Column # 675 23/06/08
Chalk up another loss for Stephen Harper's government at the hands of
the Canadian Constitution. Two years ago then Agriculture Minister Chuck
Strahl slapped a gag order on the Canadian Wheat Board, prohibiting it
from doing anything to defend itself against attacks by the government
or the small anti-CWB groups that have sole access to the Minister's
ear. The CWB appealed this order to the federal court of Canada and the
ruling finally came down at the end of last week. Once again, as has
happened twice before, the Harper government was judged to have broken
the laws of the country in regard to the CWB.
Defenders of the gag order maintained it merely prevented the CWB from
spending farmers' money on propaganda. The federal court judge saw it
otherwise, saying, "It is entirely clear, therefore, that the directive
is motivated principally to silencing the Wheat Board in respect of any
promotion of a 'single desk' policy that it might do."
In fact, the gag order even prevented the Board from putting on its
website independent academic studies conducted at the University of
Saskatchewan and other such institutions. In this regard, the
government's strategy, as revealed in recent court documents seems to
have worked. Support for the CWB edged downward slightly in the recent
poll the Board conducted. As the independent pollster commented, if you
allow one side to speak and gag the other, the side able to put out its
message will gain support.
The CWB has now taken the federal government to court over four issues.
It has won three of them. The fourth was also ruled on last week. It was
the appeal of the government order requiring the CWB to pay Greg Arason
the paltry sum of $30,000 per month when the government fired Adrian
Measner and imposed Arason on the CWB as CEO.
Legally, the government could do that, since the CWB Act allows it to
appoint the CEO. However, the act also says that the directors set the
salary for the CEO. Harper's government refused to allow the CWB to do
this. The Board appealed, with the judge ruling that the case was now
moot. This means, essentially, that it is irrelevant, because Arason is
no longer the CEO, having taken his pitiful allowance and retired to
Florida.
Here again the government's strategy seems to have worked. The court
system moved so slowly that Arason did his appointed tenure, and his
damage as CEO, and got out while the getting was good, long before the
court caught up with his political masters. Had the court acted in a
timely manner, the government might not have been able to impose its
will on the directors whom farmers elected to run the CWB. The positive
aspect of the court decision is that it reaffirmed strongly that running
the CWB is the job of the directors, not the government.
Given the outcome of the three cases the courts did rule on, all in the
CWB's favor, you have to think the government has some pretty lousy
lawyers working for it if they keep advising courses of action that are
illegal. Not true, I suspect. The government's lawyers likely knew the
actions the government undertook were illegal, but the government went
ahead, knowing that it would accomplish some of its goals anyway. As I
said earlier, it did seem to improve its position in the battle for
public opinion, even if it ultimately lost the war at the courts. Same
for the firing of Measner and appointment of Arason. Among other things,
Arason fired Deanna Allen, as the anti-CWB groups had demanded, and got
his golden handshake.
It's a pretty cynical way for a government to act, but the government
appears to have gotten away with it to a great extent. While these
actions were condemned by some major farm groups, like Keystone
Agriculture Producers, the National Farmers Union and the Canadian
Federation of Agriculture, others were less vocal. APAS and SARM, the
farm groups in Saskatchewan that claim to have the broadest
constituencies, were silent on the government's illegal actions. Nor
should you expect much reaction now. SARM has effectively dropped out of
farm policy, while APAS is too busy firing its policy people to look up
from the vantage point it has between its legs. The APAS executive is
unlikely to criticize anything Conservative, no matter how undemocratic.
What's next on Harper's agenda for the CWB? Expect it to come in the
form of attempting to Gerry-mander the upcoming CWB director elections.
Harper's response to the court ruling was to maintain he would break the
CWB's single desk, no matter what, threatening to "walk over" anyone who
stands in his way. For now, however, the courts have said that even
Harper's government can't walk over the Canadian Constitution.
(c) Paul Beingessner
Monday, June 23, 2008
Monday, June 16, 2008
Farmers Pay the Piper, Someone Else Calls the Tune
Column # 674 16/06/08
Just an opinion here, but if ever there was an issue that farmers have
messed up, it has to be the issue of control over new plant varieties.
There was a time when development of new crop varieties was largely done
by universities and federal and provincial government research centres.
Varieties were distributed to grower organizations and royalties were
collected from them based on seed sales. The system worked, according to
plant breeders I've talked to.
It worked that is, for farmers and plant breeders. However, chemical
companies began to see the possibility of integrating sales of chemicals
with seed sales. If they could just breed plants that required their
chemicals, what a wonderful world it would be. Even better if they could
make money off the sale of both the chemical and the seed. The cherry on
top would be if farmers had to buy the seed every year.
Of course, all this wasn't possible within the legislative framework
that existed twenty years ago. The Plant Breeders Rights Act changed all
that. It continued to allow farmers to save seed for their own use, but
disallowed them from selling it, or giving it away to anyone. It allowed
companies, in effect, to control the release of varieties. Largely,
these were not varieties any company had developed, since most research
continued to be done with public and farmer money. Companies simply bid
for the right to "own" a variety. The trade-off was that money from the
purchasing of the rights to a variety went back to fund further
research. The problem was that farmers were now also contributing to the
fattening of the profits of seed companies.
Plant breeders rights were expanded further when governments, like
Canada, decided they would allow for the patenting of life forms. This
had been a no-no for as long as patents existed. The result, besides all
the bio-piracy that ensued, was to see companies patenting genes from
plants. This gave them the right to control not just the seed the farmer
planted, but also the seed he grew, so that companies are now able to
force farmers to follow their every dictum if they want to grow certain
varieties. An example in Canada is the requirement imposed by several
rights holders that you sell your production through certain channels,
and not to anyone else.
Farmers have always played a part in funding plant breeding. This has
been done through royalties they pay on certified seed and through
check-offs on the sale of crops. An example is the wheat and barley
check-off administered by the Canadian Wheat Board. In fact, if you get
right down to it, farmers or taxpayers pay for all plant breeding.
Private companies that do some breeding simply use money derived from
seed sales to farmers. A lot more of that money goes to other things.
One plant breeder working for a multinational company complained to me
that he would be ecstatic if his research budget was even a small
fraction of the money the company spent on advertising.
The trouble with plant breeding today is that research done by the
public sector is increasingly being turned over to the private sector to
allow it to make greater profits from farmers. The public good seems
forgotten in all this. And we are barely seeing the tip of the iceberg.
Farmers are still growing many varieties that were registered under the
old system and before the craze for proprietary ownership took over.
Immediately following the implementation of Plant Breeders Rights, few
varieties were covered. Now, virtually every new variety that comes out
is protected by PBRs. As well, chemical seed and grain companies like
Viterra and Farm Pure Seeds are increasingly tying up farmers with
contractual arrangements which don't even allow them to save their own
seed of publicly developed varieties.
And ultimately, farmers are to blame for this. They could have a great
deal of control over the registration process, since they contribute
huge amounts to plant breeding, and they have input through
organizations like the Western Grains Research Foundation, but they've
allowed a system to develop that serves the best interests of seed
companies and seed growers. And don't think it's done yet. Seed growers
have been lobbying for such measures as requiring the use of pedigreed
seed if you want to participate in crop insurance programs.
Transnationals like Monsanto want to collect royalties when the farmer
sells his crop to be sure they get every pound of flesh available.
A recent report done for the federal government might have some
implications for all this. The report on "Inter-Sectoral Partnerships
for Non-Regulatory Federal Laboratories" is suggesting a new research
center be developed. It would be called the Canadian Cereal Research and
Innovation Laboratory (CCRIL) and would bring together many of the
agencies involved in cereal research. While this may be as simple as
housing different agencies under a single roof, the implications may
reach further. The report strongly suggested that the best model for
research was one that integrated federal government research agencies
with provincial universities and the private sector under a management
scheme that was independent of the federal government.
Given the bent of the current federal government, this sounds an awful
lot like privatisation to me. However, the proponents of the CCRIL are
mostly public sector. They include the Canadian Grain Commission, the
Canadian International Grains Institute, the University of Manitoba and
the Canadian Wheat Board.
Perhaps the notion of a new research center opens an opportunity for
farmers to re-examine the registration system and who benefits from it.
It really is time the guy paying the piper started to call the tune.
(c) Paul Beingessner
Just an opinion here, but if ever there was an issue that farmers have
messed up, it has to be the issue of control over new plant varieties.
There was a time when development of new crop varieties was largely done
by universities and federal and provincial government research centres.
Varieties were distributed to grower organizations and royalties were
collected from them based on seed sales. The system worked, according to
plant breeders I've talked to.
It worked that is, for farmers and plant breeders. However, chemical
companies began to see the possibility of integrating sales of chemicals
with seed sales. If they could just breed plants that required their
chemicals, what a wonderful world it would be. Even better if they could
make money off the sale of both the chemical and the seed. The cherry on
top would be if farmers had to buy the seed every year.
Of course, all this wasn't possible within the legislative framework
that existed twenty years ago. The Plant Breeders Rights Act changed all
that. It continued to allow farmers to save seed for their own use, but
disallowed them from selling it, or giving it away to anyone. It allowed
companies, in effect, to control the release of varieties. Largely,
these were not varieties any company had developed, since most research
continued to be done with public and farmer money. Companies simply bid
for the right to "own" a variety. The trade-off was that money from the
purchasing of the rights to a variety went back to fund further
research. The problem was that farmers were now also contributing to the
fattening of the profits of seed companies.
Plant breeders rights were expanded further when governments, like
Canada, decided they would allow for the patenting of life forms. This
had been a no-no for as long as patents existed. The result, besides all
the bio-piracy that ensued, was to see companies patenting genes from
plants. This gave them the right to control not just the seed the farmer
planted, but also the seed he grew, so that companies are now able to
force farmers to follow their every dictum if they want to grow certain
varieties. An example in Canada is the requirement imposed by several
rights holders that you sell your production through certain channels,
and not to anyone else.
Farmers have always played a part in funding plant breeding. This has
been done through royalties they pay on certified seed and through
check-offs on the sale of crops. An example is the wheat and barley
check-off administered by the Canadian Wheat Board. In fact, if you get
right down to it, farmers or taxpayers pay for all plant breeding.
Private companies that do some breeding simply use money derived from
seed sales to farmers. A lot more of that money goes to other things.
One plant breeder working for a multinational company complained to me
that he would be ecstatic if his research budget was even a small
fraction of the money the company spent on advertising.
The trouble with plant breeding today is that research done by the
public sector is increasingly being turned over to the private sector to
allow it to make greater profits from farmers. The public good seems
forgotten in all this. And we are barely seeing the tip of the iceberg.
Farmers are still growing many varieties that were registered under the
old system and before the craze for proprietary ownership took over.
Immediately following the implementation of Plant Breeders Rights, few
varieties were covered. Now, virtually every new variety that comes out
is protected by PBRs. As well, chemical seed and grain companies like
Viterra and Farm Pure Seeds are increasingly tying up farmers with
contractual arrangements which don't even allow them to save their own
seed of publicly developed varieties.
And ultimately, farmers are to blame for this. They could have a great
deal of control over the registration process, since they contribute
huge amounts to plant breeding, and they have input through
organizations like the Western Grains Research Foundation, but they've
allowed a system to develop that serves the best interests of seed
companies and seed growers. And don't think it's done yet. Seed growers
have been lobbying for such measures as requiring the use of pedigreed
seed if you want to participate in crop insurance programs.
Transnationals like Monsanto want to collect royalties when the farmer
sells his crop to be sure they get every pound of flesh available.
A recent report done for the federal government might have some
implications for all this. The report on "Inter-Sectoral Partnerships
for Non-Regulatory Federal Laboratories" is suggesting a new research
center be developed. It would be called the Canadian Cereal Research and
Innovation Laboratory (CCRIL) and would bring together many of the
agencies involved in cereal research. While this may be as simple as
housing different agencies under a single roof, the implications may
reach further. The report strongly suggested that the best model for
research was one that integrated federal government research agencies
with provincial universities and the private sector under a management
scheme that was independent of the federal government.
Given the bent of the current federal government, this sounds an awful
lot like privatisation to me. However, the proponents of the CCRIL are
mostly public sector. They include the Canadian Grain Commission, the
Canadian International Grains Institute, the University of Manitoba and
the Canadian Wheat Board.
Perhaps the notion of a new research center opens an opportunity for
farmers to re-examine the registration system and who benefits from it.
It really is time the guy paying the piper started to call the tune.
(c) Paul Beingessner
Tuesday, June 10, 2008
American Farmers Get Break on Parts
Column #673 American Farmers Get Break on Parts 09/06/08
As we shared the loading of a producer car last week, my cousin shook
his head in amazement. "You know, half of this car is worth about
$20,000." It put a bit of a glow on an otherwise cool day to realize
that he was right. High protein number one durum is at a premium price
this year and dropping it into a producer car put the icing on the cake.
I grabbed the mail on the way home when the job was done. I should have
waited a while to open it, what with the glow still lingering. The fuel
bill that came in that day's mail wiped off my smile and caused a
reassessment of my good fortune. Call it sticker shock, I guess, but the
bill for diesel fuel that accompanied this year's seeding brought a
different kind of shine to my face. That last fill cost me $1.15 per
litre for diesel, while gasoline carried a price of $1.21 a litre.
It prompted me to dig out last year's spring fuel bill. Back then, durum
may have been a fraction of today's price, but so was fuel, with diesel
at 72.9 cents a litre and gasoline at $106.9. Probably few farmers are
assuming the price has peaked either. If gasoline might hit $1.50 by
July, we can expect diesel to be close behind.
The increase in fuel costs has prompted many urban motorists to blow the
dust off the bicycle and has even started some debating the merits of
the city bus. Farmers don't get much use from those two items, burdened
down as we are by fuel tanks and tools and large implements, but farmers
too are looking for ways to cut fuel consumption.
When it comes to buying parts however, they may want to consider the
benefits of burning a bit more fuel, at least if they're within driving
distance of the U.S. Equipment parts, of every type and for every brand,
appear to be much lower priced in our neighbour to the south. While I
might have been able to understand this when the Canadian dollar was at
70 cents U.S., it becomes a bit more difficult to swallow when the
dollar is at par, or higher.
How big are the differences? I did some comparisons between prices in
Saskatchewan and in Minot, North Dakota, about 240 miles south east of
my farm. The differences were strikingly consistent, from John Deere to
New Holland to CIH and Versatile. Parts at Minot were generally about 24
percent lower than the same part in Saskatchewan. This held not only
from one manufacturer to another, but from tractors to haybines to
balers, and from small items to big.
A tachometer for an ageing 3020 John Deere tractor will set you back
$283 in Saskatchewan but only cost $230 in Minot. A hydraulic pump for a
somewhat newer 4430 costs $2,171 in Regina but you could save $421 by
taking that trip to North Dakota. A remanufactured engine for a 8460
John Deere tractor finds a price of $12,900 in Minot, but somehow is
worth $15,983 when the currency and location are Canadian.
While car buyers have complained bitterly about the difference in auto
prices between here and the U.S., to some positive effect, farmers have
been rather quiet about the prices they have to pay for parts. One
fellow at a parts counter assured me that the price difference had
indeed declined recently, but that only served to make me more annoyed
as I contemplated the rip-off I have apparently been enduring for some
time. He also said that the price spread on new equipment was hurting
their business.
Not every farmer in the west is close enough to a major U.S. city to run
down for every parts order. However, the farmer who needs a big ticket
repair item, or who compiles a list of smaller ones might find a
handsome reward in taking a trip south. If enough farmers do it,
Canadian dealers will have to find ways to pressure their parent
companies to stop treating Canadian farmers like a huge cash cow. If the
rise in the Canadian dollar has driven down the price of many of the
products we sell, we should at least be able to get some small benefit
from it.
(c) Paul Beingessner
As we shared the loading of a producer car last week, my cousin shook
his head in amazement. "You know, half of this car is worth about
$20,000." It put a bit of a glow on an otherwise cool day to realize
that he was right. High protein number one durum is at a premium price
this year and dropping it into a producer car put the icing on the cake.
I grabbed the mail on the way home when the job was done. I should have
waited a while to open it, what with the glow still lingering. The fuel
bill that came in that day's mail wiped off my smile and caused a
reassessment of my good fortune. Call it sticker shock, I guess, but the
bill for diesel fuel that accompanied this year's seeding brought a
different kind of shine to my face. That last fill cost me $1.15 per
litre for diesel, while gasoline carried a price of $1.21 a litre.
It prompted me to dig out last year's spring fuel bill. Back then, durum
may have been a fraction of today's price, but so was fuel, with diesel
at 72.9 cents a litre and gasoline at $106.9. Probably few farmers are
assuming the price has peaked either. If gasoline might hit $1.50 by
July, we can expect diesel to be close behind.
The increase in fuel costs has prompted many urban motorists to blow the
dust off the bicycle and has even started some debating the merits of
the city bus. Farmers don't get much use from those two items, burdened
down as we are by fuel tanks and tools and large implements, but farmers
too are looking for ways to cut fuel consumption.
When it comes to buying parts however, they may want to consider the
benefits of burning a bit more fuel, at least if they're within driving
distance of the U.S. Equipment parts, of every type and for every brand,
appear to be much lower priced in our neighbour to the south. While I
might have been able to understand this when the Canadian dollar was at
70 cents U.S., it becomes a bit more difficult to swallow when the
dollar is at par, or higher.
How big are the differences? I did some comparisons between prices in
Saskatchewan and in Minot, North Dakota, about 240 miles south east of
my farm. The differences were strikingly consistent, from John Deere to
New Holland to CIH and Versatile. Parts at Minot were generally about 24
percent lower than the same part in Saskatchewan. This held not only
from one manufacturer to another, but from tractors to haybines to
balers, and from small items to big.
A tachometer for an ageing 3020 John Deere tractor will set you back
$283 in Saskatchewan but only cost $230 in Minot. A hydraulic pump for a
somewhat newer 4430 costs $2,171 in Regina but you could save $421 by
taking that trip to North Dakota. A remanufactured engine for a 8460
John Deere tractor finds a price of $12,900 in Minot, but somehow is
worth $15,983 when the currency and location are Canadian.
While car buyers have complained bitterly about the difference in auto
prices between here and the U.S., to some positive effect, farmers have
been rather quiet about the prices they have to pay for parts. One
fellow at a parts counter assured me that the price difference had
indeed declined recently, but that only served to make me more annoyed
as I contemplated the rip-off I have apparently been enduring for some
time. He also said that the price spread on new equipment was hurting
their business.
Not every farmer in the west is close enough to a major U.S. city to run
down for every parts order. However, the farmer who needs a big ticket
repair item, or who compiles a list of smaller ones might find a
handsome reward in taking a trip south. If enough farmers do it,
Canadian dealers will have to find ways to pressure their parent
companies to stop treating Canadian farmers like a huge cash cow. If the
rise in the Canadian dollar has driven down the price of many of the
products we sell, we should at least be able to get some small benefit
from it.
(c) Paul Beingessner
Bemoaning the State of the Beef Industry
Column # 672 Bemoaning the State of the Beef Industry 02/06/08
From time to time, folks commenting on the state of the beef industry
in Canada will bemoan the fact that, post-BSE, we are still heavily
dependent on the U.S. as a market for our cattle. It seems, in fact,
that we have ramped up cattle exports to our southern neighbour to the
point where they now exceed the numbers we were shipping before Mad Cow
reared its ugly head.
While the moaners usually don't blame any specific group for this
short-sightedness, preferring instead to use the meaningless "we", it is
clear farmers are seen as one of the guilty parties. And they should be,
but not in the way you might think. Farmers in many parts of Canada did
their best to generate other ways of marketing their beef. They
supported a number of new beef slaughtering initiatives, most of them
focused on developing niche markets for some specialty type of beef, be
it grass-fed, natural, or cull cow. This is what they did, but
unfortunately the results have been less than sterling. Most of the
plans came to nothing, and most of those that got beyond the planning
stage didn't last long after opening.
These two things, the failure of local initiatives and the renewed focus
on American markets were predicted by many and were completely logical.
The local initiatives were doomed from the start. Most relied on overly
optimistic scenarios generated by consultants who knew that a consultant
with negative reports will have a relatively short career. They were
likely the same consulting firms that a decade ago were recommending a
pulse processing plant at every siding. Prior to that, they made their
living by recommending hog barns ad infinitum.
In truth, niche markets for specially raised beef have always been quite
limited. Even discriminating consumers will only pay a small premium for
their vices. And the cull cow and bull operations have to compete with a
product that oozes from the large packers in unbelievable quantities.
Competing head on with Cargill is not a recipe for success.
That Canadian cattle are again gravitating to the U.S. in huge numbers
is scant surprise. Cattle will go where the cheapest feed and the lowest
cost labour are found. American corn, biofuel demand notwithstanding, is
still a cheaper feed than nearly anything else. And Alberta's packing
plants, the largest in Canada, are competing for labour with a booming
oil sector that pays real wages.
That my friends is the free market. In today's environment of global,
monopoly capitalism, farmers can have little impact on the direction
that market moves. There certainly never was any opportunity for farmers
to somehow influence the development of new markets for Canadian beef.
Farmers are not players in the packing industry today, except in Quebec.
That business is held tightly in the grip of about four companies. They
are the ones who develop markets, and they do so in whatever way suits
their needs, not the needs of Canadian farmers and ranchers. Nor is
their much point blaming the big packers. They are just doing what they
are able to do in an environment where there are few rules.
In light of this, why do I say that farmers are to blame? It is because
farmers typically see only three possible responses to a melt-down like
that caused by BSE. They can fold and leave the industry, they can
decide to tough it out and hope for better times, or they can remain
peripherally in the industry while finding other ways to make a living.
The other possibility, that of working together to find the root causes
of the industry's troubles and exploring alternative ways of organizing
the industry, doesn't seem to be on the radar for farmers.
Now, as feedlots close in beef country we are told to find a new way of
raising our cattle. Feed grains are too expensive so cattle must stay on
grass longer and face shorter periods in a feedlot. This is not a bad
thing. It may in fact be a good thing from an environmental and animal
welfare point of view. But the reality is that farmers are told to keep
their calves six to 12 months longer, and then sell them for the same
price they were getting for six-month-old calves in 2002. How does that
work?
Meanwhile, beef industry observers are telling us that those who hang on
are going to be the winners when the price eventually goes up. Sounds
like some consultants I know...
(c) Paul Beingessner
From time to time, folks commenting on the state of the beef industry
in Canada will bemoan the fact that, post-BSE, we are still heavily
dependent on the U.S. as a market for our cattle. It seems, in fact,
that we have ramped up cattle exports to our southern neighbour to the
point where they now exceed the numbers we were shipping before Mad Cow
reared its ugly head.
While the moaners usually don't blame any specific group for this
short-sightedness, preferring instead to use the meaningless "we", it is
clear farmers are seen as one of the guilty parties. And they should be,
but not in the way you might think. Farmers in many parts of Canada did
their best to generate other ways of marketing their beef. They
supported a number of new beef slaughtering initiatives, most of them
focused on developing niche markets for some specialty type of beef, be
it grass-fed, natural, or cull cow. This is what they did, but
unfortunately the results have been less than sterling. Most of the
plans came to nothing, and most of those that got beyond the planning
stage didn't last long after opening.
These two things, the failure of local initiatives and the renewed focus
on American markets were predicted by many and were completely logical.
The local initiatives were doomed from the start. Most relied on overly
optimistic scenarios generated by consultants who knew that a consultant
with negative reports will have a relatively short career. They were
likely the same consulting firms that a decade ago were recommending a
pulse processing plant at every siding. Prior to that, they made their
living by recommending hog barns ad infinitum.
In truth, niche markets for specially raised beef have always been quite
limited. Even discriminating consumers will only pay a small premium for
their vices. And the cull cow and bull operations have to compete with a
product that oozes from the large packers in unbelievable quantities.
Competing head on with Cargill is not a recipe for success.
That Canadian cattle are again gravitating to the U.S. in huge numbers
is scant surprise. Cattle will go where the cheapest feed and the lowest
cost labour are found. American corn, biofuel demand notwithstanding, is
still a cheaper feed than nearly anything else. And Alberta's packing
plants, the largest in Canada, are competing for labour with a booming
oil sector that pays real wages.
That my friends is the free market. In today's environment of global,
monopoly capitalism, farmers can have little impact on the direction
that market moves. There certainly never was any opportunity for farmers
to somehow influence the development of new markets for Canadian beef.
Farmers are not players in the packing industry today, except in Quebec.
That business is held tightly in the grip of about four companies. They
are the ones who develop markets, and they do so in whatever way suits
their needs, not the needs of Canadian farmers and ranchers. Nor is
their much point blaming the big packers. They are just doing what they
are able to do in an environment where there are few rules.
In light of this, why do I say that farmers are to blame? It is because
farmers typically see only three possible responses to a melt-down like
that caused by BSE. They can fold and leave the industry, they can
decide to tough it out and hope for better times, or they can remain
peripherally in the industry while finding other ways to make a living.
The other possibility, that of working together to find the root causes
of the industry's troubles and exploring alternative ways of organizing
the industry, doesn't seem to be on the radar for farmers.
Now, as feedlots close in beef country we are told to find a new way of
raising our cattle. Feed grains are too expensive so cattle must stay on
grass longer and face shorter periods in a feedlot. This is not a bad
thing. It may in fact be a good thing from an environmental and animal
welfare point of view. But the reality is that farmers are told to keep
their calves six to 12 months longer, and then sell them for the same
price they were getting for six-month-old calves in 2002. How does that
work?
Meanwhile, beef industry observers are telling us that those who hang on
are going to be the winners when the price eventually goes up. Sounds
like some consultants I know...
(c) Paul Beingessner
Joy in Mudville
Column # 671 Joy in Mudville 26/05/08
The drought affecting farmers in many parts of the prairie provinces is
starting to take on frightening proportions. That there is a drought is
not news for farmers south of the Trans Canada Highway, who have endured
several years of it, but even these weather-beaten folk might be
surprised to hear how far afield that drought has travelled. A recent
listing of rainfall in Saskatchewan from April 1 onward showed that the
three driest points in the province were Estevan (south east), Val Marie
(south west) and Prince Albert (north central). While a few pockets have
received adequate rain, there is a lot of dry land in between.
Travelling west on the Trans Canada last week, I saw Reed Lake, a saline
lake that butts against the highway east of Swift Current. In the spring
it is usually teeming with shorebirds and waterfowl. It was a first for
me to see the lake entirely dry, its salt-encrusted shores now extending
south to the horizon.
Closer to home, the coulees and creek that provide surface water and
shallow wells for many farmers in this area failed to run at all this
spring. It is only the second time in my life I can recall this
happening. Sloughs in the Missouri Couteau west and south of our farm,
which usually produce ducks in the spring and hay in late summer, are
dry. Pastures have hardly grown an inch or two, and farmers are
struggling to find enough grass to carry their livestock while they
await the rain. We have had no really meaningful rain since last May.
The prospect of poor crops in one of the best years for price in recent
memory might make a grain farmer glum, especially considering the value
of inputs that went into the ground with that seed. Bit it is livestock
producers who have a great deal to sweat about immediately. Most have
consumed any reserves of hay they may have had, and pastures were
overgrazed in many areas last year. Hay grows in May and June, and May
has been abysmally dry. There are about four weeks left to make a hay
crop, and it will take a lot of rain.
So it's been tough around here. I've tried to hold the cattle off their
summer pasture, as the grass is very short, and won't last long, but I
figure the spring pasture will hold them for only a few more days.
Fretting and staring at the sky have become near-constant occupations on
the farm.
Fortunately, things get put into perspective now and then, and a phone
call from a nephew did that for me today. He told a story of a rancher
in the Climax area in southwest Saskatchewan who had purchased a large
quantity of hay from my nephew's neighbour last year. The hay had to be
trucked several hundred miles. In the winter, the rancher bought the
rest of the hay. He phoned the fellow who sold the hay recently to ask
what things looked like for this year. The rancher had fed all the hay,
his pastures were bare from lack of rain and his dugouts had gone
completely dry. He had broken up some of his hay and pastureland in an
attempt to starve the flourishing gopher populations. He was now looking
for a place to pasture his cows in the northern grainbelt. No doubt his
neighbours are in the same position.
Bad as our own situation is, that story made me stop to count my
blessings. If the drought continues, we may be in that rancher's
position soon, but we aren't quite there yet.
This weekend, a bit of rain fell across much of the southern prairies.
There was great joy in mudville at the notion that crops in dry soil now
at least have a chance to germinate. It was only a half-inch, but at
least we know now that it can still rain in this country. We were
starting to doubt that.
(c) Paul Beingessner
The drought affecting farmers in many parts of the prairie provinces is
starting to take on frightening proportions. That there is a drought is
not news for farmers south of the Trans Canada Highway, who have endured
several years of it, but even these weather-beaten folk might be
surprised to hear how far afield that drought has travelled. A recent
listing of rainfall in Saskatchewan from April 1 onward showed that the
three driest points in the province were Estevan (south east), Val Marie
(south west) and Prince Albert (north central). While a few pockets have
received adequate rain, there is a lot of dry land in between.
Travelling west on the Trans Canada last week, I saw Reed Lake, a saline
lake that butts against the highway east of Swift Current. In the spring
it is usually teeming with shorebirds and waterfowl. It was a first for
me to see the lake entirely dry, its salt-encrusted shores now extending
south to the horizon.
Closer to home, the coulees and creek that provide surface water and
shallow wells for many farmers in this area failed to run at all this
spring. It is only the second time in my life I can recall this
happening. Sloughs in the Missouri Couteau west and south of our farm,
which usually produce ducks in the spring and hay in late summer, are
dry. Pastures have hardly grown an inch or two, and farmers are
struggling to find enough grass to carry their livestock while they
await the rain. We have had no really meaningful rain since last May.
The prospect of poor crops in one of the best years for price in recent
memory might make a grain farmer glum, especially considering the value
of inputs that went into the ground with that seed. Bit it is livestock
producers who have a great deal to sweat about immediately. Most have
consumed any reserves of hay they may have had, and pastures were
overgrazed in many areas last year. Hay grows in May and June, and May
has been abysmally dry. There are about four weeks left to make a hay
crop, and it will take a lot of rain.
So it's been tough around here. I've tried to hold the cattle off their
summer pasture, as the grass is very short, and won't last long, but I
figure the spring pasture will hold them for only a few more days.
Fretting and staring at the sky have become near-constant occupations on
the farm.
Fortunately, things get put into perspective now and then, and a phone
call from a nephew did that for me today. He told a story of a rancher
in the Climax area in southwest Saskatchewan who had purchased a large
quantity of hay from my nephew's neighbour last year. The hay had to be
trucked several hundred miles. In the winter, the rancher bought the
rest of the hay. He phoned the fellow who sold the hay recently to ask
what things looked like for this year. The rancher had fed all the hay,
his pastures were bare from lack of rain and his dugouts had gone
completely dry. He had broken up some of his hay and pastureland in an
attempt to starve the flourishing gopher populations. He was now looking
for a place to pasture his cows in the northern grainbelt. No doubt his
neighbours are in the same position.
Bad as our own situation is, that story made me stop to count my
blessings. If the drought continues, we may be in that rancher's
position soon, but we aren't quite there yet.
This weekend, a bit of rain fell across much of the southern prairies.
There was great joy in mudville at the notion that crops in dry soil now
at least have a chance to germinate. It was only a half-inch, but at
least we know now that it can still rain in this country. We were
starting to doubt that.
(c) Paul Beingessner
When Mud Pies Are No Longer a Game
Column # 670 19/05/08
When I was a kid, my two older sisters were experts at making mud pies.
In fact, their expertise went far beyond the lowly mud pie. They made
mud cookies, mud cakes, mud vegetables and even mud mashed potatoes.
After careful shaping and drying in the sun, they looked good enough to
eat. Which we did, sort of. Part of getting into the game, and being
allowed to be there at all, was to play along with the fantasy,
pretending to nibble at the food, while exclaiming over the skill of the
cooks.
My sisters eventually went on to other things, like teaching and
nursing. But it is kind of comforting to know that, had they not been
successful at these occupations, they could have put the skills of
childhood to good use, even as adults. They could have, that is, if they
lived in Haiti. In Haiti, grown people make mud cookies. But, unlike my
younger siblings and me, eating them isn't a matter of pretending. The
cookies, made of a soft clay mixed with salt, water and shortening, are
the way impoverished Haitians stave off hunger pains when they can't
afford real food. It's a story that almost beggars belief.
Haiti is undoubtedly the poorest country in the Western Hemisphere.
Unlike many third world countries that have at least held their own,
Haiti's per capita GDP is far smaller than it was 30 years ago. Yet, the
country of eight million is home to a tiny elite, a few thousand
families that are tremendously wealthy, and control the Haitian economy.
This elite shops in Miami, sends its children to Europe to be educated,
and lives in a world completely unlike the 80 percent of Haitians who
live in grinding poverty.
Haiti's poverty is no accident however. It is partly due to years of
military dictatorships that were supported by the U.S., and partly due
to "structural adjustments" that the World Bank forced upon the country
as a precondition to receiving aid. The Bank's economic plan for Haiti
included privatizing key infrastructure and entrusting the delivery of
education, health, family planning, and water supply and sanitation to
private corporations. This was supposed to stimulate the Haitian economy
and bring investment into the country. Never mind that developed
countries generally wouldn't dream of turning these services over to
for-profit enterprises.
As part of this structural change, Haiti opened its border to imports of
food. The resulting flood of cheap food drove local farmers out of
business and reduced local food production. Once a rice exporter, Haiti
now relies on imports for over 80 percent of rice consumption. With food
prices rising around the world this year, imported food is no longer so
cheap. The $2 a day earned by someone lucky enough to have a job in
Haiti will buy only a couple cups of rice.
Canadian farmers are well aware of the benefits for us of trade
agreements that lower tariff barriers. We have spent years watching the
world trade talks, with their improbable promise of prosperity for all,
flounder over this issue. What we don't like to think about are the
effects trade liberalization might have on farmers in other countries.
The example of Haiti, the most "open" country in the region, is far from
unusual. With our superior technology and government subsidies, rich
countries can often insert their farm production into countries that
can't possibly compete. The result for the poor country's food
sovereignty and agriculture sector can be devastating.
Farmers in Canada have been an unhappy lot for decades. Current grain
prices portend potential for a change to their circumstances, but some
of the current upturn in prices is being bought at the expense of
farmers elsewhere. We should remember that when our politicians push
freer trade as the answer to our problems.
(c) Paul Beingessner
When I was a kid, my two older sisters were experts at making mud pies.
In fact, their expertise went far beyond the lowly mud pie. They made
mud cookies, mud cakes, mud vegetables and even mud mashed potatoes.
After careful shaping and drying in the sun, they looked good enough to
eat. Which we did, sort of. Part of getting into the game, and being
allowed to be there at all, was to play along with the fantasy,
pretending to nibble at the food, while exclaiming over the skill of the
cooks.
My sisters eventually went on to other things, like teaching and
nursing. But it is kind of comforting to know that, had they not been
successful at these occupations, they could have put the skills of
childhood to good use, even as adults. They could have, that is, if they
lived in Haiti. In Haiti, grown people make mud cookies. But, unlike my
younger siblings and me, eating them isn't a matter of pretending. The
cookies, made of a soft clay mixed with salt, water and shortening, are
the way impoverished Haitians stave off hunger pains when they can't
afford real food. It's a story that almost beggars belief.
Haiti is undoubtedly the poorest country in the Western Hemisphere.
Unlike many third world countries that have at least held their own,
Haiti's per capita GDP is far smaller than it was 30 years ago. Yet, the
country of eight million is home to a tiny elite, a few thousand
families that are tremendously wealthy, and control the Haitian economy.
This elite shops in Miami, sends its children to Europe to be educated,
and lives in a world completely unlike the 80 percent of Haitians who
live in grinding poverty.
Haiti's poverty is no accident however. It is partly due to years of
military dictatorships that were supported by the U.S., and partly due
to "structural adjustments" that the World Bank forced upon the country
as a precondition to receiving aid. The Bank's economic plan for Haiti
included privatizing key infrastructure and entrusting the delivery of
education, health, family planning, and water supply and sanitation to
private corporations. This was supposed to stimulate the Haitian economy
and bring investment into the country. Never mind that developed
countries generally wouldn't dream of turning these services over to
for-profit enterprises.
As part of this structural change, Haiti opened its border to imports of
food. The resulting flood of cheap food drove local farmers out of
business and reduced local food production. Once a rice exporter, Haiti
now relies on imports for over 80 percent of rice consumption. With food
prices rising around the world this year, imported food is no longer so
cheap. The $2 a day earned by someone lucky enough to have a job in
Haiti will buy only a couple cups of rice.
Canadian farmers are well aware of the benefits for us of trade
agreements that lower tariff barriers. We have spent years watching the
world trade talks, with their improbable promise of prosperity for all,
flounder over this issue. What we don't like to think about are the
effects trade liberalization might have on farmers in other countries.
The example of Haiti, the most "open" country in the region, is far from
unusual. With our superior technology and government subsidies, rich
countries can often insert their farm production into countries that
can't possibly compete. The result for the poor country's food
sovereignty and agriculture sector can be devastating.
Farmers in Canada have been an unhappy lot for decades. Current grain
prices portend potential for a change to their circumstances, but some
of the current upturn in prices is being bought at the expense of
farmers elsewhere. We should remember that when our politicians push
freer trade as the answer to our problems.
(c) Paul Beingessner
Viterra Takes a Page from Monsanto
Column # 669 12/05/08
While I don't expect to get dragged through the court system anytime
soon, I did get an inkling last week of how Percy Schmeiser must have
felt when he got that first letter from Monsanto. Mine came in the form
of a letter from Viterra, that amalgam of the once-farmer-owned prairie
grain companies. It began politely enough, thanking me for my business,
but soon turned ugly. Viterra, it seems, is about to become the Monsanto
of durum.
Monsanto, of course, is famous for suing farmers it believes have
infringed on its patent over the Roundup Ready gene. Percy Schmeiser is
likely the best known farmer to reap Monsanto's wrath, at least in
Canada, but he if far from the only one. Monsanto has hounded thousands
of farmers who it claims have grown Roundup Ready varieties of several
crops without paying the royalty the company demands. Some have ended up
in jail, many in financial ruin. Few had the nerve to defend themselves
to the extent that Percy did.
While Viterra doesn't own any genes related to durum, it does have
control over a couple of varieties - Navigator and Commander. Viterra
controls the production, sale and handling of these varieties. If you
want to grow them, you have to buy registered seed each year from
Viterra. You have to sell all your production to Viterra. And you have
to buy crop inputs, usually a certain dollar amount from Viterra. If
your crop is ruined by weather, you have to account to Viterra for how
you have disposed of the production.
Viterra, it appears, believes that farmers are not following the rules
with its durum varieties. The letter was to remind me of my "contractual
obligations under these Identity Preserved (IP) production contracts."
While Viterra is confident most farmers are following the terms of these
contracts, "regrettably, some are not". Then comes the threat, "Viterra
is considering all remedies, including legal action, to enforce these
rights and protect our IP programs."
Viterra, according to one source in the grain industry, is convinced a
great deal of Navigator durum is being grown outside its contracts, and
delivered to elevators as common durum. It is determined to get this
breach of its rules under control.
While the letter from Viterra made me feel real special, I suspect an
awful lot of farmers have received the same. Personally, I'm not sure
why I was on Viterra's list, since I haven't done any business of any
kind with the company for about a decade. Nor have I ever grown
Navigator or Commander durum.
So why do people grow these varieties, despite the downside of having to
buy new seed each year and being unable to access competitive buyers for
their production? Perhaps the biggest incentive is the guarantee that
the CWB will take all the Navigator that is produced under contract each
year. Navigator has one feature that is relatively unique among durums
at this time. It has a brighter yellow pigment in the seed and hence
produces brighter yellow pasta. There is a niche market for a small
amount of this durum, and Viterra limits production to this amount by
limiting the contracts it lets out.
Commander durum has less to commend it. Yields are fairly high relative
to other varieties, and like Navigator, Commander has stronger gluten
than other durums. However, Commander has the very undesirable habit of
accumulating cadmium in its seed. Cadmium is a toxic heavy metal that
has become a source of concern to consumers of durum. The CWB limits
contracts for Commander in certain parts of the prairies where cadmium
accumulation is especially problematic. Like Navigator, Commander also
limits what growers can do with their production. Many farmers don't see
the closed loop system as a desirable thing. There is some evidence to
indicate that farmers whose marketing options are restricted by
contracts receive lower trucking premiums and poorer grades when they
sell their grain.
Fortunately, those wanting to grow stronger gluten durum have an
alternative. Strongfield durum, developed by the same Agriculture Canada
scientists who developed Navigator and Commander, is a strong gluten
durum with superior milling qualities. It has better yields that
Navigator, and, with it being licensed to SeCan, farmers are able to
keep their own seed for replanting, and are not nearly so restricted in
marketing options.
The CWB has been anxious to get Strongfield into greater production (it
occupied 43% durum acres in Saskatchewan last year) in order to improve
the quality of the durum it sells. The CWB has also generally required
companies that want contracts for Strongfield to allow farmers to
replant their own seed.
Viterra's aggressive measures to protect its control over Navigator will
not sit well with many farmers. No one likes to think that the future of
grain production lies in closed loop contracts that limit a farmer's
access to both markets and farm supplies. The huge growth in Strongfield
acres indicates just that. Rumour has it that Viterra hasn't limited its
threats to farmers. Other grain companies have been told that they might
be held liable if they buy Navigator durum. At least one company
responded by saying that if Viterra allowed Navigator to contaminate its
elevators, Viterra would be held responsible.
(c) Paul Beingessner
While I don't expect to get dragged through the court system anytime
soon, I did get an inkling last week of how Percy Schmeiser must have
felt when he got that first letter from Monsanto. Mine came in the form
of a letter from Viterra, that amalgam of the once-farmer-owned prairie
grain companies. It began politely enough, thanking me for my business,
but soon turned ugly. Viterra, it seems, is about to become the Monsanto
of durum.
Monsanto, of course, is famous for suing farmers it believes have
infringed on its patent over the Roundup Ready gene. Percy Schmeiser is
likely the best known farmer to reap Monsanto's wrath, at least in
Canada, but he if far from the only one. Monsanto has hounded thousands
of farmers who it claims have grown Roundup Ready varieties of several
crops without paying the royalty the company demands. Some have ended up
in jail, many in financial ruin. Few had the nerve to defend themselves
to the extent that Percy did.
While Viterra doesn't own any genes related to durum, it does have
control over a couple of varieties - Navigator and Commander. Viterra
controls the production, sale and handling of these varieties. If you
want to grow them, you have to buy registered seed each year from
Viterra. You have to sell all your production to Viterra. And you have
to buy crop inputs, usually a certain dollar amount from Viterra. If
your crop is ruined by weather, you have to account to Viterra for how
you have disposed of the production.
Viterra, it appears, believes that farmers are not following the rules
with its durum varieties. The letter was to remind me of my "contractual
obligations under these Identity Preserved (IP) production contracts."
While Viterra is confident most farmers are following the terms of these
contracts, "regrettably, some are not". Then comes the threat, "Viterra
is considering all remedies, including legal action, to enforce these
rights and protect our IP programs."
Viterra, according to one source in the grain industry, is convinced a
great deal of Navigator durum is being grown outside its contracts, and
delivered to elevators as common durum. It is determined to get this
breach of its rules under control.
While the letter from Viterra made me feel real special, I suspect an
awful lot of farmers have received the same. Personally, I'm not sure
why I was on Viterra's list, since I haven't done any business of any
kind with the company for about a decade. Nor have I ever grown
Navigator or Commander durum.
So why do people grow these varieties, despite the downside of having to
buy new seed each year and being unable to access competitive buyers for
their production? Perhaps the biggest incentive is the guarantee that
the CWB will take all the Navigator that is produced under contract each
year. Navigator has one feature that is relatively unique among durums
at this time. It has a brighter yellow pigment in the seed and hence
produces brighter yellow pasta. There is a niche market for a small
amount of this durum, and Viterra limits production to this amount by
limiting the contracts it lets out.
Commander durum has less to commend it. Yields are fairly high relative
to other varieties, and like Navigator, Commander has stronger gluten
than other durums. However, Commander has the very undesirable habit of
accumulating cadmium in its seed. Cadmium is a toxic heavy metal that
has become a source of concern to consumers of durum. The CWB limits
contracts for Commander in certain parts of the prairies where cadmium
accumulation is especially problematic. Like Navigator, Commander also
limits what growers can do with their production. Many farmers don't see
the closed loop system as a desirable thing. There is some evidence to
indicate that farmers whose marketing options are restricted by
contracts receive lower trucking premiums and poorer grades when they
sell their grain.
Fortunately, those wanting to grow stronger gluten durum have an
alternative. Strongfield durum, developed by the same Agriculture Canada
scientists who developed Navigator and Commander, is a strong gluten
durum with superior milling qualities. It has better yields that
Navigator, and, with it being licensed to SeCan, farmers are able to
keep their own seed for replanting, and are not nearly so restricted in
marketing options.
The CWB has been anxious to get Strongfield into greater production (it
occupied 43% durum acres in Saskatchewan last year) in order to improve
the quality of the durum it sells. The CWB has also generally required
companies that want contracts for Strongfield to allow farmers to
replant their own seed.
Viterra's aggressive measures to protect its control over Navigator will
not sit well with many farmers. No one likes to think that the future of
grain production lies in closed loop contracts that limit a farmer's
access to both markets and farm supplies. The huge growth in Strongfield
acres indicates just that. Rumour has it that Viterra hasn't limited its
threats to farmers. Other grain companies have been told that they might
be held liable if they buy Navigator durum. At least one company
responded by saying that if Viterra allowed Navigator to contaminate its
elevators, Viterra would be held responsible.
(c) Paul Beingessner
Saskatchewan RMs Take a Beating From Transportation
Column # 668
Although it may seem as if the prairie branch line rail network has been
completely skeletonized by the major railways, the job is not yet truly
complete. CP still has 911 kilometres of track on its Three-Year Plan
for abandonment in the prairie provinces, and CN has 613 kilometres. Nor
does this rule out further abandonments by the major carriers. At least
one major railway has stated that there are still too many grain
elevator points and by extension, too many rail lines.
When the railways seek to abandon track, there is a formal process laid
out in the Canada Transportation Act. At one time, prior to the passage
of this act, the Transportation Agency had to take public interest into
account in deciding whether or not to allow an abandonment. That idea
was vanquished some time ago. The railways merely have to follow a
prescribed procedure, and cannot be prevented from abandoning track, no
matter what the government may think. It isn't exactly what the
country's founding fathers had in mind when they granted the original
railway charters.
The only defence of the public interest left in federal rail legislation
is the stipulation that a railway must offer a line for sale to various
levels of government before it can rip it out of the ground. Of course,
this wouldn't mean much if the railway could charge whatever price it
wanted. The rules say that the price will be the net salvage value of
the track - the amount of money the railway would get by selling the
materials less the cost of tearing out those materials. If the parties
can't agree on that amount, the Canadian Transportation Agency (CTA)
will decide.
Until recently, the Agency has been fairly reasonable in these
determinations. Neither party usually got what it wanted completely. But
two recent net salvage value determinations on Saskatchewan branch lines
seem to indicate the tide has turned in the railways' favour. The new
Members of the Agency, freshly appointed by the Harper government, gave
the railways a huge and questionable bonus in these recent rulings.
The bonus revolves around a section of the Canada Transportation Act
that requires the railways to pay to municipal governments, on
abandonment, an amount equal to $30,000 per mile, for each mile of rail
line that runs through the municipality. This provision only applies to
grain dependent branch lines in western Canada. The rationale for this
was to compensate municipalities for road costs they would incur when
rail service ended.
It would seem this condition imposes quite an obligation on the
railways. Prior to the recent run-up in commodity markets, including
steel, a railway would likely have ended up in a negative position when
it abandoned track. This makes it all the more odd that this provision
in the act was, if memory serves me correctly, first proposed by CP.
The fact is, CP was quite clever in suggesting it. Municipalities have
been fighting with each other ever since the act came into effect. While
one municipality may want to buy the track to operate a short line,
another will see only the short-term prospect of hundreds of thousands
of dollars of revenue.
Given this provision, it would seem logical that the net value of the
track would include consideration for the $30,000 a mile. It the railway
abandons the track, it can sell the materials but must take the payment
to municipalities out of that money. There is no way around this.
Salvaging the track includes a compensation cost to the municipalities.
At least that is what seems logical. Unfortunately for farmers on the
Radville and Bromhead branch lines, Harper's appointees to the Agency
don't appear to see it that way. If CP sells to the RM's in question, it
gets to have its cake and eat it too. The RMs pay the full price and
lose the benefit of $30,000 per mile. And if they want to start a short
line, they are still at the mercy of CP as to all and any conditions the
line would run under.
To top it off, the Agency also ruled against the RMs where their
reclamation bylaws were concerned. Having seen the condition of many
abandoned branch lines, some municipalities enacted bylaws requiring the
railways to clean up abandoned railway sites. The RMs in this case felt
the amount of such a clean up should be deducted from the salvage value.
Again the Agency ruled in CP's favour on this.
The resulting purchase prices for these branch lines are exceedingly
high. It is possible that the Agency's rulings might fit the letter of
the law as laid out in the act, but they violate any sense of natural
justice.
There is one last recourse in this case. The rulings can be appealed to
the federal court of Canada. A successful appeal would have implications
far beyond the two branch lines in question, and extend to the other
1300 kilometres on the railways' plans for discontinuance.
Given the cost of such an appeal, and the wide implications, the
government of Saskatchewan should consider funding it. For a province
swimming in oil money, it would be a small amount. For some beleaguered
RMs, it would be a godsend.
(c) Paul Beingessner
Although it may seem as if the prairie branch line rail network has been
completely skeletonized by the major railways, the job is not yet truly
complete. CP still has 911 kilometres of track on its Three-Year Plan
for abandonment in the prairie provinces, and CN has 613 kilometres. Nor
does this rule out further abandonments by the major carriers. At least
one major railway has stated that there are still too many grain
elevator points and by extension, too many rail lines.
When the railways seek to abandon track, there is a formal process laid
out in the Canada Transportation Act. At one time, prior to the passage
of this act, the Transportation Agency had to take public interest into
account in deciding whether or not to allow an abandonment. That idea
was vanquished some time ago. The railways merely have to follow a
prescribed procedure, and cannot be prevented from abandoning track, no
matter what the government may think. It isn't exactly what the
country's founding fathers had in mind when they granted the original
railway charters.
The only defence of the public interest left in federal rail legislation
is the stipulation that a railway must offer a line for sale to various
levels of government before it can rip it out of the ground. Of course,
this wouldn't mean much if the railway could charge whatever price it
wanted. The rules say that the price will be the net salvage value of
the track - the amount of money the railway would get by selling the
materials less the cost of tearing out those materials. If the parties
can't agree on that amount, the Canadian Transportation Agency (CTA)
will decide.
Until recently, the Agency has been fairly reasonable in these
determinations. Neither party usually got what it wanted completely. But
two recent net salvage value determinations on Saskatchewan branch lines
seem to indicate the tide has turned in the railways' favour. The new
Members of the Agency, freshly appointed by the Harper government, gave
the railways a huge and questionable bonus in these recent rulings.
The bonus revolves around a section of the Canada Transportation Act
that requires the railways to pay to municipal governments, on
abandonment, an amount equal to $30,000 per mile, for each mile of rail
line that runs through the municipality. This provision only applies to
grain dependent branch lines in western Canada. The rationale for this
was to compensate municipalities for road costs they would incur when
rail service ended.
It would seem this condition imposes quite an obligation on the
railways. Prior to the recent run-up in commodity markets, including
steel, a railway would likely have ended up in a negative position when
it abandoned track. This makes it all the more odd that this provision
in the act was, if memory serves me correctly, first proposed by CP.
The fact is, CP was quite clever in suggesting it. Municipalities have
been fighting with each other ever since the act came into effect. While
one municipality may want to buy the track to operate a short line,
another will see only the short-term prospect of hundreds of thousands
of dollars of revenue.
Given this provision, it would seem logical that the net value of the
track would include consideration for the $30,000 a mile. It the railway
abandons the track, it can sell the materials but must take the payment
to municipalities out of that money. There is no way around this.
Salvaging the track includes a compensation cost to the municipalities.
At least that is what seems logical. Unfortunately for farmers on the
Radville and Bromhead branch lines, Harper's appointees to the Agency
don't appear to see it that way. If CP sells to the RM's in question, it
gets to have its cake and eat it too. The RMs pay the full price and
lose the benefit of $30,000 per mile. And if they want to start a short
line, they are still at the mercy of CP as to all and any conditions the
line would run under.
To top it off, the Agency also ruled against the RMs where their
reclamation bylaws were concerned. Having seen the condition of many
abandoned branch lines, some municipalities enacted bylaws requiring the
railways to clean up abandoned railway sites. The RMs in this case felt
the amount of such a clean up should be deducted from the salvage value.
Again the Agency ruled in CP's favour on this.
The resulting purchase prices for these branch lines are exceedingly
high. It is possible that the Agency's rulings might fit the letter of
the law as laid out in the act, but they violate any sense of natural
justice.
There is one last recourse in this case. The rulings can be appealed to
the federal court of Canada. A successful appeal would have implications
far beyond the two branch lines in question, and extend to the other
1300 kilometres on the railways' plans for discontinuance.
Given the cost of such an appeal, and the wide implications, the
government of Saskatchewan should consider funding it. For a province
swimming in oil money, it would be a small amount. For some beleaguered
RMs, it would be a godsend.
(c) Paul Beingessner
Tuesday, April 22, 2008
Ask Me No Questions I'll Tell You No Lies 21/04/08
Sorry for the delay here. Freezing rain took out the power for 12 hours.
Chilled calf to deal with. I have a litany of excuses....
Column # 667 Ask Me No Questions I'll Tell You No Lies 21/04/08
Few things are as frustrating to parents of teenagers as their
children's communication skills. Or lack thereof. Having participated in
the rearing of 5 teenagers, I've been on the receiving end of my share
of monosyllabic grunts.
"Have you done your homework?"
"Uhnnn."
Even worse for parental blood pressure is the answer that never happens.
"When are you going to get off your duff and do your chores?" Silence.
The only discernible response is a slightly more frantic blur of finger
and thumb remorselessly pushing buttons, as eyes remain glued to the
television.
Of course I would never admit to the near uncontrollable urge to slap
someone up the side of the head. (Can the welfare still come and take
your kids when they're grown up and gone?)
There are many similarities between politicians and teenagers, most of
them centering on fabrication and a ceaseless focus on whether the
outcome of any situation will be good for me personally. Politicians and
kids share another similarity. It's the ability to completely ignore a
legitimate question, as if the questioner were one of those irritating
800 area code calls that we don't answer when they appear on our phone.
How many newspaper articles end with "the government has made no
response to the request"? How many radio interviews conclude with "no
one was available for comment"? For someone with a valid and important
question, it can be infuriating and disheartening.
Take, for example, the plight of hog producers in Canada. Repeated
requests for aid early this year were met with silence. It looked as if
governments had decided to take the course of letting the chips fall
where they would as far as hogs were concerned. Saskatchewan Minister of
Agriculture, after announcing a loan program, (gee, more debt, thanks a
lot) declared that his government had done all it could. The federal
government finally decided its assistance would be to kill as many sows
and boars are producers were willing to part with.
Right now, OmniTrax, the American company operating the rail line to
Churchill, must be feeling a similar frustration. OmniTrax is watching
the federal government preside over the chopping up of the fleet of
aluminum hopper cars. While the cars are pretty much obsolete for
hauling grain on Canada's mainline railways, due to limited capacity,
they might fit into the local hauling of products on the Bay line.
However, the dismembering continues and the federal government appears
to be ignoring OmniTrax's request for dialogue on the cars.
Beef producers know their own frustration with government silence.
Restrictions on the disposal of Specified Risk Materials add as much as
$80 to cost of slaughter and processing for a beef animal in Canada.
These are costs American packers do not bear, since their regulations
are much less strict. This cost puts Canadian packers at risk, since the
market in which they compete is largely continental. Continued requests
for the government to deal with a problem that is beyond industry's
ability to control have been met with little acknowledgement.
Government communications, of course, are not about facts or truth. They
are about spin. Unfortunately, this appears to be true of most
governments most of the time. If government thinks the public wouldn't
like the answer to a question, better to remain silent. One place this
may not work is in the House of Commons. However, when confronted with a
question that you can't avoid, politicians can still take another
course. Don't answer the question asked, answer some other question.
This was the situation facing Liberal MP Wayne Easter on April 8. Easter
asked Transport Minister Lawrence Cannon if the government intended to
conduct a full review of railway costs. Cannon's response must have left
Easter scratching his head. It went like this, "One of the first
initiatives we took was to stop the sale of the hopper cars (to
farmers). It was an excellent decision because it was something the
marketplace wanted. ...it was a way of diminishing and reducing costs to
the farmer."
It makes me think even politicians in the House of Commons must
occasionally want to slap someone up the side of the head.
(c) Paul Beingessner
Chilled calf to deal with. I have a litany of excuses....
Column # 667 Ask Me No Questions I'll Tell You No Lies 21/04/08
Few things are as frustrating to parents of teenagers as their
children's communication skills. Or lack thereof. Having participated in
the rearing of 5 teenagers, I've been on the receiving end of my share
of monosyllabic grunts.
"Have you done your homework?"
"Uhnnn."
Even worse for parental blood pressure is the answer that never happens.
"When are you going to get off your duff and do your chores?" Silence.
The only discernible response is a slightly more frantic blur of finger
and thumb remorselessly pushing buttons, as eyes remain glued to the
television.
Of course I would never admit to the near uncontrollable urge to slap
someone up the side of the head. (Can the welfare still come and take
your kids when they're grown up and gone?)
There are many similarities between politicians and teenagers, most of
them centering on fabrication and a ceaseless focus on whether the
outcome of any situation will be good for me personally. Politicians and
kids share another similarity. It's the ability to completely ignore a
legitimate question, as if the questioner were one of those irritating
800 area code calls that we don't answer when they appear on our phone.
How many newspaper articles end with "the government has made no
response to the request"? How many radio interviews conclude with "no
one was available for comment"? For someone with a valid and important
question, it can be infuriating and disheartening.
Take, for example, the plight of hog producers in Canada. Repeated
requests for aid early this year were met with silence. It looked as if
governments had decided to take the course of letting the chips fall
where they would as far as hogs were concerned. Saskatchewan Minister of
Agriculture, after announcing a loan program, (gee, more debt, thanks a
lot) declared that his government had done all it could. The federal
government finally decided its assistance would be to kill as many sows
and boars are producers were willing to part with.
Right now, OmniTrax, the American company operating the rail line to
Churchill, must be feeling a similar frustration. OmniTrax is watching
the federal government preside over the chopping up of the fleet of
aluminum hopper cars. While the cars are pretty much obsolete for
hauling grain on Canada's mainline railways, due to limited capacity,
they might fit into the local hauling of products on the Bay line.
However, the dismembering continues and the federal government appears
to be ignoring OmniTrax's request for dialogue on the cars.
Beef producers know their own frustration with government silence.
Restrictions on the disposal of Specified Risk Materials add as much as
$80 to cost of slaughter and processing for a beef animal in Canada.
These are costs American packers do not bear, since their regulations
are much less strict. This cost puts Canadian packers at risk, since the
market in which they compete is largely continental. Continued requests
for the government to deal with a problem that is beyond industry's
ability to control have been met with little acknowledgement.
Government communications, of course, are not about facts or truth. They
are about spin. Unfortunately, this appears to be true of most
governments most of the time. If government thinks the public wouldn't
like the answer to a question, better to remain silent. One place this
may not work is in the House of Commons. However, when confronted with a
question that you can't avoid, politicians can still take another
course. Don't answer the question asked, answer some other question.
This was the situation facing Liberal MP Wayne Easter on April 8. Easter
asked Transport Minister Lawrence Cannon if the government intended to
conduct a full review of railway costs. Cannon's response must have left
Easter scratching his head. It went like this, "One of the first
initiatives we took was to stop the sale of the hopper cars (to
farmers). It was an excellent decision because it was something the
marketplace wanted. ...it was a way of diminishing and reducing costs to
the farmer."
It makes me think even politicians in the House of Commons must
occasionally want to slap someone up the side of the head.
(c) Paul Beingessner
Piglet Kill Proposed to Solve Hog Woes 14/04/08
Column # 666 Piglet Kill Proposed to Solve Hog Woes 14/04/08
In virtually every farming enterprise, farms are getting larger. One
factor that has driven this is the ever-declining value of the
commodities farms produce. In constant dollars, the value of farm
products, whether grain, livestock or Christmas tree has not kept up
with every other cost farmers face. Farmers have survived by producing
more of those products per farm. So farms get bigger and rural
communities smaller.
If production were simply a matter of management, good farmers would
survive by getting larger. The less productive would fall by the
wayside. But it isn't that simple. A major reason is the incredible
unpredictability of both weather and prices. If you're losing money due
to low prices or poor production, being big is likely a greater problem
than being small.
The other problem with bigness is that everyone is on the same
bandwagon. The result is the consolidation of grain companies, chemical
and seed companies, machinery manufacturers and even input retailers.
Even the biggest farmer is no match for a Monsanto, Cargill or CP.
Nowhere can the problems of bigness be more clearly seen than in the hog
industry. At some point in the last century, governments and policy
makers became convinced there was an unlimited market in the world for
pigs. The rational was that as poorer countries developed, meat
consumption would rise, and since hogs and chickens are cheaper to raise
than cattle, they would be the ones in greatest demand. Policy makers
began to push hog production. Provincial governments all had their own
units within their departments of agriculture dedicated largely to
increasing the number of hogs produced in the province. Pigs would eat
the cheap feed grains. Pigs, which can breed like rabbits, could build
populations rapidly. Canadian pigs would be travelling the world. Raise
enough pigs and the processing facilities would come.
There were several problems with the whole scenario. Large hog barns
could indeed produce hogs cheaply. So cheaply, in fact, that soon small
producers were unable to cope with the ever-falling prices. They did
what hog producers have always done when markets fell. They went out of
pigs. The large ones left didn't respond to market signals in the same
way. They couldn't afford to shut down or limit production, thus
ensuring perpetually low prices. (Truth be told, low hog prices have
hurt the beef industry as well, as hogs compete in the supermarket with
beef and limit its price.)
As for Canadian pigs travelling the world, it turned out most of them
only made it to the U.S. As in the beef industry, Canada became fixated
on selling our pigs to a country swimming in pigs itself. That we were
able to do so was largely because of our low dollar, not some mythical
notion of western Canada as the "lowest cost producer".
If current and past hog prices weren't enough to make you weep, the
impending closure of the American border to hogs due to Country of
Origin Labelling (COOL) should have hog producers everywhere sobbing.
Labelling hogs as products of somewhere other than the U.S. is expected
to lower their value, so American slaughter plants have also said they
will not slaughter Canadian hogs under COOL. Just the fact that COOL
appears to be coming this fall has whacked Manitoba's isowean producers
on the snout. Isoweans are early-weaned piglets, many of which are
finished in the U.S. Those for sale now might not finish before COOL is
implemented, so some American finishers have broken contracts to buy
Manitoba piglets. Prices for isoweans have dropped as much as 90
percent.
Canada now has a program to pay hog producers to kill sows and boars and
stop producing pigs. Manitoba producers are calling for a similar
program to kill piglets, saying a 4 percent reduction in supply would
help to increase prices.
The entire situation is both sad and revolting, especially the waste of
good food and the destruction of baby animals. The heyday of this latest
surge in the hog industry lasted scarcely more than a decade for many
producers. Some of the earliest barns were closing their doors due to
bankruptcy as the last barns were being built. Whatever the outcome,
there will be a major correction in hog numbers, especially in western
Canada.
No one should be surprised. The market for pigs in Manitoba and
Saskatchewan is for about 300,000 hogs per year. We are producing five
million, and trying to export most of the surplus to the U.S., a country
that is awash in hogs itself, and remarkably protectionist. It is as
absurd as Canadian farmers who think that without the CWB, we could pour
our grain into the American's premium priced domestic market.
The ultimate irony is that while the industry is near collapse,
Manitoba's hog producers are up in arms because the provincial
government won't allow any new hogs barns to be built due to
environmental concerns.
So, let's tally it up.
At one time we had a hog industry with thousands of small players who
sold to a variety of packing plants. These farmers responded to market
signals and were able to move in and out of the industry because their
capital investment was often small and they were diversified. Hog prices
were low, so focus on the grain side. Hogs rise, re-open the barn.
Now we have government subsidies to kill pigs large and small and
dispose of them. Packing plants closing in western Canada while the hog
supply grows. Small producers all driven out of the business. A bunch of
much fancier empty barns than the last time this happened. And
government agencies that still have a mandate, I'll bet you anything, to
expand the hog industry in western Canada.
They say pigs are the smartest animal in the barnyard. I'm beginning to
think they could well be smarter than a lot of humans.
In virtually every farming enterprise, farms are getting larger. One
factor that has driven this is the ever-declining value of the
commodities farms produce. In constant dollars, the value of farm
products, whether grain, livestock or Christmas tree has not kept up
with every other cost farmers face. Farmers have survived by producing
more of those products per farm. So farms get bigger and rural
communities smaller.
If production were simply a matter of management, good farmers would
survive by getting larger. The less productive would fall by the
wayside. But it isn't that simple. A major reason is the incredible
unpredictability of both weather and prices. If you're losing money due
to low prices or poor production, being big is likely a greater problem
than being small.
The other problem with bigness is that everyone is on the same
bandwagon. The result is the consolidation of grain companies, chemical
and seed companies, machinery manufacturers and even input retailers.
Even the biggest farmer is no match for a Monsanto, Cargill or CP.
Nowhere can the problems of bigness be more clearly seen than in the hog
industry. At some point in the last century, governments and policy
makers became convinced there was an unlimited market in the world for
pigs. The rational was that as poorer countries developed, meat
consumption would rise, and since hogs and chickens are cheaper to raise
than cattle, they would be the ones in greatest demand. Policy makers
began to push hog production. Provincial governments all had their own
units within their departments of agriculture dedicated largely to
increasing the number of hogs produced in the province. Pigs would eat
the cheap feed grains. Pigs, which can breed like rabbits, could build
populations rapidly. Canadian pigs would be travelling the world. Raise
enough pigs and the processing facilities would come.
There were several problems with the whole scenario. Large hog barns
could indeed produce hogs cheaply. So cheaply, in fact, that soon small
producers were unable to cope with the ever-falling prices. They did
what hog producers have always done when markets fell. They went out of
pigs. The large ones left didn't respond to market signals in the same
way. They couldn't afford to shut down or limit production, thus
ensuring perpetually low prices. (Truth be told, low hog prices have
hurt the beef industry as well, as hogs compete in the supermarket with
beef and limit its price.)
As for Canadian pigs travelling the world, it turned out most of them
only made it to the U.S. As in the beef industry, Canada became fixated
on selling our pigs to a country swimming in pigs itself. That we were
able to do so was largely because of our low dollar, not some mythical
notion of western Canada as the "lowest cost producer".
If current and past hog prices weren't enough to make you weep, the
impending closure of the American border to hogs due to Country of
Origin Labelling (COOL) should have hog producers everywhere sobbing.
Labelling hogs as products of somewhere other than the U.S. is expected
to lower their value, so American slaughter plants have also said they
will not slaughter Canadian hogs under COOL. Just the fact that COOL
appears to be coming this fall has whacked Manitoba's isowean producers
on the snout. Isoweans are early-weaned piglets, many of which are
finished in the U.S. Those for sale now might not finish before COOL is
implemented, so some American finishers have broken contracts to buy
Manitoba piglets. Prices for isoweans have dropped as much as 90
percent.
Canada now has a program to pay hog producers to kill sows and boars and
stop producing pigs. Manitoba producers are calling for a similar
program to kill piglets, saying a 4 percent reduction in supply would
help to increase prices.
The entire situation is both sad and revolting, especially the waste of
good food and the destruction of baby animals. The heyday of this latest
surge in the hog industry lasted scarcely more than a decade for many
producers. Some of the earliest barns were closing their doors due to
bankruptcy as the last barns were being built. Whatever the outcome,
there will be a major correction in hog numbers, especially in western
Canada.
No one should be surprised. The market for pigs in Manitoba and
Saskatchewan is for about 300,000 hogs per year. We are producing five
million, and trying to export most of the surplus to the U.S., a country
that is awash in hogs itself, and remarkably protectionist. It is as
absurd as Canadian farmers who think that without the CWB, we could pour
our grain into the American's premium priced domestic market.
The ultimate irony is that while the industry is near collapse,
Manitoba's hog producers are up in arms because the provincial
government won't allow any new hogs barns to be built due to
environmental concerns.
So, let's tally it up.
At one time we had a hog industry with thousands of small players who
sold to a variety of packing plants. These farmers responded to market
signals and were able to move in and out of the industry because their
capital investment was often small and they were diversified. Hog prices
were low, so focus on the grain side. Hogs rise, re-open the barn.
Now we have government subsidies to kill pigs large and small and
dispose of them. Packing plants closing in western Canada while the hog
supply grows. Small producers all driven out of the business. A bunch of
much fancier empty barns than the last time this happened. And
government agencies that still have a mandate, I'll bet you anything, to
expand the hog industry in western Canada.
They say pigs are the smartest animal in the barnyard. I'm beginning to
think they could well be smarter than a lot of humans.
Life Can Be a Bummer 07/04/08
Column # 665 Life Can Be a Bummer 07/04/08
The subject matter for this story might seem a bit indelicate, but here
goes. We had a lamb born on the farm this year without a bum. Or, to put
it in language that might make it past the censor, it lacked an anal
opening.
As you can image, this is not good news for the lamb. Sheep are prone to
any number of deformities - cleft palates, missing eyes, spinal
deformations, and yes, absent orifices. The usual remedy to such
problems is a swift departure to lamb heaven at the hands of the
shepherd.
Our lamb was luckier, due to my reluctance to whack tiny bleating
creatures on the head, especially when they appear lively and happy,
with the innocence only a lamb can project. So when I noticed the half
day-old lamb lying on its side and straining in obvious discomfort, and
an inspection quickly revealed not even a trace of a rectal aperture, I
called my vet to seek counsel.
His outlook was gloomy. If the defect was severe enough, it seemed the
lamb might not even have a properly developed intestine. If so, it would
be dead by morning. If it were still alive, he could look at it then,
assuring me that it would be uncomfortable but not in a great deal of
pain.
At least the delay until morning would take part of the decision out of
my hands. If the lamb died, such was life. If it lived, I still had to
justify to myself the cost of the procedure, which I was pretty sure
would at least equal the value of the lamb full grown at market time.
As the lamb's luck would have it, she made it easily through the night.
I justified the decision to make the 40 kilometer trip to the vet by
hoping fervently that a small and simple, hence inexpensive incision
would right the matter.
Well, not quite. It turned out there was a quarter inch of tissue
between the lamb's smooth backside and his anal muscle. An incision
would simply grow shut. My vet's solution was to pull the anal tissue
forward and suture it to the outside. It was some pretty delicate and
nifty work. But it wasn't simple. A couple x-rays, some medication, it
all came to a bill for $140. Not much chance of making money on that
lamb. For the lamb, at least, it was a happy ending. She never looked
back and four weeks later I can't pick her out of the crowd.
It probably wasn't a real smart decision, and I likely wouldn't do it
again, despite my relatively soft heart. A livestock farmer can't afford
too many kind gestures these days if they cost money. The sad fact is
that today's livestock prices, and those of the last few years, mean
most farmers visit the vet only in extreme circumstances. The results
are sometimes not what farmers who generally love their animals would
really like.
Sheep may be an extreme example of this. There is almost nothing you can
take a single animal to the vet for that won't result in a bill greater
than the animal's value. Prolapsed uterus? We replace it ourselves, and
if we can't make it stay, we put the animal down. Impossibly large lamb
or a cervix that won't dilate? A caesarean is far too costly. Better, as
one vet advised me, to shoot the ewe and attempt to extract the lamb
alive afterwards. (It worked.)
The same applies to cattle, though there is of course more room to spend
money and still come out okay. Or, at least there was prior to the
collapse of the calf market last fall. More and more, farmers are
treating ailments that they would formerly have taken to a vet. If their
treatments fail, the cheapest alternative may be to put the animal down.
The problem is not with the rates rural veterinarians charge. They work
long hard hours and few make their fortune and retire early. The problem
is that the value of livestock has failed drastically to keep up with
the cost of living, or any other cost.
As I said earlier, no farmer wants to work outside his comfort zone with
animals. Nor does he want to put down an animal because routine
procedures are too costly to contemplate. Yet, there is no readily
discernible solution to this dilemma. Livestock prices will never move
in lock step with the cost of human labour or other inputs. The history
of modern agriculture is that prices for farm commodities have steadily
declined, relative to all other costs. Present government policies and
market trends don't appear likely to change that.
A partial solution to this sorry situation would be for governments to
financially assist rural vet clinics. If they could afford to lower
rates, farmers could afford to use them more. This would likely yield
greater returns to farmers and their communities than many of the
"value-added" schemes that garner government support. It should also
make the animal welfare folks happy. And it would keep life for lambs
like mine from being a real bummer.
The subject matter for this story might seem a bit indelicate, but here
goes. We had a lamb born on the farm this year without a bum. Or, to put
it in language that might make it past the censor, it lacked an anal
opening.
As you can image, this is not good news for the lamb. Sheep are prone to
any number of deformities - cleft palates, missing eyes, spinal
deformations, and yes, absent orifices. The usual remedy to such
problems is a swift departure to lamb heaven at the hands of the
shepherd.
Our lamb was luckier, due to my reluctance to whack tiny bleating
creatures on the head, especially when they appear lively and happy,
with the innocence only a lamb can project. So when I noticed the half
day-old lamb lying on its side and straining in obvious discomfort, and
an inspection quickly revealed not even a trace of a rectal aperture, I
called my vet to seek counsel.
His outlook was gloomy. If the defect was severe enough, it seemed the
lamb might not even have a properly developed intestine. If so, it would
be dead by morning. If it were still alive, he could look at it then,
assuring me that it would be uncomfortable but not in a great deal of
pain.
At least the delay until morning would take part of the decision out of
my hands. If the lamb died, such was life. If it lived, I still had to
justify to myself the cost of the procedure, which I was pretty sure
would at least equal the value of the lamb full grown at market time.
As the lamb's luck would have it, she made it easily through the night.
I justified the decision to make the 40 kilometer trip to the vet by
hoping fervently that a small and simple, hence inexpensive incision
would right the matter.
Well, not quite. It turned out there was a quarter inch of tissue
between the lamb's smooth backside and his anal muscle. An incision
would simply grow shut. My vet's solution was to pull the anal tissue
forward and suture it to the outside. It was some pretty delicate and
nifty work. But it wasn't simple. A couple x-rays, some medication, it
all came to a bill for $140. Not much chance of making money on that
lamb. For the lamb, at least, it was a happy ending. She never looked
back and four weeks later I can't pick her out of the crowd.
It probably wasn't a real smart decision, and I likely wouldn't do it
again, despite my relatively soft heart. A livestock farmer can't afford
too many kind gestures these days if they cost money. The sad fact is
that today's livestock prices, and those of the last few years, mean
most farmers visit the vet only in extreme circumstances. The results
are sometimes not what farmers who generally love their animals would
really like.
Sheep may be an extreme example of this. There is almost nothing you can
take a single animal to the vet for that won't result in a bill greater
than the animal's value. Prolapsed uterus? We replace it ourselves, and
if we can't make it stay, we put the animal down. Impossibly large lamb
or a cervix that won't dilate? A caesarean is far too costly. Better, as
one vet advised me, to shoot the ewe and attempt to extract the lamb
alive afterwards. (It worked.)
The same applies to cattle, though there is of course more room to spend
money and still come out okay. Or, at least there was prior to the
collapse of the calf market last fall. More and more, farmers are
treating ailments that they would formerly have taken to a vet. If their
treatments fail, the cheapest alternative may be to put the animal down.
The problem is not with the rates rural veterinarians charge. They work
long hard hours and few make their fortune and retire early. The problem
is that the value of livestock has failed drastically to keep up with
the cost of living, or any other cost.
As I said earlier, no farmer wants to work outside his comfort zone with
animals. Nor does he want to put down an animal because routine
procedures are too costly to contemplate. Yet, there is no readily
discernible solution to this dilemma. Livestock prices will never move
in lock step with the cost of human labour or other inputs. The history
of modern agriculture is that prices for farm commodities have steadily
declined, relative to all other costs. Present government policies and
market trends don't appear likely to change that.
A partial solution to this sorry situation would be for governments to
financially assist rural vet clinics. If they could afford to lower
rates, farmers could afford to use them more. This would likely yield
greater returns to farmers and their communities than many of the
"value-added" schemes that garner government support. It should also
make the animal welfare folks happy. And it would keep life for lambs
like mine from being a real bummer.
Honorary Life Membership
Well, bragging is always a bit pathetic, especially for a guy who's
passed the half-century mark, but I am going to run the risk that you my
readers will heap silent scorn on me for indulging myself. (Remember, I
said silent.)
Here goes.
At the annual meeting of the Saskatchewan Institute of Agrologists last
week I was awarded an honorary life membership. The Institute usually
awards a couple of these per year. This year, I was the only one. I am
pretty flattered by this, despite the fact that I think there was a
collosal mistake and there must be some other Paul Beingessner around
who deserved the honor. (Actually, there is another Paul Beingessner,
but he lives in Ontario so I suspect he is not the intended one.)
I know little about the SIA, except that a lot of the folks I know who
work in the agriculture field are agrologists, as they have to be by the
law that set up the SIA, but a lot of the folks on the list of honorary
life members are folks I know, or knew, and have a lot of respect for.
Anyway, if you want to see the list, google the SIA. It's a simple
website.
Thanks to Richard Marleau, who I met for the first time at the banquet,
but who is on my email list. for putting my name forward. Richard seems
like a very nice man, but apparently he is living proof of P T Barnum's
dictum that you can fool some of the people all of the time.
Regards
Paul Beingessner
passed the half-century mark, but I am going to run the risk that you my
readers will heap silent scorn on me for indulging myself. (Remember, I
said silent.)
Here goes.
At the annual meeting of the Saskatchewan Institute of Agrologists last
week I was awarded an honorary life membership. The Institute usually
awards a couple of these per year. This year, I was the only one. I am
pretty flattered by this, despite the fact that I think there was a
collosal mistake and there must be some other Paul Beingessner around
who deserved the honor. (Actually, there is another Paul Beingessner,
but he lives in Ontario so I suspect he is not the intended one.)
I know little about the SIA, except that a lot of the folks I know who
work in the agriculture field are agrologists, as they have to be by the
law that set up the SIA, but a lot of the folks on the list of honorary
life members are folks I know, or knew, and have a lot of respect for.
Anyway, if you want to see the list, google the SIA. It's a simple
website.
Thanks to Richard Marleau, who I met for the first time at the banquet,
but who is on my email list. for putting my name forward. Richard seems
like a very nice man, but apparently he is living proof of P T Barnum's
dictum that you can fool some of the people all of the time.
Regards
Paul Beingessner
Farmers Pay Hefty Price for Guessing Wrong 31/03/08
Column # 664 Farmers Pay Hefty Price for Guessing Wrong 31/03/08
The end-of-March Pool Return Outlook from the CWB for wheat, durum and
barley is largely unchanged from the PRO in February. This means the CWB
has increasing confidence in these numbers and they are unlikely to
change substantially this crop year. In fact, the CWB has asked the
federal government to allow an increase to initial payments of some $50
per tonne for spring wheat and $80 for durum.
This will make 1 CWRS with 13.5 per cent protein, loaded in a producer
car in my home town of Truax, worth $7.56 net per bushel initially with
potential for that to rise to $9.27 a bushel if the PRO is realized. The
value of durum wheat is even more substantial. Number 1 CWAD 14.5 will
bring $12.09 a bushel initially, with potential for $13.36 by the time
the pool is finished.
However, not all western Canadian farmers shipping these grains will
realize these high values. Some who chose to sign up with the CWB's
Fixed Price Contracts (FPC) will pay a hefty price for trying to
outguess the market for red spring wheat.
In response to farmer pressure to be able to lock in prices early in the
crop year, and because of legislative change in 1998, the CWB began to
offer a variety of contracting options to farmers. One of these is the
Fixed Price Contract (FPC). Under this, farmers are able to lock in a
price prior to, and early in the crop year. Before this crop year
began, the FPC looked better than the PRO that was predicted for the
upcoming year. For example, the PRO on July 13, 2007 for 1 CWRS 13.5 was
at $228, while the FPC was at $245.46. Farmers who locked in that day
would be expecting a substantial return over the price obtained by
farmers who stayed in the pool.
Of course, what followed was a steady and remarkable upturn in grain
prices. The average FPC for the crop year was taken at $244.83 per tonne
for 1 CWRS 13.5. The current PRO is $388 per tonne, meaning the average
producer who signed a FPC has left $143 a tonne on the table. Since 3.5
million tonnes were signed up under the FPC, farmers have left an
astonishing $501 million on the table, compared to what they would have
received if they stayed in the pool.
Nor is this phenomenon unique to CWB grains. A farmer here recently
complained to me that by pricing his lentils early in the crop year, he
had foregone some $50,000 compared to today's prices.
Farmers in this position in Canada have much company in the U.S. The
average elevator bid in North Dakota for wheat equivalent to 1 CWRS 13.5
been $9.69 a bushel, but the average price actually received by farmers
in North Dakota to date has been $6.50 a bushel. Obviously, farmers
there also jumped into the market early when prices looked good compared
to last year's.
There are two points of interest here. Since the CWB developed this
option, farmers have sometimes done better with FPCs than those who
stayed in the pool. However, there is no doubt they guessed badly this
year. American farmers were no more astute. The other point is that
farmers who are now screaming about the current CWB prices for wheat and
durum, compared with U.S. elevator prices, are being particularly
cynical. Recently, a handful of anti-CWB farmers are arguing that the
CWB has failed farmers since the PRO is not equal to American spot
prices for today. Unless they are especially naïve, these farmers have
to know that such prices are offered only because there is virtually no
grain left on American farms. As I said earlier, the average North
Dakota farmer got $6.50 a bushel for his red wheat, not $20. He can only
wish he was in the enviable position of farmers in the CWB pool right
now.
Farmers with FPCs need to understand that, just as in the open market,
they must deliver their entire contracts to the CWB. They cannot be
short on tonnage or they will have to buy out their contracts. Since the
CWB sells futures contracts to hedge the FPCs, it must purchase them
back if farmers default on delivery to the contract. Farmers will be
billed for that buyout, which is based on the difference between futures
prices at the time of sign-up compared to futures prices on the day of
the buyout. The CWB has no choice but to hold farmers to these
contracts. As is the case for open market grains, farmers are obliged to
fill their contracts, and the mechanism the CWB uses to deal with
default is essentially the same as grain companies use with open market
contracts.
Buyouts can be extremely expensive. Currently they are running as high
as $200 per tonne, so if a farmer has signed up 100 tonnes but delivers
95, he could be on the hook for $1,000.
Another issue facing some farmers is that when they deliver to an
elevator they will receive the initial CWB price. The elevator does not
know the value of the farmer's FPC. If the initial is higher than the
FPC, like it is now, the farmer will then receive a bill from the CWB
for the difference. Currently, there are hundreds of thousands of tonnes
of grain in this position. Farmers should understand why this is
happening.
Lastly, price pooling has been getting a bad rap in some quarters. There
is no doubt that in a falling market, it can be profitable to take a
FPC. In a rising market, it is not such a good idea. How good are you at
guessing which type of year it will be? This year, farmers in the U.S.
and Canada have guessed wrong and the consequences are huge. Price
pooling looks like a pretty good deal after all.
The end-of-March Pool Return Outlook from the CWB for wheat, durum and
barley is largely unchanged from the PRO in February. This means the CWB
has increasing confidence in these numbers and they are unlikely to
change substantially this crop year. In fact, the CWB has asked the
federal government to allow an increase to initial payments of some $50
per tonne for spring wheat and $80 for durum.
This will make 1 CWRS with 13.5 per cent protein, loaded in a producer
car in my home town of Truax, worth $7.56 net per bushel initially with
potential for that to rise to $9.27 a bushel if the PRO is realized. The
value of durum wheat is even more substantial. Number 1 CWAD 14.5 will
bring $12.09 a bushel initially, with potential for $13.36 by the time
the pool is finished.
However, not all western Canadian farmers shipping these grains will
realize these high values. Some who chose to sign up with the CWB's
Fixed Price Contracts (FPC) will pay a hefty price for trying to
outguess the market for red spring wheat.
In response to farmer pressure to be able to lock in prices early in the
crop year, and because of legislative change in 1998, the CWB began to
offer a variety of contracting options to farmers. One of these is the
Fixed Price Contract (FPC). Under this, farmers are able to lock in a
price prior to, and early in the crop year. Before this crop year
began, the FPC looked better than the PRO that was predicted for the
upcoming year. For example, the PRO on July 13, 2007 for 1 CWRS 13.5 was
at $228, while the FPC was at $245.46. Farmers who locked in that day
would be expecting a substantial return over the price obtained by
farmers who stayed in the pool.
Of course, what followed was a steady and remarkable upturn in grain
prices. The average FPC for the crop year was taken at $244.83 per tonne
for 1 CWRS 13.5. The current PRO is $388 per tonne, meaning the average
producer who signed a FPC has left $143 a tonne on the table. Since 3.5
million tonnes were signed up under the FPC, farmers have left an
astonishing $501 million on the table, compared to what they would have
received if they stayed in the pool.
Nor is this phenomenon unique to CWB grains. A farmer here recently
complained to me that by pricing his lentils early in the crop year, he
had foregone some $50,000 compared to today's prices.
Farmers in this position in Canada have much company in the U.S. The
average elevator bid in North Dakota for wheat equivalent to 1 CWRS 13.5
been $9.69 a bushel, but the average price actually received by farmers
in North Dakota to date has been $6.50 a bushel. Obviously, farmers
there also jumped into the market early when prices looked good compared
to last year's.
There are two points of interest here. Since the CWB developed this
option, farmers have sometimes done better with FPCs than those who
stayed in the pool. However, there is no doubt they guessed badly this
year. American farmers were no more astute. The other point is that
farmers who are now screaming about the current CWB prices for wheat and
durum, compared with U.S. elevator prices, are being particularly
cynical. Recently, a handful of anti-CWB farmers are arguing that the
CWB has failed farmers since the PRO is not equal to American spot
prices for today. Unless they are especially naïve, these farmers have
to know that such prices are offered only because there is virtually no
grain left on American farms. As I said earlier, the average North
Dakota farmer got $6.50 a bushel for his red wheat, not $20. He can only
wish he was in the enviable position of farmers in the CWB pool right
now.
Farmers with FPCs need to understand that, just as in the open market,
they must deliver their entire contracts to the CWB. They cannot be
short on tonnage or they will have to buy out their contracts. Since the
CWB sells futures contracts to hedge the FPCs, it must purchase them
back if farmers default on delivery to the contract. Farmers will be
billed for that buyout, which is based on the difference between futures
prices at the time of sign-up compared to futures prices on the day of
the buyout. The CWB has no choice but to hold farmers to these
contracts. As is the case for open market grains, farmers are obliged to
fill their contracts, and the mechanism the CWB uses to deal with
default is essentially the same as grain companies use with open market
contracts.
Buyouts can be extremely expensive. Currently they are running as high
as $200 per tonne, so if a farmer has signed up 100 tonnes but delivers
95, he could be on the hook for $1,000.
Another issue facing some farmers is that when they deliver to an
elevator they will receive the initial CWB price. The elevator does not
know the value of the farmer's FPC. If the initial is higher than the
FPC, like it is now, the farmer will then receive a bill from the CWB
for the difference. Currently, there are hundreds of thousands of tonnes
of grain in this position. Farmers should understand why this is
happening.
Lastly, price pooling has been getting a bad rap in some quarters. There
is no doubt that in a falling market, it can be profitable to take a
FPC. In a rising market, it is not such a good idea. How good are you at
guessing which type of year it will be? This year, farmers in the U.S.
and Canada have guessed wrong and the consequences are huge. Price
pooling looks like a pretty good deal after all.
Government Scolding Not Too Effective
Column # 663 Government Scolding Not Too Effective 24/03/08
Farmers are generally pretty happy about the price of grain these days.
The exception would be livestock farmers who are acutely aware at the
moment that one person's meat is another's poison. Whatever their mental
state, farmers are universally concerned that the price boom for grains
will largely be snatched away by input suppliers. Even the House of
Commons Standing Committee on Agriculture seems mildly concerned.
Members of that committee gave a browbeating to some input manufacturers
a couple weeks back, which is usually about how far such things are
taken by the House. Politicians seem to think a good scolding will do
the trick of getting these folks to act reasonably. Fertilizer suppliers
around here must have thick skins, because it hasn't worked on them so
far.
If the government really wanted to improve things for farmers, there is
lots it could do, and a few things it should think hard about not doing.
Agriculture Minister Gerry Ritz's obsession with getting rid of Kernal
Visual Distinguisability (KVD) is one of the latter. I would agree that
KVD should be eventually eliminated. It does indeed have some impact on
the ability to improve wheat varieties. The grain industry collectively
was on target to do this before Ritz cracked open Pandora's box by
announcing it would be gone by the start of the new crop year.
Even Ritz's advisors at Agriculture Canada were against the hasty
agenda, telling the Minister that the industry is not ready for this and
it might affect our ability to convince our customers they are receiving
their customary quality. One rumor I've heard is that grain companies
have been mumbling about raising their elevation fees by $4 a tonne to
manage the risk that will come with the end of KVD. I will admit that
single-mindedness can sometimes be a virtue. In the case of the
Agriculture Minister, it looks more like stubborn foolishness.
Nor will ending KVD bring immediate rewards. It takes years to bring new
varieties to market, and a firm date of 2010, as the industry was
proposing, would have allowed two things to happen. It would have given
plant breeders the go-ahead signal to move these varieties and research
forward, and it would have given the industry a deadline to meet to deal
with the effects of the move. In this case, the Minister should have
taken his own mantra to heart - "Lead, follow or get out of the way" -
and gotten out of the way. If farmers face financial repercussions
because of this move, years before they see any benefits, they'll know
whom to thank.
In the realm of doing something that would truly benefit farmers, the
government should consider taking some firm action on the transportation
issue. Grain shippers have been especially concerned with the railways'
performance. For example, on average for 2007, the railways provided
only 52 per cent of the rail cars ordered by the CWB when required,
compared to 83 per cent in 1999. That is a 31-per-cent service decline
over the last eight years.
The government stated its intention to conduct a review of rail service
when Bill C8 passed the House. Since this has happened, we can only wait
for the Minister of Transport to give us details on the review. Farm
groups are pressing for the government to also conduct a full costing
review for the grain industry. The last review was in 1992, and farmers
are now paying excessively for service that is mediocre at best. When
the Western Grain Transportation Act was passed, a contribution to fixed
costs equal to 20 percent of variable costs was deemed a suitable return
to the railways. Estimates show that this number has ballooned to over
50 percent.
A re-costing could save farmers many millions of dollars while
reflecting the real costs to the railways along with an adequate
contribution to fixed costs. The government could take this step, and
give the railways a scolding as well. That would satisfy political egos
while actually accomplishing something concrete. It would be a nice
change.
Farmers are generally pretty happy about the price of grain these days.
The exception would be livestock farmers who are acutely aware at the
moment that one person's meat is another's poison. Whatever their mental
state, farmers are universally concerned that the price boom for grains
will largely be snatched away by input suppliers. Even the House of
Commons Standing Committee on Agriculture seems mildly concerned.
Members of that committee gave a browbeating to some input manufacturers
a couple weeks back, which is usually about how far such things are
taken by the House. Politicians seem to think a good scolding will do
the trick of getting these folks to act reasonably. Fertilizer suppliers
around here must have thick skins, because it hasn't worked on them so
far.
If the government really wanted to improve things for farmers, there is
lots it could do, and a few things it should think hard about not doing.
Agriculture Minister Gerry Ritz's obsession with getting rid of Kernal
Visual Distinguisability (KVD) is one of the latter. I would agree that
KVD should be eventually eliminated. It does indeed have some impact on
the ability to improve wheat varieties. The grain industry collectively
was on target to do this before Ritz cracked open Pandora's box by
announcing it would be gone by the start of the new crop year.
Even Ritz's advisors at Agriculture Canada were against the hasty
agenda, telling the Minister that the industry is not ready for this and
it might affect our ability to convince our customers they are receiving
their customary quality. One rumor I've heard is that grain companies
have been mumbling about raising their elevation fees by $4 a tonne to
manage the risk that will come with the end of KVD. I will admit that
single-mindedness can sometimes be a virtue. In the case of the
Agriculture Minister, it looks more like stubborn foolishness.
Nor will ending KVD bring immediate rewards. It takes years to bring new
varieties to market, and a firm date of 2010, as the industry was
proposing, would have allowed two things to happen. It would have given
plant breeders the go-ahead signal to move these varieties and research
forward, and it would have given the industry a deadline to meet to deal
with the effects of the move. In this case, the Minister should have
taken his own mantra to heart - "Lead, follow or get out of the way" -
and gotten out of the way. If farmers face financial repercussions
because of this move, years before they see any benefits, they'll know
whom to thank.
In the realm of doing something that would truly benefit farmers, the
government should consider taking some firm action on the transportation
issue. Grain shippers have been especially concerned with the railways'
performance. For example, on average for 2007, the railways provided
only 52 per cent of the rail cars ordered by the CWB when required,
compared to 83 per cent in 1999. That is a 31-per-cent service decline
over the last eight years.
The government stated its intention to conduct a review of rail service
when Bill C8 passed the House. Since this has happened, we can only wait
for the Minister of Transport to give us details on the review. Farm
groups are pressing for the government to also conduct a full costing
review for the grain industry. The last review was in 1992, and farmers
are now paying excessively for service that is mediocre at best. When
the Western Grain Transportation Act was passed, a contribution to fixed
costs equal to 20 percent of variable costs was deemed a suitable return
to the railways. Estimates show that this number has ballooned to over
50 percent.
A re-costing could save farmers many millions of dollars while
reflecting the real costs to the railways along with an adequate
contribution to fixed costs. The government could take this step, and
give the railways a scolding as well. That would satisfy political egos
while actually accomplishing something concrete. It would be a nice
change.
Sunday, March 30, 2008
Farmers Drowning in Hogwash 16/03/08
"Hog outlook bright despite tough time"
The headline blaring from the page in a recent Manitoba Co-operator
would have been funny if the topic wasn't so serious. It could also have
been accompanied by a couple other adages like "It's always darkest
before the dawn" or "It's better to light a single candle than to curse
the darkness". If a person had a nickel for every prediction that good
times were just around the corner for the hog industry, you could
probably buy a hog barn and fill it with stock.
Actually, the barn might cost you something, but the stock could likely
be had for free. Another farm paper, the Western Producer, carried a
story the same week about the inability of farmers to get anything at
all for cull sows and boars. One Alberta hog farmer was told he would
have to pay four cents a pound to get someone to take his cull sows.
All this is occurring because there is an oversupply of pork, a
non-competitive processing industry, high feed grain prices and so on.
The problem is similar in the cattle industry. Canada's current cowherd
was built on the prospect of free trade and the reality of a low
Canadian dollar. Unfortunately, a high Canadian dollar pretty much nixes
the benefits of free trade, which hasn't been all that free lately
anywayy. Some analysts predict that with grain prices likely to remain
high for some years, the Canadian cattle herd will shrink back to a size
that fits the domestic market.
It is, after all, about supply and demand. If there is no demand for
beef at higher prices, and today's prices make a farm unsustainable,
farmers will leave the industry, supply will decline and prices will
rise correspondingly. No one really doubts that this will occur in the
beef industry. That it isn't happening yet in a significant way probably
reflects the fact that farmers usually hang on a year or two after the
market tells them to get out. It's like you can't believe the family dog
bit you until he does it again.
So in the free market, the same thing should happen to the hog industry.
Right? But hogs have been an unrelenting disaster in Canada for years
now, sustained only by repeated government bailouts to the industry.
Short of bankruptcy, which did take down quite a few barns in western
Canada in recent years, hog producers remain stubbornly productive. The
once-reliable four year hog cycle has been stuck on permanent press now
for quite a while. Despite this, producers have failed to be squeezed
out, as markets would say they should. Now, we even have a government
program paying farmers to kill their sows and boars, in an effort to
force the downsizing that obstinately hasn't occurred.
There is a simple reason for the failure of economic theory here, and it
is centred in the factory hog farm. When hogs were produced on thousands
of family farms, dozens here, hundreds there, farmers easily shifted in
and out of production as prices dictated, thus setting up the
predictable cycle.
Large hog farms cannot afford to do this, considering the huge amounts
of capital they have tied up. They must produce, even if the margins are
zero. Things have to become excruciatingly bad for the big guys to
leave. With all the small producers gone, the market cycle just doesn't
work.
Cattle respond to a longer cycle, more like ten years. With thousands of
cow-calf producers, the cycle will assert itself. With high grain
prices, ageing farmers, and paltry returns, many will leave the
business, never to return. But look at what is happening to the cow-calf
industry. Economics dictate that herds today must be huge to produce any
kind of return. While the average herd is still around 60 cows, there
are increasing numbers of farmers running 400, 500 or 1,000 cows. And
these folks are not mixed farmers. That many cows don't leave a lot of
time to grow grain.
There are some parallels to the hog industry here. Cattle producers of
this size are not reducing herds in response to low prices. Many are, in
fact, expanding, taking advantage of fire-sale cow prices.
Given this, will the cow cycle begin to break down, as it has for hogs?
Will we eventually see the government paying farmers to shoot cows and
dump them for the coyotes in order to get the price back up? I figure
that day will come right around the time we start to see headlines
predicting a rosy future for the cattle industry just around the corner.
(c) Paul Beingessner Column # 662
The headline blaring from the page in a recent Manitoba Co-operator
would have been funny if the topic wasn't so serious. It could also have
been accompanied by a couple other adages like "It's always darkest
before the dawn" or "It's better to light a single candle than to curse
the darkness". If a person had a nickel for every prediction that good
times were just around the corner for the hog industry, you could
probably buy a hog barn and fill it with stock.
Actually, the barn might cost you something, but the stock could likely
be had for free. Another farm paper, the Western Producer, carried a
story the same week about the inability of farmers to get anything at
all for cull sows and boars. One Alberta hog farmer was told he would
have to pay four cents a pound to get someone to take his cull sows.
All this is occurring because there is an oversupply of pork, a
non-competitive processing industry, high feed grain prices and so on.
The problem is similar in the cattle industry. Canada's current cowherd
was built on the prospect of free trade and the reality of a low
Canadian dollar. Unfortunately, a high Canadian dollar pretty much nixes
the benefits of free trade, which hasn't been all that free lately
anywayy. Some analysts predict that with grain prices likely to remain
high for some years, the Canadian cattle herd will shrink back to a size
that fits the domestic market.
It is, after all, about supply and demand. If there is no demand for
beef at higher prices, and today's prices make a farm unsustainable,
farmers will leave the industry, supply will decline and prices will
rise correspondingly. No one really doubts that this will occur in the
beef industry. That it isn't happening yet in a significant way probably
reflects the fact that farmers usually hang on a year or two after the
market tells them to get out. It's like you can't believe the family dog
bit you until he does it again.
So in the free market, the same thing should happen to the hog industry.
Right? But hogs have been an unrelenting disaster in Canada for years
now, sustained only by repeated government bailouts to the industry.
Short of bankruptcy, which did take down quite a few barns in western
Canada in recent years, hog producers remain stubbornly productive. The
once-reliable four year hog cycle has been stuck on permanent press now
for quite a while. Despite this, producers have failed to be squeezed
out, as markets would say they should. Now, we even have a government
program paying farmers to kill their sows and boars, in an effort to
force the downsizing that obstinately hasn't occurred.
There is a simple reason for the failure of economic theory here, and it
is centred in the factory hog farm. When hogs were produced on thousands
of family farms, dozens here, hundreds there, farmers easily shifted in
and out of production as prices dictated, thus setting up the
predictable cycle.
Large hog farms cannot afford to do this, considering the huge amounts
of capital they have tied up. They must produce, even if the margins are
zero. Things have to become excruciatingly bad for the big guys to
leave. With all the small producers gone, the market cycle just doesn't
work.
Cattle respond to a longer cycle, more like ten years. With thousands of
cow-calf producers, the cycle will assert itself. With high grain
prices, ageing farmers, and paltry returns, many will leave the
business, never to return. But look at what is happening to the cow-calf
industry. Economics dictate that herds today must be huge to produce any
kind of return. While the average herd is still around 60 cows, there
are increasing numbers of farmers running 400, 500 or 1,000 cows. And
these folks are not mixed farmers. That many cows don't leave a lot of
time to grow grain.
There are some parallels to the hog industry here. Cattle producers of
this size are not reducing herds in response to low prices. Many are, in
fact, expanding, taking advantage of fire-sale cow prices.
Given this, will the cow cycle begin to break down, as it has for hogs?
Will we eventually see the government paying farmers to shoot cows and
dump them for the coyotes in order to get the price back up? I figure
that day will come right around the time we start to see headlines
predicting a rosy future for the cattle industry just around the corner.
(c) Paul Beingessner Column # 662
Farmers Guess Badly on Wheat Sales 22/10/07
Western Canadian Wheat Grower vice-president Stephen Vandervalk is no
quitter. Despite showing the world how wrong he was he isn't giving up
on his diatribe against the Canadian Wheat Board.
In August, the feisty Albertan ranted against the CWB's Pool Return
Outlook (PRO) for barley. He trumpeted his own cleverness at selling
much of his yet-unharvested crop before the CWB announced it would
challenge the federal government's attempt to remove the single desk
from malt barley and exports of feed barley. That challenge, according
to Vandervalk, caused the price of feed barley to plummet and cost him
big bucks on his remaining unsold stocks. As to malt barley, Vandervalk
said a maltster offered him $4.75 a bushel for his. The court case put a
stop to that and he claimed the lower price the CWB was projecting would
cost him dearly.
A short month later, Vandervalk should have been gnashing his teeth. The
September PRO was projecting $5.43 for malt barley at his Alberta home
and the feed barley he pre-sold for $4 was projected to be worth $4.64
delivered to the CWB. Vandervalk lost big all right, not because of the
CWB, but because of his own feed barley marketing folly. The CWB court
case saved his from making the same mistake with his malt barley.
Rather than be chastened by his marketing failure, Vandervalk continued
on his quest to damn the CWB. In late September, he was showering farm
newspapers with information comparing U.S. elevator prices to the CWB
PRO. According to these figures, Vandervalk was losing a small fortune
because he could not sell his durum across the line. Comparing the
elevator price in Montana, which hit $13.10 a bushel that week to the
CWB PRO of $10.70, Vandervalk's estimated deficit would be $151,000.
You have to give Vandervalk some credit here. Despite being prevented
from ever marketing his own durum by the CWB monopoly, he apparently
would be far better at it than most American farmers who do it all the
time. According to the marketing director of the North Dakota Wheat
Commission, most durum farmers in his state missed out on the high durum
prices because they sold earlier, at much lower prices. Those prices
looked good at the time and no one was projecting the heights to which
durum would soar. Nor were North Dakota farmers the only poor marketers.
Wheat farmers in Washington state also blew it, selling some 70% of
their crop before prices reached their highs. As much as 50% was sold at
values roughly half those available today.
If Vandervalk were selling his own durum, it seems safe to assume he
would have done what he did with his feed barley - sell much of it early
for what appeared to be good prices. It is unlikely he would have had
enough foresight to wait until the day it hit $13 at a Montana elevator.
It is also unlikely any Montana elevator would have been able to absorb
his reported 63,000 bushels in one fell swoop.
Luckily, and despite his efforts to the contrary, Vandervalk has the CWB
to protect him from his misadventures. No, the CWB will likely not sell
all of western Canada's 4 or 5 million tonnes of durum at $13.00 a
bushel. The U.S. can absorb only a small amount of our durum. The rest
will be sold over the course of the crop year for various prices to
various countries. And it will incur some large rail and ocean freight
bills. But this year, the CWB will likely return far more to durum
farmers in western Canada than their American brothers will receive,
since much of their durum has already been sold for a relatively low
price. Stephen Vandervalk is one of those lucky Canadian farmers, and if
he were honest with himself, he would admit it.
(c) Paul Beingessner Column # 642
quitter. Despite showing the world how wrong he was he isn't giving up
on his diatribe against the Canadian Wheat Board.
In August, the feisty Albertan ranted against the CWB's Pool Return
Outlook (PRO) for barley. He trumpeted his own cleverness at selling
much of his yet-unharvested crop before the CWB announced it would
challenge the federal government's attempt to remove the single desk
from malt barley and exports of feed barley. That challenge, according
to Vandervalk, caused the price of feed barley to plummet and cost him
big bucks on his remaining unsold stocks. As to malt barley, Vandervalk
said a maltster offered him $4.75 a bushel for his. The court case put a
stop to that and he claimed the lower price the CWB was projecting would
cost him dearly.
A short month later, Vandervalk should have been gnashing his teeth. The
September PRO was projecting $5.43 for malt barley at his Alberta home
and the feed barley he pre-sold for $4 was projected to be worth $4.64
delivered to the CWB. Vandervalk lost big all right, not because of the
CWB, but because of his own feed barley marketing folly. The CWB court
case saved his from making the same mistake with his malt barley.
Rather than be chastened by his marketing failure, Vandervalk continued
on his quest to damn the CWB. In late September, he was showering farm
newspapers with information comparing U.S. elevator prices to the CWB
PRO. According to these figures, Vandervalk was losing a small fortune
because he could not sell his durum across the line. Comparing the
elevator price in Montana, which hit $13.10 a bushel that week to the
CWB PRO of $10.70, Vandervalk's estimated deficit would be $151,000.
You have to give Vandervalk some credit here. Despite being prevented
from ever marketing his own durum by the CWB monopoly, he apparently
would be far better at it than most American farmers who do it all the
time. According to the marketing director of the North Dakota Wheat
Commission, most durum farmers in his state missed out on the high durum
prices because they sold earlier, at much lower prices. Those prices
looked good at the time and no one was projecting the heights to which
durum would soar. Nor were North Dakota farmers the only poor marketers.
Wheat farmers in Washington state also blew it, selling some 70% of
their crop before prices reached their highs. As much as 50% was sold at
values roughly half those available today.
If Vandervalk were selling his own durum, it seems safe to assume he
would have done what he did with his feed barley - sell much of it early
for what appeared to be good prices. It is unlikely he would have had
enough foresight to wait until the day it hit $13 at a Montana elevator.
It is also unlikely any Montana elevator would have been able to absorb
his reported 63,000 bushels in one fell swoop.
Luckily, and despite his efforts to the contrary, Vandervalk has the CWB
to protect him from his misadventures. No, the CWB will likely not sell
all of western Canada's 4 or 5 million tonnes of durum at $13.00 a
bushel. The U.S. can absorb only a small amount of our durum. The rest
will be sold over the course of the crop year for various prices to
various countries. And it will incur some large rail and ocean freight
bills. But this year, the CWB will likely return far more to durum
farmers in western Canada than their American brothers will receive,
since much of their durum has already been sold for a relatively low
price. Stephen Vandervalk is one of those lucky Canadian farmers, and if
he were honest with himself, he would admit it.
(c) Paul Beingessner Column # 642
Friday, March 21, 2008
Paul Beingessner
Paul Beingessner is a farmer and journalist from Saskatchewan whom I greatly admire. His knowledgeable articles on rural issues appear in many small-town papers across the prairies as well as in farm journals. He scathes the politicians and corporations who escape the scrutiny of most of the city-based media, even though the issues do also affect urban people in food prices and the countries economy.
Wednesday, December 20, 2006
The New CBC
The CBC has been a canadian institution. A source of truth in an ever-deceitful world. They got it wrong on many occasions, but they didn't appear beholden to the large corporate behemoths who controlled the dispersion of media events, and also appeared as an 3rd party source unfettered by government or corporate control.
Unfortunately that is no longer true and I mourn their passing. I just sent this message to the CBC newsroom in the somewhat vain hope that some there might try and ressurect their once proud tradition. even if it is in the form of a blog. There are many extremely capable journalists out there and few canadian blogs reflect that.
Here is a note of protest sent to that audience. I hope even one CBC journalist responds to it.
What on earth is happening to CBC. It's as if the news department has turned into Fox Broadcasting, that notorious US adjunct to the US State department. Similarly the CBC echo's many of the right-wing positions uncritically. Has the CBC simply become an adjuct of the ruling government of the day, a shadow of the controlled press they critisize ?
Aside from the abysmal set-up program on the National which tried to convince canadians to join the war on mid-east people by using local arabic quislings to present the case, the CBC has more and more simply thru local programming shown the obvious that canadians oppose the war and our role in the occupation of Afghanistan. Despite that the National and CBC hiarchy has presented programming which glorifies our role in Afghanistan as peacekeepers rather than occupying troops of an army headed by the USA. Each pronouncements by a canadian General lusting for bloody glory has been uncritically transmitted and propaganda worthy of the KGB about supporting our "boys" has occupied the news, including long newsclips showing the families back home.
Unfortunately that is no longer true and I mourn their passing. I just sent this message to the CBC newsroom in the somewhat vain hope that some there might try and ressurect their once proud tradition. even if it is in the form of a blog. There are many extremely capable journalists out there and few canadian blogs reflect that.
Here is a note of protest sent to that audience. I hope even one CBC journalist responds to it.
What on earth is happening to CBC. It's as if the news department has turned into Fox Broadcasting, that notorious US adjunct to the US State department. Similarly the CBC echo's many of the right-wing positions uncritically. Has the CBC simply become an adjuct of the ruling government of the day, a shadow of the controlled press they critisize ?
Aside from the abysmal set-up program on the National which tried to convince canadians to join the war on mid-east people by using local arabic quislings to present the case, the CBC has more and more simply thru local programming shown the obvious that canadians oppose the war and our role in the occupation of Afghanistan. Despite that the National and CBC hiarchy has presented programming which glorifies our role in Afghanistan as peacekeepers rather than occupying troops of an army headed by the USA. Each pronouncements by a canadian General lusting for bloody glory has been uncritically transmitted and propaganda worthy of the KGB about supporting our "boys" has occupied the news, including long newsclips showing the families back home.
But the body bags and injured soldiers keep increasing, as we learn the hard way as others have in the last century, including the British, Russian, and our own soldiers, that the Afghani ar ungovernable.
What is different is that the fundamentalist Taliban with it's Al Qua heda intelligentsia as set up and supported by the US in order to embarass the Soviet Union has now assumed a life of its own and the US supported Northern warlords are just as bad. The US has become the greatest creater of strife in the middle east (including it's uncritical and opportunistic support of the theocratic state of Israel.), surpassing even the British in it's clumsy attempt to aghieve domination of oil supplies.
The US designs are not very subtle yet CBC insists on presenting it in the US mold, Canadians are in Afghanistan to achieve a democracy implant.(whether Afghanis want it or not).
It seems however that CBCs news-room is a capture of the Harper right.
So stories about the attempt by the conservatives to abolish the Wheat-Board are presented as a fight between the MONOPOLY wheat-board and the free traders. Despite the fact that without the wheat-board small farmers would be at the mercy of the big corporations like Cargill or Agricore. In every newscast the conservative touchword MONOPOLY appears, despite the fact that corporate monopolies are what the farmers banded together to oppose in the 1930s.
In Manitoba the brain-addled or Donald Blenhem influenced newsroom ran with the Fraser Institute press release which showed that Manitoba ranked first in charitable donations in Canada. It was however 27th as compared to the Maryland, US first. The press release also didn't mention whether that included corporate donations, which can give considerable tax release to corporations.
An additional news-release statement from the right-wing Fraser institute (who wants to privatize any government institution, from the provincial hydro. phone companies and medicare) implied that the fault was with the social welfare institutions who gave the impression that the poor were taken care of. (The logic being to do away with these impediments to charity by the wealthy). Their logic flies in the fact that Manitobans elect a government which despite it's faults plays to the support of those less fortunate.
However the machinations of the Frase Institute didn't even impinge on the news report of the fearless, eagle-eyed denizens of the CBC news-room. Yellow jounalists, complacent collaborators, reduced to the status of government mouthpieces as in Latin America ? Certainly not what I would expect from canadian jounalists or the journalists being defended from death by PENN. Simply careerist slime.
As an old friend of mine, a reporter for the Montreal Gazette, Nick Auf Der Maur would say, "there are swine, and then there are journalistic swine. They simply shadow the editor, who's also a swine."
Whoa Suzanna.
Tuesday, August 01, 2006
Letter to My American Neighbours
These are terrible times. The US has become the state that many of us feared they would become without the counterweight of the Soviet Union. Not that the Soviet Union was a force for democracy or justice, but that they contended for the approval of the world's people.
Without contestation, the US has become the new Romans. They support and impose their majesty on any nation that impedes their imperial aims. With "Democracy" as their war-cry they invade any nation that will not bow to their aims, which is not democracy but subservience. Their "New World Order" is simply a catch-phrase for imposing an imperial regime on the world. They stand for the impoverishment and subservience of all peoples for the enrichment of the US. The decimation of Lebanon by the theocratic terrorist state of Israel, maintained economically and militarily supplied by the US is only the beginning. Syria is the eventual target by the most powerful military regime in the mid-east, which also has atomic bombs, Israel.
The only thing that has impeded US imperialist designs is the heroism of the Afghani and Iraqi people. Had they achieved an easy victory oil-rich Iran would have been an easier target, sandwiched as it is between Afghanistan and Iraq. Close by is also the repressive US client-state of Saudi Arabia. But puppet states are not easy to establish.
And of course there is also the countries such as Venezuela, the 3rd largest supplier of oil to the US who is using oil revenues to help their people, rather than enriching big US oil corporations, not to mention Cuba which has been a thorn mainly because they defied American might because the people supported the government, nor Bolivia which has defied the US and would use oil revenues to raise their people above impoverishment. These people can thank the Iraqui insurgents, otherwise they would likely be invaded, like Guatamala so many years ago. Or Grenada, or Haiti, or the Dominican Republic, or Chile under the supervision of the CIA, or Nicarauga by Olier North, and so many other countries. The "Empire" is getting short of troops for it's nefarious ventures.
Hopefully because the american people are waking up and are no longer willing to fight for the profits of corporations cloaking themselves as patriots. "The Rights of Man"by Thomas Paine, one of the great fathers of the American Revolution should be a required readings in schools to counter all the crap that now seems endemic and accepted across this once great country. Lack of dilligence was why Hitler gained power in Germany. Forgetfullness of the values which formed your country is why the US seems destined to the same fate.
Since at this time the US is embroiled in an imperial war, which like in Viet-Nam they will not win and there is an immense deficit of $3 trillion, one can only imagine a bad outcome which WILL affect the American people. A collapse of the US and world economy. Hopefully the US populace will wake up before this happens and somehow manage to turn things around.
As a canadian, whose parents were born in the US, and will also suffer from this US folly, I can only hope that the original beliefs of the constitution of the US will once again resurface and reject the birthing of a fascist America.
Without contestation, the US has become the new Romans. They support and impose their majesty on any nation that impedes their imperial aims. With "Democracy" as their war-cry they invade any nation that will not bow to their aims, which is not democracy but subservience. Their "New World Order" is simply a catch-phrase for imposing an imperial regime on the world. They stand for the impoverishment and subservience of all peoples for the enrichment of the US. The decimation of Lebanon by the theocratic terrorist state of Israel, maintained economically and militarily supplied by the US is only the beginning. Syria is the eventual target by the most powerful military regime in the mid-east, which also has atomic bombs, Israel.
The only thing that has impeded US imperialist designs is the heroism of the Afghani and Iraqi people. Had they achieved an easy victory oil-rich Iran would have been an easier target, sandwiched as it is between Afghanistan and Iraq. Close by is also the repressive US client-state of Saudi Arabia. But puppet states are not easy to establish.
And of course there is also the countries such as Venezuela, the 3rd largest supplier of oil to the US who is using oil revenues to help their people, rather than enriching big US oil corporations, not to mention Cuba which has been a thorn mainly because they defied American might because the people supported the government, nor Bolivia which has defied the US and would use oil revenues to raise their people above impoverishment. These people can thank the Iraqui insurgents, otherwise they would likely be invaded, like Guatamala so many years ago. Or Grenada, or Haiti, or the Dominican Republic, or Chile under the supervision of the CIA, or Nicarauga by Olier North, and so many other countries. The "Empire" is getting short of troops for it's nefarious ventures.
Hopefully because the american people are waking up and are no longer willing to fight for the profits of corporations cloaking themselves as patriots. "The Rights of Man"by Thomas Paine, one of the great fathers of the American Revolution should be a required readings in schools to counter all the crap that now seems endemic and accepted across this once great country. Lack of dilligence was why Hitler gained power in Germany. Forgetfullness of the values which formed your country is why the US seems destined to the same fate.
Since at this time the US is embroiled in an imperial war, which like in Viet-Nam they will not win and there is an immense deficit of $3 trillion, one can only imagine a bad outcome which WILL affect the American people. A collapse of the US and world economy. Hopefully the US populace will wake up before this happens and somehow manage to turn things around.
As a canadian, whose parents were born in the US, and will also suffer from this US folly, I can only hope that the original beliefs of the constitution of the US will once again resurface and reject the birthing of a fascist America.
Tuesday, May 09, 2006
I haven't posted much lately. Perhaps the "Shock and Awe" policies of western governments have rendered me speechless in the absence of any meaningfull response from the populace. I've also had consideral personal events to deal with. Mea culpa. Depession at the general world situation is no argument. Strangely I've also noticed a falling off in the posts of many articulate leftist bloggers. Perhaps my general malaise is shared.
Nevertheless I must continue, if only not to view myself much like the old gentleman in my village who would holler loudly and expond righteously in answer to the Sunday religious radio broadcasts. I find myself at times responding to some CBC broadcast with angry curses and cries of "Bullshit", "effing Fascist", or "yellow journalist doing a rotten spin".
So if anyone actually reads these missives I have a vehicle that says I'm not an insane antagonist ranting about nothing.
My intentions are to give an alternate view to the common responses to the issues that bedevil us.
Instead of just cursing the idiots that plague us I hope to advance what I think are rational ideas. We'll see if my intentions are followed up with my present resolve.
Nevertheless I must continue, if only not to view myself much like the old gentleman in my village who would holler loudly and expond righteously in answer to the Sunday religious radio broadcasts. I find myself at times responding to some CBC broadcast with angry curses and cries of "Bullshit", "effing Fascist", or "yellow journalist doing a rotten spin".
So if anyone actually reads these missives I have a vehicle that says I'm not an insane antagonist ranting about nothing.
My intentions are to give an alternate view to the common responses to the issues that bedevil us.
Instead of just cursing the idiots that plague us I hope to advance what I think are rational ideas. We'll see if my intentions are followed up with my present resolve.
Subscribe to:
Posts (Atom)
