http://cleantechnica.com/2011/08/01/making-hay-heating-homes-clean-renewable-homegrown-cheaper-than-coal/

Hay for Heating Homes: Clean, Renewable, Cheaper than Coal

by Andrew Burger  •  Aug. 1, 2011 •

“An Innovative, Modern Agriculture Sector to Foster Growth and Prosperity”

The “to  foster”  pushed prosperity into the future which is at least being honest, although it sounds more like a promise than a hope. The challenge for farmers is that every time they become innovative, which usually means borrowing more and more money, the benefits seem to flow up the marketing chain, to processors, or consumers.

The other telling bit in the news release was  a * next to the words “FPT ministers agreed”  (translation  FPT: Federal, Provincial, Territorial, in other words all the agriculture ministers in the country). The * was an indication that one province with a huge agriculture sector didn’t agree. Ontario agriculture minister Carol Mitchell refused to sign what’ s being called the St. Andrew’s Statement, a framework for how governments will respond to financial and environmental disasters under what’s called the “Growing Forward” program. In a news release Mitchell said  “I did not sign on to this flawed agreement on future programs because Ontario farmers told me it would take us in the wrong direction and not provide our family farms what they need to continue to bring quality, locally grown foods to Ontario tables.”  Federal Minister Gerry Ritz didn’t mention Mitchell’s position at a closing news conference last Friday.

The Maritime provinces don’t have a lot of resources to support what can be very expensive income support programs for farmers, so generally go along with whatever they can get from the Federal Government.  Farmers across the country have generally been critical of the Growing Forward programs, saying they’re  not responsive or predictable enough to the variety of weather and  market disruptions   producers face.  All of the major farm groups in Ontario support Mitchell’s decision not to sign the protocol saying someone has to stand up to the Federal Government.

Another province standing up to the Federal Government is Manitoba. It’s fighting Ottawa over its decision to end the marketing monopoly of the Canadian Wheat Board to sell wheat and barley.  This is from a report done in the Winnipeg Free Press:

“It leaves Manitoba as the lone holdout against what federal agriculture minister Gerry Ritz calls “marketing choice” but Manitoba agriculture minister Stan Struthers says he’s not backing down.

“We are the only province standing up for the farmers right to vote,” said Struthers.

He said he knew going into the meeting he was going to be a lone voice at the table but it didn’t “deter us from speaking very frankly to the federal minister.”

He acknowledged he is frustrated by the situation because he believes the decision is solely ideological.

“We’ve been clear we want (Ritz) to put a business case forward that says how this will be good for farmers,” said Struthers. “He hasn’t done that.”

The CWB is holding its own plebiscite among prairie farmers to determine support levels for the monopoly versus marketing choice.

However Ritz has dismissed the plebiscite saying it doesn’t matter how many farmers support the monopoly, any farmer who wants to sell grain somewhere else should be able to do so. He said the only vote needed was the May 2 federal election where Conservatives were elected in almost every rural riding affected by the wheat board.”

Inseminating cows? There’s an app for that

Derwin Clow is rarely parted from his iPhone, which allows him to monitor his dairy herd in the barn. (CBC)

A P.E.I. farmer is using an iPhone app to help him care for his cows.

Derwin Clow had seven cameras installed in his barn in Freetown, east of Summerside, and he can keep an eye on his most valuable assets from pretty much anywhere.

An app on his iPhone allows him to tune into any of the cameras for a live look at his herd.

Clow said he has watched his cows from the movie theatre, from home when he’s with his family or even in the middle of the night from bed.

“I don’t mind coming to the barn in the middle of the night to help a cow in labour, but I want her to actually be in labour if I’m going to make that trip out,” he said.

Cows can also get trapped or caught in equipment, meaning frequent checks are important. Farmers also want to know when the animals are going into heat.

“Maybe I’m out on the tractor, or gone to town. I can look at it and see if there’s any cows showing heat and then I can use the same phone to call the artificial inseminator and have her bred,” Clow said.
Steep learning curve

He paid about $3,000 for the system, with some help from a provincial Agriculture Department innovation program. He said it’s money well spent for the peace of mind it brings him.

Learning to use the technology was a challenge for the dairy farmer.

“It was quite an education for me. I had to ask a lot of questions, I was really green at it. But now that I’ve had it for a while, they’d have to pry it from my cold dead hands before I’d let it go,” he laughed.

Clow is a seventh-generation dairy farmer. He said his ancestors, who did everything by hand and eye, would be amazed by his iPhone app.

Here are a few Stuart Hillisms: from     http://www.stuartbhill.com/

• Always be humble & provisional in your knowing, & always open to new experiences & insights

• Devote most effort to the design & management of systems that can enable wellbeing, social justice & sustainability, & that are problem-proof vs. maintaining unsustainable, problem-generating systems, & devoting time to ‘problem-solving’, control, & input management

• See no ‘enemies’ – recognise such ‘triggers’ as indicators of woundedness, maldesign & mismanagement – everyone is always doing the best they can, given their potential, past experience & the present context – these are the three areas to work with

• Be paradoxical: ask for help & get on with the job (don’t postpone); give when you want to receive; give love when you might need it, or when you might feel hate

• Learn from everyone & everything, & seek mentors & collaborators at every opportunity

Stuart Hill does believe that personal change has to happen first before the world can be fixed. Many think the problems the world faces are too big and immediate to wait for that. Maybe both can happen at the same time. I did get this picture On Tuesday (July 5th, 2011) when Stuart Hill was in Charlottetown, PEI, and it was a moment.

Hill is the thin balding man (like me) in the middle.  He’s talking to George McRobie who also has a distinguished career in problem solving. He worked for years with E.F. Schumacher, famous for Small is Beautiful. Behind them both is  Ralph Martin who is just getting ready to take up a new job at Guelph University as the first chair focusing exclusively on sustainable agriculture production.

Almost everyone knows about “Small is Beautiful”, but I always thought the second part of the title of Schumacher’s book was more important “Economics As If People Mattered.”  Hill, Schumacher,  McRobie all try to get problems down to a scale where people can become constructively engaged, and not depend on some expert or product to fix everything.  All speak about tackling issues first within yourself, at home, in your neighborhood and community. I tend to agree, hoping that “government” will solve things could be a long wait, but starting locally to solve issues of food and energy production, protecting the natural capital that’s all around us, is profoundly empowering. Reading anything by Hill, Schumacher and McRobie is a good start, and seeing Ralph Martin’s interest in what they’re saying speaks well for what he’ll accomplish too. If I sound too optimistic, blame this week’s workshop with Stuart Hill.

Here’s a link to an interview with Stuart Hill:

http://www.box.net/shared/static/tsutpatrultgp3h7a4bj.mp3

Federal Agriculture Minister Gerry Ritz visited the wheat board offices in Winnipeg  two weeks ago, formally told officials the government’s plans to drastically change the wheat board’s role by the next crop year, and quickly left.

The wheat board is what’s called a “single desk seller” of  most of Western Canada’s most important grains. The board essentially buys all of the crop, and then markets it around the world. Farmers are assured they can sell their crop and the cheque won’t bounce. The wheat board gains marketing leverage by being the only seller, and some reports say this alone generates about a billion dollars more a year.

Here’s the rub though for the Conservatives and many farmers. It’s a collective/cooperative model, all farmers share equally in the wheat board sales, and farmers are not allowed to make their own deals, even though there may be opportunities to get a higher price in certain spot markets, particularly for farmers living in the southern Prariries close to U.S. feedlots and mills. These are the farmers who have been most aggressive in calling for an end to the wheat board monopoly, and the ones the Conservatives have been listening too. Interestingly, Gerry Ritz has clearly stated that there won’t be a farmer vote on the changes, something required in the wheat board legislation. Here are some comments from a Canadian Press report.

“While the law requires a vote when adding or subtracting commodities that the board handles, Ritz says changing the entire Wheat Board Act is at the discretion of Parliament.
Ritz says farmers endorsed an end to the monopoly when they voted in a majority Conservative government in last month’s election.”

Ritz says the the wheat board will live on, but on the same competitive footing as the handful of major grain trading companies that will vastly expand their business.

The Canadian Wheat Board won’t go down without a fight. We can expect a strong campaign against these changes, and very likely a court challenge before the dust settles. This fight won’t have a significant impact on the Maritimes, but symbolically it’s important. Supply management in dairy, poultry and eggs has the same kind of historical resonance in Eastern Canada, as the wheat board does in the west. A collective, highly regulated marketing system that many love, but “free market” types hate. If the Conservatives can pull off the wheat board coup out West, don’t think the free market fire breathers won’t turn their attention on supply management. The fact that supply management in dairy is so important in Quebec would be the only reason it won’t come under the gun.

And sure enough last week the Globe and Mail had a full-scale attack on supply management.  Two things I think  the Globe got wrong.  The international price of milk has gone up dramatically over the last few months, while the price in Canada, which is established domestically,  hasn’t, so the price comparisons are out of date.  And notice how in the  editorial the Globe calls it “dairy subsidies”. In fact it’s just the opposite. The consumer pays the full cost at the supermaket checkout, and that consumer dollar is spread fairly between the farmer, processors, and others in the marketing chain. I know supply management isn’t perfect, but let’s not lose it because well-heeled business writers in Toronto have forgotten why it was established in the first place.

http://www.theglobeandmail.com/news/opinions/opinion/the-tories-massive-contradiction-on-supply-management/article2062286/

The Tories massive contradiction on supply management

June 16, 2011 •

Deadly e-coli outbreaks, like the one in Walkerton, Ontario  are almost always linked to raw manure from cattle. Cattle have complex digestive systems full of various types of bacteria needed to breakdown the high cellulose diet they consume (grass and stored hay). The bacteria don’t affect the cattle or the milk and meat produced, but if raw manure is mis-handled, and gets into drinking water, or onto produce, it can be a serious health risk.

Sprouts have always been a favourite target of public health officials during outbreaks because of the way they’re produced commercially.  Many  use “steam barrels”  creating a warm (38 degree Celsius), moist environment that’s good for germinating sprout seeds, but also a perfect environment for bacteria to grow quickly. The issue then becomes (like the current German situation) were the seeds used for sprouting clean or contaminated? Researchers are now saying the supplier of the bean seed is as likely a source as the farm itself..

It’s now common for even organic producers of sprouts to bleach the seed before forcing it to germinate. The idea is that the bleach does not infiltrate the seed, but any bacteria or salmonella on the seed will be killed.

News reports out of Germany say the farm in question had delivered sprouts to virtually all the restaurants and stores linked to the outbreak, and given that sprouts have been a source of bacterial infections in the United States and elsewhere before, it seemed like a strong link.   Health officials had earlier blamed produce coming from Spain.  North Americans are just beginning to hear about the outbreak, even though the first cases were reported almost a month ago.

Here is a good backgrounder on e-coli.

http://www.healthzone.ca/health/illnessesissues/article/1001965–e-coli-a-friend-that-can-turn-lethal

E. coli, a friend that can turn lethal

June 02, 2011
Joseph Hall

Health Reporter

We are all full of E. coli. Wriggling microscopically by the billions in our bowels, multiple strains of the beneficial bacteria help us to digest food and to ward off illnesses.

But sometime around 1982, likely in the intestines of some western U.S. cattle, a version of the bacteria mutated.

It began to produce a poison – known as a shiga toxin — that could be carried out of the animals in their manure, or saturate the meat they produced.

And for the first time, an E. coli organism, our constant companion though eons of evolution, was labeled as a health threat to humans.

Strains of that pathogenic version have since popped up in intermittent and usually isolated outbreaks around the world, like the one that killed some 18 people in Walkerton 11 years ago.

Now, another mutated E. coli strain is sickening people by the thousands in Germany.

But that E. coli germ, known as o104, is likely using the same mechanism to spread illness that all earlier pathogenic strains of the bacteria utilized, experts say.

“At some point, you had genes that produced toxins being shared between different organisms,” says Dr. Michael Gardam, head of infection control at Toronto’s University Health Network.

Gardam says the original pathogenic E. colis likely picked up a piece of DNA from a toxin producing bacteria known as shigella, a dysentery causing bug that killed off more troops than bullets did during World War 1.

And the new German version has surely done something similar, he says.

“It wouldn’t surprise me if you’ve got one producing a slightly different toxin,” Gardam says. “But I think the concept is exactly the same.”

These shiga-like toxins pose a double threat to humans.

First, they cause bloody and often explosive bouts of diarrhea. And for about 90 per cent of those infected, this unpleasantness will be the extent of it.

But for about 10 per cent, the toxin also attacks the blood’s red cells and platelets, and can lead to lethal conditions like kidney failure, Gardam says.

For these patients, he says, the body’s small blood vessels become inflamed, causing the red, oxygen carrying cells to “blow up” and the cut stemming platelets to run dry.

Shards of these wrecked cells can clog the blood cleansing kidneys, leading to renal failure, Gardam says.

But as in Walkerton, where a manure borne E. coli o157 strain made its way into improperly chlorinated town wells, the German outbreak is likely to be an isolated one.

Unlike viral pandemic pathogens, E. coli bacteria does not hitch rides within incubating airline passengers and jet it’s way around the world, says Tim Sly, a Ryerson University epidemiologist.

“You can be sitting next to someone with this particular disease in the subway, in the office…and you’re not going to get it from them,” Sly says.

The only way the disease can be transmitted, Sly says, is through ingestion, either of undercooked contaminated meat or actual fecal matter, usually lurking on the produce it helped fertilize.

Person to person transmission far more rare and often involves children who do not properly wash after using the washroom, says Marc Ouellette, head of infection and immunity with the Canadian Institutes of Health Research.

Sly does say, however, that a growing world trade in organic vegetables, which are grown exclusively with manure fertilizers, makes the chance that outbreaks could hit multiple regions from a common source more likely.

From:   http://www.fcc-fac.ca/newsletters/en/express/articles/20110520_e.asp#story_1

What’s up with Mother Nature?
by Trudy Kelly Forsythe

Weather reports across the country have been filled with colder than normal temperatures and above average rainfalls. Many communities are watching water levels rise, and in some cases, overflow.

The weather is leaving many producers wondering what impact this weather will have on their livelihoods — and wondering what’s going on with Mother Nature these days.

Drew Lerner, senior agricultural meteorologist of World Weather, Inc., says there are several reasons the weather has been wetter and colder than normal this spring. The biggest influencer, he says, is La Niña, a weather pattern that creates cooler than normal temperatures.

“La Niña caused more snow this winter in Canada,” Lerner says. “This is one of the strongest La Niñas in history.”

As a result, temperatures have been colder than normal in March and April across the Prairies.

“The air source comes out of Alaska and the Northwest Territories,” Lerner explains.

A second influencer has to do with the quasi-persistent high pressure system that exists in the Arctic. The change in intensity of the high pressure system is called Arctic oscillation and its intensity varies greatly, Lerner says.

When this high pressure system is stronger than usual, it’s called the negative phase of Arctic oscillation. Lerner explains that in such situations, the high pressure system forces cold air from the Arctic to the lower latitudes — particularly into the Prairies in December, January and February.

“The negative phase of Arctic oscillation went away for a while in February and March. Now, a new period of similar conditions is back,” Lerner says.

The Arctic oscillator is what Lerner blames for the cooler temperatures in Atlantic Canada as well.

“The Arctic oscillator will be with us for a few weeks, so more cool air is going to be around,” he says. “As the Arctic oscillator relaxes, we will probably see some warm weather across the Prairies. We’re just moving into this now.”

Another influencer is a reoccurring, 18-year weather cycle that started in the 1950s — a decade that was wetter than normal. Lerner says that of the 12 wettest years in the Prairies, five were from the 1950s. That was until last year, when record-setting rainfall took over one of the spots in the top 12.

So as La Niña dissipates, what happens next?

“As current jet streams push south, the Prairies in particular should see more stable weather and less rain,” Lerner says.

When it comes to agriculture and food, the Conservatives promised (much like in every other area) more of the same: export oriented,  more free trade, Canadian farmers who are competitive on a world scale will be successful, those that can’t, will fail. The challenge here in the Maritimes (see earlier posts) is that production costs are higher here, and that “North American” price for livestock and grains (kept lower by those large U.S. subsidies that come in the mailbox to American farmers) makes farming here marginal or money losing.

Just before coming PEI in 1980, I spent time working for CBC radio in Calgary.  I caught a glimpse of what drives the current Conservative party on resource issues, and what makes up Stephen Harper’s mindset.  We have to remember that Stephen Harper (much like George Bush who was born into privilege in the U.S. North-east, but then  re-created himself as hard nosed Texan) made a similar passage.  Harper grew up in Toronto, the son of an accountant with Imperial Oil.  He dropped out of the University of Toronto, and ended up working in the mailroom of Imperial Oil in Calgary, and then decided to go back to school. That’s when he came under the influence of the The University of Calgary’s renowned economics department, and it’s well know head Tom Flannigan.   Flannigan, and the U. of C., are entrenched in free market economics (Milton Friedman,  low taxes, small government, decentralization, property rights, etc. etc.), and Harper  took all that on, and became one of its most skillful promoters.  Now he’s the Prime Minster with a majority government.
(He still looks pretty goofy in a cowboy hat, but, like Bush, has transformed himself, in his own mind anyway, into a  frontiersman).

What will be telling for the Maritimes (and we saw this clearly in December of 2008 when Harper steadfastly refused to take the global financial collapse as a time for Government intervention)  is that he will (in my opinion) diminish the role of ACOA, equalization, transfer payments, and so on, arguing the budget has to be balanced, but there’s more at play. He simply doesn’t believe government has a central role in economic development. It’s not that he’ll refuse, it’s that he doesn’t believe it should happen.  There’s a difference.

When it comes to Agriculture policy and resource issues, Western Canada, and Alberta in particular, has always been tempted by that huge, rich (used to be anyway) market  just south across the border.  That’s why Westerners see export markets as the best way to prosperity, and any government intervention to help Canadian producers in the East that could jeopardize these export markets (through a trade fight)  is to be refused. It’s why  Trudeau’s National Energy Program  which kept oil and gas at a lower domestic price, was so viscerally hated in the West.

There’s one more impression I came away with that’s harder to justify, but I think is very important. Gaining enormous wealth by punching a hole in the ground, collecting and marketing the oil and gas, creates a mindset that anyone can make it if they have enough guts and determination.  In other words there’s no excuse for people not to succeed, and the government shouldn’t coddle those that don’t. I remember arguing with someone in Calgary that it was Peter Lougheed  who guaranteed Imperial Oil a profit if it would start developing  the oil sands. The government never had to pay of course, but surely that’s government intervention in a big way, and takes away from the swagger of the so-called risk takers in the oil industry (we agreed to disagree).

All this means people in the Maritimes are going to have to work harder at finding local solutions to problems, think a little more about their neighbours, and where they spend their consumer dollars (that’s not a bad thing).  Harper will be under tremendous pressure from the business media, his supporters in Alberta, Tom Flannigan, to use these four or five years to show Canadians what a true Conservative government really looks like.  My biggest worry is what’s called the Dutch Disease. Holland gained enormous wealth form North Sea oil, driving up the value of the guilder, and making anyone outside the oil and gas business uncompetitive in export markets. I think Canada will go through the same thing, putting tourism, and the important export markets for food, lumber, and so on at risk. Harper and others will be proud of a “strong, confident Canada” but not all Canadians will feel the joy.

Three stories that tell us a little more not just about who’s wining and losing as food prices go up, but the ability of various parts of the food industry to adjust. The fallout from 9-11 (still with us even though Bin Laden has been dispatched) ramped up production of biofuels in the United States, and the heavy subsidies continue to enrich corn and soybean producers there.  This in turn has increased the price of livestock feed. When that’s combined with drought  in western U.S. ranching country, the U.S. beef herd is at its lowest numbers in decades, so prices have reached record levels.  Canadian farmers will see some benefits too (Western Canadian farmers in particular where grain and livestock prevail, with much easier access to the U.S. markets) but as one PEI beef producer told me when I suggested  things must be getting better, he said while cattle prices are back to where they were six years ago when mad-cow was first discovered,  the cost of everything from fertilizer to farm equipment is much higher. Throw in hundreds of thousands of dollars of loans used to survive through the lean years, and the picture while better, still isn’t good. I was going to argue that farmers just never seem to be happy, but I realized he was right.

Consumers will see the fallout by paying a little more money, but also getting a little bit less in the box or bag.  Food retailers and processors have so much invested in providing “the lowest price”, that they’re cleverly trying to protect their bottom line in a different way.

From: http://www.theglobeandmail.com/report-on-business/grocers-scramble-to-offset-higher-food-fuel-costs/article2006101/

Grocers scramble to offset higher food, fuel costs
by MARINA STRAUSS — RETAILING REPORTER  •  May 2, 2011 •

Call it the incredible shrinking package. Loblaw Cos. Ltd. (L-T139.880.521.32%) recently scaled back to 750 grams from 800 grams the amount of cereal in a box of one of its President’s Choice granolas, but has also raised the price to $5.79 from $4.99 since last year.

Loblaw is far from alone in downsizing packages and upsizing prices. It is a common practice in the grocery industry, underscoring how supermarkets today are racing to find ways to ease the pain of higher food and fuel costs while shoring up profit margins.

After having prospered last year from a strong loonie despite food deflation and escalating competition, grocers are preparing for an era of food inflation.

Even as profit margins improve – helped by a rising Canadian dollar that lowers many purchasing expenses – Loblaw and its rivals are struggling to make sales gains in a the cutthroat environment that has seen discounter Wal-Mart Canada Corp. rapidly expand into food. On Wednesday, when Loblaw reports its first-quarter results, the country’s largest grocer is expected to shed more light on how it’s grappling with limited growth opportunity in the food aisles in a period of soaring costs.

While moderate inflation is an ally to the food retailer, price increases of more than 2 to 3 per cent can spell trouble, Loblaw president Allan Leighton has warned. Recession-shaken consumers are sensitive to dramatic price hikes, and simply switch to cheaper alternatives rather than shell out more.

When prices jump beyond 2 to 3 per cent “then it really starts to whack the market,” Mr. Leighton said in February. “I’d rather be in a place of deflation than a place of high inflation.”

In March, the tab for food bought in stores jumped 3.7 per cent, marking the biggest year-over-year increase in 19 months, according to Statistics Canada. Surges in global commodity prices, spiralling fuel prices and bad weather in the southern U.S. are continuing to drive up prices. And higher rates at the gas pump threaten to curb consumer spending.

Grocers have reported lower prices than Statscan because their customers trade down, opting for cheaper alternatives than the items included in the federal agency’s sample of groceries. But the retailers acknowledge that they’re starting to raise prices. Already this year, Loblaw hiked prices of vegetables, fruits and meats. Other price adjustments are more subtle, such as shrinking packages or launching new products.

In the case of its PC Blue Menu Raisin & Almond granola, Loblaw last week was still touting an 800 gram box on its website even though its stores carried a shrunken 750-gram package – 6 per cent smaller but almost 16 per cent more expensive than last year at its conventional supermarkets.

At the same time, the retailer stocks a new Blue Menu almond-vanilla Omega-3 granola in the same size box as the raisin-and-almond version but with just 600 grams of cereal – at the same $5.79 price.

In response to a cautious consumer, grocers try to camouflage price increases by downsizing packaging, rolling out new products or adding healthy-for-you components to justify higher rates, said Michael Mulvey, marketing professor at the University of Ottawa Telfer School of Management.

Consumers often don’t readily notice a different package or content size, Prof. Mulvey said. “So potato chips all of a sudden contain 15 per cent less chips but the bag won’t change much, in terms of its size.”

And grocers can get away with higher prices if they’re providing a more convenient or healthy product, he said. He cited the example of Pepperidge Farm’s Goldfish cheddar snacks which, at Loblaw, cost $3.29 for both a 200-gram and a 168-gram package. Because the latter consists of six 28-gram snack packs, “they’re providing consumer value, in the sense that it’s more portable, easier to pack,” he said. “It is a very effective way of selling less food for the same price and helping the bottom line.”

Another grocer strategy to deflect attention from inflation is running “last-blast” promotions before jacking up prices, retail analyst Perry Caicco at CIBC World Markets said in a recent report. Or, as Loblaw did when it unveiled its new almond-vanilla granola, the retailer initially featured it at a lower price of $3.49 before raising it to its current $5.79.

And as grocers focus on dealing with spiralling food costs, they feel strains on another front: higher prices at the pump. In a report in March, market researcher Nielsen Co. predicted that the double whammy of rising gas and commodity prices will prompt consumers to follow historic patterns: make fewer trips to the grocer, eat out less, switch to cheaper shopping alternatives and use more coupons.

“The impact on household budgets can be significant,” it said. A 10-cent-a-litre increase in gas prices slices consumer spending by $30 a month, while a 50-cent hike translates into a $124 monthly cut.

Still, higher gas prices can have a silver lining for grocers, Prof. Mulvey said. Consumers stay home more, rather than dine out or travel, forcing them to buy more groceries because they still have to eat.

http://www.farmmarketer.com/home/news/?storyid=3230

Recession-free agriculture

April 29, 2011
By DAVID MERCER

Since 2007, much of the American economy has stumbled through a difficult period, but agriculture-related firms have enjoyed four profitable years thanks to heavy demand for corn and other crops.

A new index of 21 agriculture-related companies, called Agindex, shows their market value increased 8.6 percent a year from the beginning of 2007 through the end of March 2011. During that same period the value of companies in the S&P 500 dropped on average 2.7 percent per year.

The Agindex includes household names such as equipment-maker Deere & Company and seed-and-chemical firm Monsanto along with lesser-known companies such as fertilizer producer Agrium.

Gary Schnitkey, a University of Illinois agricultural economist, created the index with graduate student Clay Kramer to measure the strength of the agricultural sector. What they found was evidence of the strength of the rural economy the past few years, when crop prices sheltered farm country from much of the worst of the recession.

“Farmers are buying equipment and everything so it does filter out into the general rural sector,” Schnitkey said. “The rural economy did fare pretty well.”

Even with uncertainties about whether the government will reduce or eliminate programs that subsidize ethanol producers and growers of corn, soybeans and other commodities, Schnitkey said it’s doubtful his index or the farm economy could decline any time soon.

“You’re going to see pretty high (farmer) incomes for this year and probably next year,” he said. “It’s hard to see a situation where that moderates a lot.”

Prices for corn, soybeans and other crops have soared for several reasons, including a surge in overseas purchases from developing economies in China and India as well as continued demand from U.S. livestock and ethanol producers.

The demand has caused stockpiles to decline and in part been to blame for increased food prices.

As farmers have earned more in recent years, they have bought new tractors, combines and other equipment from companies such as John Deere and Kubota Tractor Corp.

The equipment makers in the index saw their market value increase a total of 51 percent.

Higher prices, coupled with plentiful crops in recent years, have enabled farmers such as Leon Corzine of Assumption, Ill., to buy new equipment. Corzine bought two new tractors last year for use on his 3,000 acres of corn and soybeans.

“You’re talking about getting upwards of 250,000 or 300,000 dollars apiece,” he said.

But the sector that’s had the best four-year run, Schnitkey found, is fertilizer makers such as Agrium, based in Calgary, Canada, and Potash Corp. of Saskatchewan, based in Saskatoon, Canada. Those companies’ market values more than doubled.

Most Americans probably have never heard of the fertilizer makers, but the demand for more corn and soybeans has allowed the companies to put a premium on their products.

Not every company on the index did so well. The index’s processors, which had to pay high prices for corn, soybeans and other crops, actually lost 4 percent of their value. Those companies include Archer Daniels Midland Company, Bunge Limited and Corn Products International.

Schnitkey noted that most of those companies had very strong first quarters this year.

Despite concerns about reductions in government subsidies for ethanol and some crops, Morningstar analyst Jeffrey Stafford expects the current trend to continue. Farmers can’t keep up with the demand for corn, for instance, meaning that stockpiles will remain low.

“It could take multiple growing seasons to return those stocks-to-use levels to kind of a more sustainable average,” he said. “You could see elevated crop prices remain for quite some time.”

http://www.farmmarketer.com/home/news/?storyid=3217

Beef prices at all-time high

April 25, 2011
Source: Reed Fujii

They say happy cows come from California. With all-time record beef prices and plentiful pastures these days, happy cowboys also come from California and other U.S. cattle-raising regions.

“I can’t call and complain about anything,” said Darrell Sweet, a Livermore cattle rancher and past president of the California Cattlemen’s Association.

That’s quite a change as the industry has emerged from California’s three-year drought and a period of depressed beef prices as costs for grains and other feed soared.

As recently as June 2009, beef cattle being sold for slaughter went for an average 82 cents a pound live weight, the U.S. Economic Research Service reported. In March, the average was rose to nearly $1.16 a pound, a jump of more than 40 percent in less than two years.

Both gross farm and retail beef prices set records in February and then again in March, not accounting for inflation. The agency reported the average retail price of fresh beef was nearly $4.35 a pound in February and ticked up to $4.48 a pound last month.
Backing off buying

The high prices are affecting beef buyers. Consumers are seeking cheaper grades and cuts of beef. Restaurants are watching their profits shrink or must raise their prices even while the economy remains weak. Fast-food giant McDonald’s Corp. announced Thursday it planned small price increases as the price of beef rises.

Still, it’s a boon for cattle producers.

“Prices are good. They’ve never been this good before,” said Duane Martin Jr., a Galt-based rancher and past president of the San Joaquin-Stanislaus Cattlemen’s Association. “This year, we’ll make big profits.”

He attributed the rise to short supply of beef, as the drought in California and other areas of the nation and low market prices compelled ranchers to sell off their herds. Export demand for U.S. beef is also strong, and there may be a bit of a price bubble in commodity markets.

Martin said the gain is not pure profit, as production costs are also increasing. He said fuel and transportation costs may jump by one-third this year.

“When you’re talking about shipping cattle 1,200 miles to Colorado, it adds up pretty fast,” he said.

Feed and grain prices, as well as pasture rents, are also rising. And Martin, who has 30 employees in his operation, worries about labor costs, including health care coverage.

“Over the next few years, I expect a big percentage of it to get eaten up,” he said. “If not, the prices of cattle falling back, because, like I said, I think they’re overinflated.”

Daniel Sumner, director of the Agricultural Issues Center at the University of California, Davis, said the primary price driver is the short beef supply.

“One of the things that happened a few years ago: We had these incredibly high grain prices, and beef prices didn’t go up, so that meant guys were selling,” he said.

“This isn’t that you and I and everybody else make so much money we eat steak everyday,” Sumner said. “The economy has come back a little bit, but it’s not a strong economy.”

And it’s not that easy to increase beef production. Ranchers need to build up the number of heifers – young cows – to do so.

“Cattle make cattle; the only way you make marketable animals is to have breeding stock,” Sumner said.

To do so, however, will further reduce beef supplies in the short run as heifers are held off the market.
Ranchers get more

Sweet said he’s seen heifers selling for about $1,900 apiece, roughly twice what they might have brought during the drought, when ranchers were reducing their herds.

He also said foreign demand is also contributing to higher prices.

“The export market is what is really driving this thing,” Sweet said. “The export market and the fact that we have a continuing decline in beef cattle numbers.”

The U.S. Meat Export Federation, a trade group promoting beef, pork and lamb, recently reported there was strong growth of U.S. beef shipments in the first two months of the year.

Beef exports in that period were 179,460 metric tons valued at $727.3 million, representing gains of 24 percent in volume and 45 percent in price from the same period a year ago. Mexico, South Korea, Canada, the Middle East and Japan are the top five export markets.

Officials at Save Mart Supermarkets said they hadn’t received any surge in complaints about meat pricing, but consumers are picking lower-priced cuts.

“A developing trend is the increased popularity in short ribs, stew meat and thin cuts like stir fry strips or carné asada, which are economical and very quick and easy to prepare,” said Marty Stephanic, Save Mart’s meat director.

All sorts of economic factors play into consumer buying decisions, said Dave Heylen, vice president of the California Grocers Association.

“With the recession we’ve gone through or are in, we saw considerable change in consumer buying habits in all areas, not just meats,” he said.

“Any time there are increases in prices, it’s going to impact how consumers purchase,” Heylen said. “So sure, it’ll have an impact. How much, I can’t say.”

At the El Rancho Inn-Steak & Lobster House in Stockton, rising costs have hit the bottom line, owner Ray Lecondeguy said.

“I’ve absorbed everything for the last year or so on beef,” he said. He quickly added, “What’s even worse is the record lobster prices. I’m paying $44.50 per pound.”
Plate prices rising

That’s forced him to raise the price for a lobster dinner, but he’s holding steady on his rib eye and New York steaks.

“Everything is going up. Everything that’s related to agriculture is going up,” Lecondeguy said.

Martin thinks the beef market will remain strong for the next several years.

“I’ve been growing my herd at a rapid pace, and this year I expanded it 40 percent,” he said.

He’s purchased a few thousand head of cattle being pastured in Wyoming and Colorado and added staff to manage the expansion.

Still, he admits being a bit surprised by the gains.

“I was very bullish on the cattle industry; just not to this degree,” Martin said

The Greens have put a real definition to the notion of local food: “the 200 km diet.”  Maritime farmers might want to see something a little bigger (a day’s truck ride for example, getting into Central Canada and  the U.S. East Coast), but it’s in the food retailing and regulation area that there are some interesting ideas.

From:  http://greenparty.ca/files/attachments/vision_green_2011en_0.pdf

“Reduce Corporate Control of the Food supply by:
• Reforming agriculture regulations to challenge corporate concentration.
• Ensuring that farm support payments are farm-based (not production-based) to encourage
more farms and more farmers.
• Encouraging organic farming methods to improve farm profitability and sustainability.
Supports Local Food markets by:
• Enabling local areas without industrial-scale agriculture to develop area-specific food
safety regulations meeting national standards without placing undue financial burdens on
local farmers and food processors.
• Encouraging and supporting the consumption of locally-grown food by promoting
adequate shelf space in grocery chains for products from local farms and local food
processors.”

This last one has always interested me. IF the big retailers had a row or two dedicated to local production, and, let’s go one step further, at fair trade prices (ie. profitable), what’s the worst that could happen. Shoppers would at least have a choice, and not have to deal with some cranky meat manager when you ask where the local beef is.  And if it became clear that the cheaper imported stuff was still flying off the shelves, while local production lingered, then farmers and politicians would have to face up to that.  This would have to come with a serious effort to encourage people to see the links between profitable primary industries, food safety and security, and a provincial economy now wholly dependent on transfer payments.  If the quality and value isn’t there, then that would have to be improved. .

I’m hopeful it would be successful.  I remember when Maritime Electric offered customers the chance to pay more for power and support expansion of green energy production. Many in Maritime Electric thought this would fail, that customers were only interested in the cheapest price. To everyone’s surprise, this program was quickly over subscribed.   And ask yourself if fifteen years ago you’d have predicted  that you’d pay two hundred dollars a year, and clean out peanut butter jars, to support the Waste Watch program. It shut down dozens of dumps, and close to 70% of PEI’s garbage is composted or recycled. The system isn’t perfect, but most Islanders feel pretty good about it, and enjoy the confusion of visitors to those 3 waste bins.

The big retail chains use “local” as a marketing tool (think of Galen Weston Jr. walking fields with farmers), but on the shelves itself it’s a different story. Next time you’ve shopped in a big chain store, notice the number of products that are “private label”, President’s Choice, or Compliments for example, and ask yourself if you have any idea where these products came from. From a marketers point of view this is magic, source the product where you can get it the cheapest, give it a label shoppers respect (after years of branding),  and play on the idea of providing good value. Engaged consumers should know more about what they’re buying and feeding their families.

The other interesting proposal is tailoring food safety regulations to the industries and regions they’re watching over, make them more “local” too. Certainly on PEI the image of heavy handed “health” officials coming down on small backyard egg producers is doing nothing but irritate thoughtful consumers and give PEI an international black eye. “PEI: Home of genetically engineered fish, and rules against free-range laying hens”, that’s what we want people thinking about the province.  I remember years ago when E.coli  O157:H7  (the deadly stuff) was found in a sample of Charlottetown’s water supply (it came from a little used well in the middle of a park in Charlottetown). The province’s chief health officer said he was monitoring hospitals for signs that sick, dehydrated people were coming into emergency as a benchmark for how serious this discovery was.  Luckily it wasn’t serious, the lines were flushed, the offending well capped off and never used again. Maybe some of the same common sense to monitoring a “serious potential health risk” (as the health officials like to say about these eggs) could be used. Yes the lawyers want to limit any potential liability of someone getting sick in the future, but let’s regard these few producers, and the care they take, as innocent until proven guilty.  The people who buy these eggs know  much more about who they’re buying from, and why they’re doing it, than most consumers. Let’s show them some respect too.

Food safety regulators have a big job to do. Large food processing plants have the potential to harm many more people than small operations, and it’s one of  the reasons the rules are so cumbersome. As well the huge increase in imported foods is a logistical nightmare to try to get any kind of statistical basis for saying its safe. So lets put time and resources into the food safety issues that do offer some very real risk, and use common sense elsewhere.