LICO contractors do the design and installation of most cropland subsurface drainage systems and are licensed under the “Agricultural Tile Drainage Installation Act”. Some are also certified to install surface water management and erosion control structures. To be “licensed,” the contractors must undergo specialized training and pass exams in soil and soil management, land survey, cost effective drain design, environmental issues and drainage, and associated legislation. Contractors must also demonstrate a high level of competence in the use of drainage installation equipment before they are licensed. In addition, the licensed contractors must use Ontario-certified installation equipment to further ensure accuracy in their work. Government involvement has encouraged drainage and adoption in an orderly and responsible way. In the early years, drainage was necessary to reduce insect populations – like black flies and mosquitos that brought malaria. More recently, it was recognized that soil moisture – too much or too little – is the first limiting factor in crop production. In Ontario, too much moisture is a problem, so more than half of our cropland benefits from drainage. Over the years, farmers and drainage contractors, together, have made great progress in cropland improvement. In the 1840s, the first clay tile was made at Port Darlington, east of Toronto. In the 1890s, the first Buckeye Steam Powered trencher was built in Ohio. In the 1910s, short courses were offered on drainage. Cropland drainage rapidly
increased through the 1950s when the first Drainage Guide was published for Ontario (Ross Irwin). Drain pipe installation really accelerated following the 1960s, when plastic drain pipe, trenchless plows and laser grade control were introduced. More recently, GPS is being used to control installation equipment and to produce highly accurate drainage maps. Drainage contractors first organized as the Ontario Farm Drainage Association in the early 1900s. Eighty years later the name was changed to the Land Improvement Contractors of Ontario, to better-reflect their important role in cropland management. The organization includes about 90 contractors who constantly engage in professional development through their annual conference, where the focus is on new and better technologies, and safety training. They attend field days and share information through their newsletters. LICO is engaged in many activities: The organization supports soil/water/drainage research and, for the past several years, has supported an elementary school soil management teaching project. Contractors have participated in the production of Best Management Practices manuals, and they review and are called upon frequently to challenge legislation that has negative impact on the farm community. LICO has an important role to play as a partner in cropland management and our food production system. When we combine its members’ commitment with technical capabilities and their long-time experience (in some cases several generations), their customers and the environmentally concerned can have a high level of confidence in their work. Globally, Ontario is considered to have the gold standard for cropland drainage.
Legislation has led to orderly, high quality drainage work: 1790s Drainage was included in the first legislation in Upper Canada. 1830s Act to regulate construction of watercourses. 1850s Municipal Institutions Act provided for drainage by petition. 1860s Ontario Drainage Act passed and Public Works became responsible for outlet drainage. 1870s Ontario Tile Drainage Act provided funding for on-farm tile drainage. 1890s Municipal Drainage Act added dispute resolution mechanisms to the Drainage Act. 1910s Drainage Supervisors were appointed. 1950s A grant for outlet drains was set at 33 per cent. The Ontario Department of Agriculture became responsible for drainage. 1970s Agricultural Tile Drainage Installation Act passed and contractors became licensed. 1980s Most municipal drainage superintendents trained by the Province.
The Land Improvement Contractors of Ontario (LICO) is an association of professional drainage contractors and suppliers of drainage pipe and equipment. The focus of their business is soil moisture management to enhance crop production in Ontario.
LAND IMPROVEMENT CONTRACTORS OF ONTARIO
LICO CONTRACTORS SOUTH-CENTRAL Region
FARM DRAINAGE
DRAINAGE SINCE 1949
Cook H OW A R D
DRAINAGE Stratford & Area
EASTERN AND NORTHERN Region
A.G. HAYTER CONTRACTING LTD. LAND IMPROVEMENT CONTRACTOR
Drainage Professionals since 1967
Glenn Hayter 519-808-6115 Grant Hayter 519-238-2313 Allan Hayter 519-238-2881
PARKHILL 519-238-2313
TILE DRAINAGE & EARTH MOVING SPECIALISTS
Drainage Installation and Repair Septic & Sewage Treatment Systems
www.cookdrainage.com 519-273-4118 Mobile 519-272-7264 1-855-273-4118 YOU NAME IT – WE DRAIN IT – FREE ESTIMATES
LICO CONTRACTORS
We do more than just tile drainage!
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We tackle any equipment related project Phone: (613) 388-2345 Fax: (613) 388-1092 Mobile: (613) 561-5006 Email:
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Excavating Ltd. P.O. Box 215, Pakenham, On K0A 2X0
Tile Drainage Contractor • GPS RTK Topomapping Backhoe, Bulldozer, Excavator Rentals Steel Culverts in Stock • Plastic Tile Licenced in Ontario & Quebec
Mervyn Downey 613-624-5346 C: 613-720-2143
Stephen Downey 613-624-5030 C: 613-314-3819
613-623-8802 | Arnprior, Ontario
[email protected]
Lin Scott Drainage Ltd. On Top of What’s Gone Below for Over 30 Years • Provincially licensed tile drainage contractor
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P.O. Box 297, 20233 Kenyon Con.4, Alexandria, ON K0C 1A0
613-525-1940
Farm Drainage
Let a good drainage system work for you to help improve: • Soil erosion • Aeration • Crop yields • Soil warm up • Crop rotation • Harvest length • Land values • Soil Conditions • Plant growth • Fertilizer efficiency
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Schmidt’s Farm Drainage 1990 Ltd. Harriston
Specializing in Farm Drainage, Backhoeing & Excavating. GPS includes: mapping, grade control & surveying GPS Grade Control Tel: 519-338-3484 Cell: 519-323-6335
We provide you with the best of: Drainage knowledge & expertise Free estimate based on our expertise Competitive pricing Personal service Detailed field surveys Professionally designed drainage systems and installations GPS mapping and guidance Excavator and backhoe work
TAIT BROS. CONTRACTING LTD. Drainage Specialists
Call us Toll Free:
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JOHN TAIT
(519) 928-5404 FAX (519) 928-5405
(888) 268-8248 (TAIT)
GRAND VALLEY, ON L0N 1G0
LICO Country Guide ad Canada, 08-12.indd 1
STEVE CRONSBERRY (Owner)
Office: (519) 343-3233 Home: (519) 338-2373
GREG WALKER
705-340-5500
8/22/2012 1:12:13 PM
w e at h e r MILDER THAN NORMAL
F Sn ros ow t
DRIER THAN USUAL
Dry ls l spe
ONTARIO
NEAR NORMAL TEMPERATURES AND PRECIPITATION
Scattered rain
d Mil ered t t Scarain IER D DRL N A RMA MER WAR HAN NO T
Oc ca s rai ion n al
NEAR NORMAL
m ar w W fe ers A ow sh
September 23 to October 20, 2012
Sept. 23-29: Generally warm weather and fair skies will dominate the week in spite of showers or thundershowers at a few localities. Temperatures vary but often trend to the warm side. Frost patches northern regions. Sept. 30-Oct. 6: Fair skies on many days with temperatures often a little above normal. On a couple of occasions expect scattered shower activity. Occasional rain and frost patches in central and northern areas. Oct. 7-13: Mostly fair skies dominate with scattered rain on one or two days. Chance of heavier rain in places. Brisk winds at times result in variable temperatures, but average near normal. Frost areas central and north. Oct. 14-20: Fair skies overall but expect some heavier rain on a couple of days. Cooler air and blustery winds bring frost on two or three nights to many central localities, with a frost risk in a few southern localities.
QUEBEC Sept. 23-29: Seasonal to warm weather and generally fair skies occur on several days this week but look for scattered showers or thundershower activity on one or two occasions. Frost patches, especially in central and northern regions. Sept. 30-Oct. 6: Seasonal to occasionally mild but cooler outbreaks bring unsettled weather with rain in a few areas, chance September 17, 2012
heavy in places. Windy at times. Frost pockets on two or three nights mostly central and north. Oct. 7-13: A disturbance brings variable weather conditions ranging from fair and mild to wet and cooler. Blustery winds at times. Frost in several southern areas, more widespread in central and northern areas. Oct. 14-20: Fair but cooler air moves in with some rain in the south becoming mixed with snow in northern areas. Frost on a few clear, cool nights. On fair weather days, highs reach the teens in the south.
ATLANTIC PROVINCES Sept. 23-29: Fair with highs in the teens, a few 20s. Frost threatens New Brunswick and a few inland localities. Scattered rain on a couple of days, heavier at times in eastern areas. Windy conditions from time to time. Sept. 30-Oct. 6: Mainly settled but heavier rain and gusty winds threaten on a couple of days. Seasonable temperatures with a few milder days. Frost patches on two or three clear, cool nights at inland localities. Oct. 7-13: Unsettled on a few days as disturbances move through causing fair skies to alternate with rain and gusty winds. Seasonal to mild temperatures but frost occurs in a few localities away from coastal areas. Oct. 14-20: On a few fair weather days highs reach into the teens. Nightime lows
approach zero with frost patches in many inland areas. Expect rain on a couple of occasions, risk heavy in places. Occasionally windy.
September 23 to October 20, 2012 NATIONAL HIGHLIGHTS A broad upper ridge is expected to prolong summer-like weather across eastern Canada this fall. Apart from a few showers or occasional rain, relatively dry weather is likely to accompany the mildness from Ontario eastward to Quebec and the Atlantic provinces. In the West, a lack of moisture is also anticipated in southern British Columbia with temperatures averaging near or slightly below normal. Across the Prairies, cooler outbreaks will bring frost to all areas and snow will make its first appearance in northern regions, with overall temperatures and precipitation ending up close to normal values.
Prepared by meteorologist Larry Romaniuk of Weatherite Services. Forecasts should be 80 per cent accurate for your area; expect variations by a day or two due to changeable speed of weather systems. country-guide.ca 47
ACRES
By Leeann Minogue
Taking on the lawyer’s kid hen she married Jeff and moved from the city to a farm, Elaine had been prepared for a lot of things. She was ready and eager to learn how to operate farm equipment. She had given a lot of thought to the reality of living a long drive from the nearest movie theatre (which only offered one show per week). She had even considered how she would live in a yard with her in-laws, and talked to friends to find out what it would be like to send her little boy to a small-town school on a yellow bus. After a year on the farm, Elaine was doing fairly well by anyone’s measure. She could drive the grain truck, the swather and the combine. While they wouldn’t admit it out loud, the Hanson men were relying on Elaine to be a big part of the harvest operation. And not only was she getting along well with her mother-in-law, Jeff’s mother Donna had taught Elaine to look after the farm books, and Elaine had taken over all the Hanson farm bookkeeping. She’d been prepared. But still, she wasn’t ready to have a surly 16-yearold living in her guest room. When Donna’s great-nephew needed a place to spend three weeks in the summer, the Hansons had, 48 country-guide.ca
of course, agreed that he could come to them. Of course there was room on the farm. There were two houses, and four adults to supervise the boy. (In fact, five, since Jeff’s grandfather Ed drove out from town to help out almost every day.) Taking in a stray teenager was not only polite, it was part of an age-old tradition of bringing city kids to the country to “run wild” in the summer. So Brandon had been shipped by plane from Ottawa to Regina, and since Donna had plans with some women in town and the men were in the shop, welding together some replacement parts for the Hansons’ seed-cleaning plant, Elaine had been dispatched to pick him up at the airport. It wasn’t a stellar start. Brandon only said about 17 words during the two-hour drive to the farm. Elaine asked question after question; Brandon gave one-word answers or just nodded. Luckily, the toddler chattering in the back seat kept Elaine company after Brandon popped an iPod earbud into his right ear when he thought she wasn’t looking. She hoped things would go more smoothly when she had the rest of the Hansons to help out. But the evening didn’t go much better. The whole family had dinner at Jeff’s parents’ house, SEPTEMBER 17, 2012
acres
and Donna and Dale took it in turns to ask Brandon questions. They also got one-word answers. It seemed that Brandon wasn’t crazy about being exiled to the wilds of rural Saskatchewan, and intended to spend as much time as possible on his laptop, keeping up with his friends back in civilization. The next morning, Brandon was still asleep when Jeff was going to work. “Send him out when he gets up,” he told Elaine. “We’ll show him how to weld.” “Weld?” Elaine said. “Are you out of your mind?” “What?” “He’s 16! His father’s a lawyer. He’ll sue us if we let the boy kill himself welding.” “Calm down,” Jeff said. “I started welding when I was 13. He’ll be fine.” Elaine could not be convinced. “All right.” Jeff gave in. “He can cultivate the trees.” “Seriously?” Elaine asked. “Have you been listening to me?” “With the small John Deere tractor. I’ve been running it since I was 11.” “Your parents let you drive a tractor when you were 11?” “Sure,” Jeff said. “Heck, I’d been driving the half-ton for four or five years by then. Not on the road, of course.” Elaine had no idea what to say. She remembered how horrified her own mother had been when she found out that Elaine’s father had let her drive their mini-van in the Saskatoon Safeway parking lot when she was 15, before she had a learner’s permit. “You won’t let our son drive when he’s 11?” she asked Jeff. “We shouldn’t need to wait that long. He’s a smart kid.” “He’s two!” Elaine said. “He’s hardly big enough to ride on farm equipment.” “Grandpa says kids are old enough to drive if they can open the door of the cab,” Jeff said. “Look, I’ve got to get to the shop. Dad’s waiting. Send Brandon out when he gets up, will you?” But by the time Jeff came back to the house at 10 o’clock, Elaine still wasn’t convinced that this wasn’t a big deal, and Brandon still wasn’t out of bed. “I’ll get him up,” Jeff said. He did, while Elaine packed the toddler into the car and went to town for a play date. September 17, 2012
“Send him out when he gets up,” Jeff told Elaine. “We’ll show him how to weld.” “Weld?” said Elaine. “Are you out of your mind?” When Elaine came home, she learned that the day hadn’t gone well. “You were right,” Jeff said. “This kid isn’t ready to weld. He’s not even ready for a cultivator. So Dad and I thought maybe he could start with mowing the grass. The kid couldn’t even start the lawn mower! He’s never heard of ‘choke.’ What do they teach them in those eastern schools? “I told him to start with the grass next to the canola field. Brandon said, ‘What’s canola?’ “Then I said he could fill up the gas tank when he was done, and he could barely do that without an instruction manual! Geez.” Elaine sighed. “You have to be patient,” she said. “How would he know about canola? This is only his third visit to a farm. He’s not stupid. He knows about different things. His dad says he’s a genius with a computer.” “Huh,” Jeff grunted. “I guess a hotshot eastern lawyer doesn’t have to know how to put gas in his own lawn mower. The kid’s probably never seen anybody do anything without a computer.” It was not exactly an easy summer for the Hansons. Or for Brandon. By late August, when Brandon’s parents arrived early in the morning to pick up their son, they were surprised to find he was not only out of bed, but out of the house. “He’s in the swather,” Elaine said. “Riding with Jeff? That’s nice,” Brandon’s father said. Elaine laughed. “No, it’s Brandon’s shift. We seeded so much canola, we’re running the swather 24 hours a day.” They looked shocked. “It took Brandon awhile to get the hang of it,” Elaine admitted. “But he’s good. Very conscientious.” Brandon’s parents’ jaws dropped. “How did you get him off the computer?” his father asked. “His computer skills have been
handy,” Elaine said. “When the GPS system went down, Brandon fixed it.” Elaine directed them to the field so they could see Brandon in action for themselves. “Can you take him this?” she said, holding out his iPod. “He left it on the kitchen counter.” Brandon’s parents just stared. Later, Elaine found out it had been months since they’d seen Brandon without at least one earbud plugged into an ear. Jeff was heading out to the field to replace Brandon on the swather. “Can you take the baby?” Elaine said. “He should be spending more time out there.” CG
Trait Stewardship Responsibilities Notice to Farmers Monsanto Company is a member of Excellence Through StewardshipSM (ETS). Monsanto products are commercialized in accordance with ETS Product Launch Stewardship Guidance, and in compliance with Monsanto’s Policy for Commercialization of Biotechnology-Derived Plant Products in Commodity Crops. This product has been approved for import into key export markets with functioning regulatory systems. Any crop or material produced from this product can only be exported to, or used, processed or sold in countries where all necessary regulatory approvals have been granted. It is a violation of national and international law to move material containing biotech traits across boundaries into nations where import is not permitted. Growers should talk to their grain handler or product purchaser to confirm their buying position for this product. Excellence Through StewardshipSM is a service mark of Excellence Through Stewardship. ALWAYS READ AND FOLLOW PESTICIDE LABEL DIRECTIONS. Roundup Ready® crops contain genes that confer tolerance to glyphosate, the active ingredient in Roundup® agricultural herbicides. Roundup® agricultural herbicides will kill crops that are not tolerant to glyphosate. Acceleron® seed treatment technology for corn is a combination of four separate individually-registered products, which together contain the active ingredients metalaxyl, trifloxystrobin, ipconazole, and clothianidin. Acceleron®, Acceleron and Design®, DEKALB®, DEKALB and Design®, Genuity®, Genuity and Design®, Genuity Icons, Roundup®, Roundup Ready®, Roundup Ready 2 Technology and Design®, Roundup Ready 2 Yield®, RIB Complete and Design™, RIB Complete™, SmartStax®, SmartStax and Design®, VT Double PRO™, VT Triple PRO™ and YieldGard VT Triple® are trademarks of Monsanto Technology LLC, Monsanto Canada, Inc. licensee. LibertyLink® and the Water Droplet Design are trademarks of Bayer. Used under license. Herculex® is a registered trademark of Dow AgroSciences LLC. Used under license. Respect the Refuge and Design is a registered trademark of the Canadian Seed Trade Association. Used under license. (3701-MON-E-12)
c o 1/6 u n tpage r y - vertical g u i d e .. 2.125 c a 4 x9 5” Country Guide
life
Peace in the family As we head into the holiday season, more and more farm parents are wondering. Can our family survive the tension? By Helen Lammers-Helps t can seem like they come one right after the other. First there’s Thanksgiving, then Christmas, and then Easter, without a single break in the burden of fretting and worrying that you have to carry. Sure it sounds great to have the kids all home. But will there actually be peace at the family table? Sometimes it can seem that farming is a minefield for the family, and it only gets worse as the kids get older, leading up to the day when you decide who gets the farm. In fact, farming can be even harder on families than other family businesses, because the farm isn’t only your business. It’s the family home too. Indeed, it may have been the family home for generations, which means the farm is a big part of how your children define themselves, and how they define you too. Elaine Froese, a farm family coach in Boissevain, Man. gets a lot of calls in the holiday season. “That’s when problems with family dynamics come to the surface,” Froese says. Often those problems had their real origin far earlier, but they’ve been allowed to simmer and stew because farmers often don’t know how to start difficult conversations. They want to avoid conflict, so the tough stuff doesn’t get talked about. Dennis Dwyer, a former family business mediator and author of This Business of Family (Shoreline Press, 2009), agrees but says it helps if people understand that conflict isn’t bad, it just is! Says Dwyer: “Like breathing, conflict is a fact of life.” Reg Shandro, a qualified mediator and succession planner in Lacombe, Alta. offers one more reason. Farmers often get top marks for focusing on the technical aspects of succession planning, paying close attention to things like taxes and legal documents. But they aren’t nearly so disciplined at considering the human side of the process. The good news is that it is possible for everyone to still be on speaking terms after a farm has been transferred from one generation to the next, as Froese, Dwyer and Shandro can prove from their own training and experience. Shandro recommends involving everyone in the process — including spouses — as early as possible. Explore what’s fair and have the facts to back it up, he says. “Open disclosure prevents conflict down the road,” he emphasizes. Dwyer agrees. Lay out the proposed scenario and invite feedback, he says. “There should be no 50 country-guide.ca
secrecy, no side deals.” Make sure everyone gets a chance to speak, even the quiet ones, he adds. Shandro advises the founders to make sure their will is up to date and that it adequately represents the current situation. Then they should disclose the contents to their children. “This way you can explain the logic if there’s been a pro rata distribution,” he says. “It’s better to avoid surprises.” Also be aware of the technical possibilities. Passing on the farm doesn’t have to be on an all-or-none approach, says Shandro. Non-farm siblings can still play a role, such as with a collaborative arrangement for some form of minority ownership in return for a contribution of labour or cash. That said, it’s still important to make sure there’s a formal agreement in place for how to unwind things if it doesn’t work out, Shandro says. “A handshake isn’t enough.” Acknowledging that the farm is also the repository of family memories can help make the transition to the next generation go more smoothly. The new owners can ensure that non-farm family members feel welcome at the farm to use the toboggan hill or walk the back lane. Shandro has one client who started an annual Thanksgiving gathering after he moved into his parents’ farmhouse so the family could continue to enjoy themselves at “their home.” “This went over very well, especially when in addition to this he gave each of his siblings a ‘meat package’ annually,” adds Shandro. This fits perfectly with Froese’s advice to farm families. She tells them to practise the three Cs: communicate, connect and celebrate! Good communication is essential, agrees Dwyer, and fortunately it’s learned behaviour, he says. Dwyer insists his clients take basic communications training. “This really works,” he says. “It saves time and money down the road.” Courses are readily available through your local community college, he adds. Shandro urges family members to talk about what the change means to them. What does it mean to the founders, the successors, or other family members? “If you don’t talk about it, there may be false assumptions,” he explains. All three experts offer tips for practising good family communication. • Use “I” messages. For example, start a conversation with “I’m angry because… ” instead of placing the blame on the other person. September 17, 2012
life
• Use active listening skills. Don’t be formulating your rebuttal while the other person is speaking. Make sure everyone gets a chance to speak. Using a “talking stick” can help. • K eep an open mind — you may not have the whole story. Go in with the mindset of a “learner” not a “judger.” • Watch your words! Avoid swearing, threatening, name calling, being a know-it-all, changing the subject, gossiping, making assumptions or using other unhelpful tactics. • Create a safe place to talk. Pick a place away from the farm, with the cellphones turned off and with stomachs full. • Don’t use the silent treatment or use access to grandchildren as emotional blackmail. • If issues arise, deal with them early. Issues tend to percolate and incubate and come up in a worse form down the road. • Examine your own role. Did you do or say something that could have contributed to the misunderstanding? • If you made a mistake, take responsibility, express remorse and make a gesture of kindness. If you have unintentionally hurt someone, acknowledge the hurt and express regret. Don’t tell people, “You shouldn’t feel that way” or, “I don’t know why you’re so upset.” • If you’ve attempted to mend fences but your overtures have been rebuffed, remember that you canSeptember 17, 2012
not force someone to forgive you or speak to you. At some point you need to accept that you’ve done all you can and learn to let go and move on. • If you’re the one who’s been wronged, remember that holding on to anger has been shown to cause depression and decrease life expectancy. Maybe it’s time to let go for your own sake. If communication breaks down, Dwyer recommends trying mediation before going to the courts. “The courts are designed to apply the law but do not concern themselves with fairness. “And they don’t resolve conflict,” he says. Besides, while mediation isn’t exactly cheap, it’s usually much, much cheaper than litigation, he adds. “Mediation can also help people see things in new ways so they can move forward.” If you decide to go the mediator route it’s important to select a trained professional, says Shandro. “Using someone who’s not trained can do more harm than good,” he warns. The Canadian Association of Farm Advisers (CAFA) at www.cafanet.com is one place to look for mediators who have an understanding of farming. Every parent wants a happy family and it’s a sad situation when the family is in turmoil. Shandro has taken a page from one of his own clients who told him, “We need to protect the family. If we protect the farm and the family’s needs aren’t met, then we may lose the farm anyway.” These are wise words indeed. CG country-guide.ca 51
h e a lt h
The skinny on fish oils By Marie Berry ish oils are promoted for everything from blood pressure control to cancer protection, and you can see shelves of various fish oil products in pharmacies and even grocery stores. The health benefits of fish oils were first noticed among Inuit people who have diets rich in fat and cholesterol, yet have a low risk for heart disease. The effect was traced back to the type of fats they consumed, mainly cold-water oily fish. However, today’s fish oils aren’t necessarily the cod liver oil that some of us took when we were children. Cod is indeed a source of fish oils, but so are salmon, mackerel, sardines, herring, anchovies, and bluefish. As well, rather than eating fish, many people take fish oil supplements.
Fish oils do improve cardiovascular health, but your best option may be to walk past all those pills and supplements, and buy cold-water fish to cook for supper twice a week The active ingredients are omega fatty acids which are essential to normal growth, but only a small amount is needed and an average diet contains more than enough. Fatty acids are classified according to their chemistry. Omega-6 fatty acids seem to be involved in healthy skin and kidneys. Omega-3 fatty acids seem to benefit the development of the brain, eyes, and nervous system, as well as contribute to healthy circulation. When omega-3 fatty acids combine in your body with substances like alpha linolenic acid or ALA,
So much of our lives is sensed through our eyes, but as we age our eyesight can change and we experience more eye problems. Next month, we’ll look at keeping your “baby blues” from getting “blue.”
52 country-guide.ca
they form eicosapentaenoic acid or EPA and docosahexaenoic acid or DHA. It is these larger molecules that have the health benefits. On average, only five per cent of omega-3 fatty acids are converted, and women seem to be more efficient at it than men. You probably have noticed that fish oil supplements may offer a combination of several of these substances. Indeed, when you read a product’s label, you may actually need to do some math to obtain the total fish oil content. In its official monograph, Health Canada recommends the maximum daily intake for adults be no more than 3,000 milligrams of a combination of EPA and DHA. This includes fatty acids from plant sources. For example flaxseeds, canola oil and soybean oil may contain omega-3s. Corn oil and safflower oil may contain omega-6s. Researchers have shown that fish oils do improve cardiovascular health. This may be due to reduced blood vessel inflammation, improved circulation, and/or reduced cholesterol levels. In the U.S., a prescription fish oil product is marketed for lowering triglycerides, which are a specific type of cholesterol. Drawbacks to taking any fish oil product include potential allergies, stomach upset, and “burping fish oil.” There is also the concern that the source of fish oil products could be contaminated with environmental mercury, dioxins, and PCBs. As well, fish oils can increase your risk for bleeding. Thus if you take any blood thinners or are undergoing surgery, including dental procedures, they are best avoided. While there are a wide variety of other claimed benefits for fish oils (for example joint pain, asthma, cancer prevention including colon cancer, depression, dementia, Crohn’s disease, eczema) none have scientifically been proven. Because studies have shown a wide variety of content among various manufacturers, you need to read labels carefully. Keep in mind that too much fish oil can lead to vitamin imbalances. An alternative to fish oil supplements is eating fish at least twice a week. Dietary sources are more compatible with your body, will provide other nutrients as well, and are much tastier than supplements. Marie Berry is a lawyer/pharmacist interested in health care and education. September 17, 2012
The silence is interrupted by the clatter of horses’ hooves, the warbling of mountain birds and the bawling of cattle. We saddled our horses in the early morning and began a long climb upward. Now we are almost at the tree line. Melting snow creates creeks and rivers. We are riding in a “box canyon,” a confined area bounded on three sides by mountains. It is an ideal range for cattle. The grass is lush and the streams of water are clear. I am riding with Hugh Simon, a retired RCMP officer who is contracted to ride the range and keep an eye on cattle belonging to several ranchers. Hugh watches out for sick cattle, cattle roaming outside their normal range, and the occasional rustler. Usually he rides alone. Knowing my interest in horseback riding, he invited me to join him for a few days. I am awed by the majestic mountain peaks, the rich-green vegetation and the colourful alpine flowers. Ranches in southwestern Alberta are few and far between. As we trailer the horses from one area to another, chance encounters with neighbours develop into lengthy chats. Pickups pull to the side of the road and the news is shared. One rancher has not seen his black bull for a few weeks. Could we spend some time searching for the wayward sire? We heard about a longtime rancher who is receiving chemotherapy treatment for cancer. A young man from Australia has purchased a ranch from a family who retired. Hugh is a master storyteller, full of anecdotes, legends, and amusing tales. One night after a steak supper and saskatoon pie he tells me a story about Cyprian Pinkham, one of my predecessors as Anglican bishop in Saskatchewan and southern Alberta. In 1909 a new log church at Rosebud Creek, northeast of Calgary, was ready for the dedication service. Bishop Pinkham and a clergyman named Thomas Castle rode horseback 35 miles to lead the service. They discovered most of the local residents were bachelors who had come to Alberta to homestead. As the bishop prepared his sermon, Castle attended to other arrangements. He asked one of the older men present to act as an usher, and he asked “the tallest cowboy… to take up the offertory.” The big fellow did not understand the word offertory so the parson explained it was the collection. Years later Castle related what happened next, to the consternation of the two clergymen. “The service went along well until I was preparing to ask for the offering. But the cowhand beat me to it. He walked to the front of the church, drew out his enormous revolver and told the congregation, ‘We are taking up an offering and it’s going to be a good one. If anyone puts less than $10 on this plate, I’ll shoot him right there.’ He then walked through the standing congregation with the pistol in one hand and the collection plate in the other. It was the best collection I ever saw.” Local legend says the “cowhand” was big Jack Morton, often called Wildhorse Jack. I wonder what Bible text Bishop Pinkham chose? Perhaps he preached on Exodus 35:21 “And they came, every one whose heart stirred him up, and every one whom his spirit made willing, and they brought the Lord’s offering.” Alternately he may have selected a text from 2 Corinthians: “Each of you must give as you have made up your mind, not reluctantly or under compulsion, for God loves a cheerful giver.” Suggested Scripture: Exodus 35:20-19, 2 Corinthians 9
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Rod Andrews is a retired Anglican bishop. He lives in Saskatoon. September 17, 2012
country-guide.ca 53
Va l l e y
Seeking inner strength
ILLUSTRATION: RICK KURKOWSKI
Dan Needles is the author of “Wingfield Farm” stage plays. His column is a regular feature in Country Guide stumbled into the Kingbird Cafe a couple of weeks ago, limping more than usual after an attempt to treat the ram for foot rot. If you’re a shepherd, foot rot is all part of the rich tapestry of agriculture. The guidebook tells you to catch it early, and to separate and treat the animal before the problem spreads around the flock. You just roll the patient up on its bum, give it a shot of long-acting antibiotic in the neck and paint a lot of copper sulphate between the toes. My ram, Cato, weighs 250 pounds. I did manage to roll Cato over, but he rolls like a grand piano. I didn’t get my knee out of the way in time and I ended up underneath him. A Mexican standoff followed for about a minute, which was just long enough to separate the triceps surae from my Achilles tendon. Not serious, but I am limping for the moment. “What does the other guy look like?” asked my neighbour, Vern Bunton, as I gingerly slid into the booth. “The judges gave me the decision based on points,” I replied. “Cato has 10 ccs of penicillin in him and his toes are painted.” “Good for you,” said Bob Pargeter, the cash cropper. “I’ve got a stitch, too, up here in my back. I think it’s from sitting in the combine all day and then trying to throw a tarp over the grain buggy in a cold wind.” “Yeah,” said old Owly Drysdale. “I’ve got a stitch right here above my ankle and it goes all the way up to my left ear. Probably from dosing cattle without a squeeze for the past 60 years.” Vern Bunton’s son Matt listened to us complain about our late-season ailments and observed, “If you guys were in bet54 country-guide.ca
ter physical condition, you wouldn’t be so prone to injury.” Matt is the youngest person to take up farming in Petunia Valley since 1985. He works out every day, something he picked up while he was at college studying crop science and marketing. “I get lots of exercise,” said Bob with a snort. “I’m moving all day.” “Nothing a farmer does, short of throwing a few hay bales, really qualifies as exercise,” said Matt. “It’s just slugging.” “Do you want me to jog or something… at my age?” asked Bob. “You should all come to my yoga class on Monday night,” said Matt. Vern turned to us with a big grin and shrugged. “What can I say? Sometimes I don’t know if he’s my kid.” “Yoga,” said Bob, waving a bear paw at Matt. “I tried that once but my dogma got out and it got run over by my karma.” “You laugh,” said Matt, “but yoga is something you can do anywhere, even in the combine. It’s great for building inner core strength. And you would find meditation really interesting.” “Meditation?” mused Bob. “I guess it beats sitting around doing nothing.” “What it beats,” said Vern, “is staring at the yield monitor with your shoulders all tense and hunched up, chewing your fingernails. No wonder you have a stitch in your back.”
Bob hid his fingernails in his pockets. “You mean you’re doing this, too?” Vern smiled and nodded. So the following Monday night, the Petunia Valley Leisure Time Club played host to one of the more macabre spectacles of the season, with six farmers off the Petunia Valley Sideroad doing the Downward Dog in spandex. Under the instruction of Marnie, proprietor of Urth Yoga, we learned to breathe in sympathy with the natural vibration of the traffic on William Street and open ourselves to the sublime indifference of the universe. For an hour we wound ourselves into pretzel shapes and tried to touch our toes with our tongues. It was exhausting but quite refreshing. Finally, Bob unwound his leg from his elbow. “If my foot gets any closer to my face, is there any chance I’ll start chewing my toenails next?” “As you learn to free yourself from all attachments, such behaviour will become unnecessary,” said Marnie gently. Bob turned pale. “She wants me to give up my attachments?” “Relax. She’s not talking about your loader tractor,” said Vern. “She means you have to let go of your attachment to the physical world. That’s what it’s all about.” Bob sighed with relief. “Please forgive me, Yogi Marnie,” he said. “Stupid me. All this time I have thought the Hokey Pokey was what it was all about.” September 17, 2012
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