Index
Revisions Of CAIS Reference Margins
It appears many producers received their original DON form and, subsequently, a revised DON form in which their reference margin was sometimes sharply lower, especially those with custom farming income and/or expenses. It seems that virtually all revisions were negative revisions resulting in smaller reference margins. On the positive side, the Ontario Ministry of Agriculture & Food (OMAF) explains that this correction, in effect reduces the amount of money required as a deposit into individual CAIS program accounts. On the negative side, a smaller reference margin means the CAIS program will provide significantly less support than these producers had expected it would, prior to the revision. When producers phone for an explanation, OMAF says they originally incorrectly calculated the percentage of income from custom operations to be attributed as allowable income used for calculating the reference margin. Such a mistake, although perhaps understandable in the rush to get DON's to participants in time for the original April 30 deadline, undermines producer confidence in the new CAIS program and administration.Making Adjustments To CAIS Reference Margins
Producers are also reporting other concerns about the calculation of their individual reference margins. When they contact OMAF, they are informed that the CAIS program will provide an opportunity for producers to adjust the production margins provided on their DON when a payment is triggered. Adjustments will be permitted "for income and/or expense amounts that were not included on the appropriate line for either NISA or OFIDE" The OMAF website also says that the CAIS program will provide an opportunity for producers that have historically filed their farm income tax statement on the cash basis, to make an accrual adjustment to their CAIS reference margin. This adjustment will be a one-time choice. Once the choice has been made, the producer's reference margin in all subsequent years will include an accrual adjustment. Producers who have filed to NISA on an accrual basis and tax on a cash basis will have their reference margin calculated on an accrual basis. Producers who have filed an accrual financial statement to the CRA and then converted to the cash basis for tax, will have their reference margin calculated on an accrual basis. Producer input into an annual review of the CAIS program was promised when Ontario signed the bi-lateral APF Implementation Agreement in December 2003. To prepare for this review, OCPA members are asked to document problems they encounter with the CAIS program, as well as problems they perceive they will encounter in the future, given the current structure of the program. OCPA members are asked to also document suggestions for correcting these problems and for enhancing the CAIS program. Please forward all documented problems and suggestions for change to OCPA headquarters in Guelph. OCPA participates on the Ontario Agricultural Commodity Council's Safety Net Technical Committee which is marshalling input for the first annual CAIS review expected this December.New Deputy Minister Of Agriculture & Agri-Food Canada
On April 8, the Prime Minister announced that Mr. Samy Watson, the current Deputy Minister of Agriculture & Agri-Food Canada, will move to become Deputy Minister of Environment effective May 10. Mr. Watson is widely regarded as the architect of the Agricultural Policy Framework (APF). The PM also announced that Mr. Leonard Edwards, currently Deputy Minister of International Trade, will become Deputy Minister of AAFC effective May 10. Mr. Edwards has spent his entire career in the Department of Foreign Affairs and International Trade. Mr. Edwards may have a better feel for the long-standing "trade injury" issue of the Canadian grain and oilseed sector, an issue ignored by the APEU.S. To Continue Canadian Live Hog Import Investigation
On April 8, the U.S. Department of Commerce announced that the U.S. International Trade Commission will investigate U.S. hog industry complaints against Canadian live hog imports, as being unfairly subsidized. The U.S. ITC is scheduled to issue a preliminary finding May 3 as to whether the U.S. hog industry has been injured by "subsidized" Canadian live hog imports, or has been threatened with injury from such imports. If the U.S. ITC finds that injury has, or could exist, the U.S. Commerce Department would then make a preliminary ruling on countervailing duties on June 11 and would make a preliminary ruling on anti-dumping duties on August 25.Canada joins U.S. WTO Suit Against Mexican Sugar Taxes
considerable pressure from the Grain Growers of Canada, Casco, and the OCPA, in late March, the federal Department of Foreign Affairs and International Trade reluctantly decided to join the U.S. WTO complaint against Mexican sugar taxes. However, Canada only joined as an "observer", not as a full participant. Mexico imposed a 20% sales tax and a 20% distribution tax on sweetened beverages that do not contain cane sugar. The taxes are aimed squarely at High Fructose Corn Syrup (HFCS) sweetener imports from the U.S., but Canada is directly affected as well. Because of the dramatic restriction on U.S. HFCS exports caused by the Mexican taxes, the North American beverage market is awash with HFCS, a situation that has impacted Casco in Ontario directly. North American HFCS margins have shrunk causing postponement of expansion plans and, in some cases, in the U.S., reduction in corn grind. Trade practices that discriminate against processed corn products (HFCS here, live hogs as in the item above) are every bit as injurious to Ontario corn producers as are practices (such as U.S. Farm Bill subsidies) aimed at the raw corn kernel directly. A deal resolving the standoff over Mexican access to the U.S. sugar market and U.S. access to the Mexican HFCS market appears in the works, but no details have been announced yet. The WTO complaint is likely a further prod.Brazilian Ethanol Imported Into The U.S.
A sign of things to come? In early April, two tanker ships off-loaded 16 million gallons (60 million litres, or almost one half of the annual production of Commercial Alcohols' Chatham, Ontario ethanol plant) of Brazilian ethanol in New York harbour. Brazil is the world's largest producer of ethanol (4 billion gallons annually vs U.S. 2.9 billion gallons) and has been aggressively seeking to export ethanol into the U.S. Brazil has been lobbying hard against the U.S. $0.052/gallon effective barrier on imported Brazilian ethanol, but to no avail, thus far. U.S. ethanol production has been expanding at 32% per year and has almost doubled since 1999. With 79 plants in production and 15 more under construction, U.S. ethanol production sets new records every month and will likely exceed 3.5 billion gallons in 2004, grinding 1 billion bushels of corn. But localized shortages can occur, especially in the northeast which traditionally has been partially supplied with gasoline imported from the E.U. However, E.U. gasoline is not reformulated to permit ethanol blending (because of the small volume involved) and will become less of a factor in northeast U.S. markets. As ethanol market share expands in the northeast, ethanol imports will expand whether from the central U.S., Ontario, or Brazil.
U.S. Energy Bill Still Stalled
Phase 2 Of Canadian Ethanol Expansion Program
Chris Johnstone, head of Natural Resources Canada's Ethanol Expansion Program (EEP) said recently that Phase 2 of the Federal government's $100 million EEP, could begin accepting proposals for assistance as early as May or as late as September. No definite timetable has been set. Nor apparently has the size of Phase 2. Originally, the $100 million was to be distributed as $60 million in Phase 1 in 2003, and $40 million in Phase 2 in 2005. However, $78 million was distributed in announcements in February of 2004, leaving only $22 million. Now Mr. Johnstone says that Phase 2 could distribute $22 million "or more" depending on whether all recipients from the first round of funding meet all preconditions.Lycopene and Carotenoids From Corn Ethanol DDGs
The USDA's Agricultural Research Service recently developed a process to mass-produce lycopene from ethanol co-products, such as corn fibre and distillers dried grain with solubles (DDGs). Lycopene, a pigment that makes tomatoes red, is a carotenoid with "nutraceutical" health benefits. Research suggests lycopene helps prevent certain cancers. Currently, lycopene is extracted and purified from tomatoes, an expensive process. The USDA ARS modified the fungus Fusarium sporotrichioides with genes for making lycopene and other carotenoids. The modified fungus produced lycopene from corn fibre and DDGs at a lab-scale rate of 0.5 milligram of lycopene per gram of dry weight within six days.New Federal Agriculture Research Funding Program
In early April, Agriculture and Agri-Food Canada (AAFC) announced a new 5-year $255 million program to succeed the Canadian Adaptation and Rural Development (CARD) fund. The new Advancing Canadian Agriculture and Agri-Food (ACAAF) program is likely to direct about $7 million annually to Ontario (which is actually about the same as under the CARD program). The framework of the ACAAF is based on a three-pillar approach:Bayer CropScience To Purchase Gustafson Seed Treatment Business
On March 22, 2004, Bayer CropScience LP U.S. and Bayer CropScience Inc. in Canada agreed to purchase 50 percent of the Gustafson seed treatment business (currently held by Crompton Corporation) in the United States, Canada and Mexico for a purchase price of US$124 million. This would give Bayer, who currently holds a 50 percent share in the U.S. and Canadian Gustafson business, full ownership of the North American business. The transaction is expected to close by the end of the first quarter, subject to closing conditions. Gustafson is in charge of manufacturing and marketing seed treatment products. The company employs approximately 250 people in the North American region and is based out of Calgary, Canada and Texas. Gustafson sales were approximately US$130 million in 2003. This acquisition gives Bayer the benefit of the full range of Gustafson's products, including some products from third parties. Crompton, on the other hand, will continue to participate in the global seed treatment business. In the North American region, the company will supply seed treatment products through the Bayer - Gustafson business. Crompton's seed treatment business outside of North America will be unaffected by the transaction. This sale is part of a Crompton strategy to reduce ongoing debt within the company. Gustafson is responsible for seed treatments such as Poncho 600 and Gaucho 480 FL.
Two New Tank-Mixes Accepted For Registration With Option Corn Herbicide
Corn growers in Ontario and Quebec now have two more tank mix choices. They are Option + Distinct and Option + Partner + Atrazine. Both of these new tank mixes have been accepted for registration and will be available for growers to use this spring. Option is a new post-emergence, broad-spectrum corn herbicide that was first introduced in 2003. At that time, it had five tank-mix partners on its label. Option delivers crop safety and weed control in one product from the one to eight leaf stage of corn. Tank-mixing with a broadleaf partner now delivers complete grassy and broadleaf weed control, and allows farmers to tailor a weed control program to best suit the weed pressure and conditions on their farm. Option + Distinct provides excellent grassy and broadleaf weed control from the two to six leaf stage of corn. This tank mix also provides residual control of broadleaf weeds and leaves rotation options open for the following year. Option + Partner + Atrazine provides great weed control from the four to eight leaf stage of corn. This tank-mix is an excellent choice for later staged broad-spectrum weed control, due to the quick burndown of partner and the residual control of atrazine. To prevent Group 2 resistant weeds, Option should always be applied in combination with an approved tank-mix partner.
Canadian Farmland Values Continue To Rise
A relatively poor farm economy did not prevent the average value of farmland across Canada from recording a modest increase during the last half of 2003. According to Farm Credit Canada's farmland values report, values across the country rose by an average of 1.5 percent. That compares with the rise of 2.3 percent during the first half of the year, and a 2.6 percent rise during the same six months last year. Ontario showed the strongest increase at 3.3 percent. This rise in Canadian farmland values from July 1st to January 1st 2004 marks the eighth consecutive overall six-month increase. The complete farmland values publication is available at http://www.fcc-fac.ca/en/Products/Property/propertye.asp.
Seed Concerns Donate Data On Corn Gene
It was announced on March 17, 2004, that the U.S.'s two leading seed companies agreed to make a vast amount of information about corn genes available to the government and academic scientists. This is an effort that is said, will greatly accelerate improvements to one of the nation's most important crops. The story also indicates that this move by Monsanto and Pioneer Hybrid International is partly aimed at persuading the government to undertake what could be a complex and expensive project; to determine the entire DNA sequence of corn. If this project is successful, it could be something that would aid in efforts to develop higher yields, resistance to drought and development of other desirable traits. The technology is said to exist to sequence for corn genome very rapidly. It is more a matter of consolidating all efforts together. The donation of the data was arranged in part by the National Corn Growers Association. They are also pushing for a project to sequence the corn genome. Academic scientists were on side with the decision, commenting that the amount of corn gene sequences that will be put into the public domain by the companies, vastly exceeds the amount that is currently available.Corn Plants Alert Neighbours, Seek Help Against Pests
According to published findings from the USDA and university scientists (Pennsylvania State University and University of Florida), corn plants that are being attacked by insect pests use chemical signals, not only to interact with beneficial insects, but to also stimulate early defense responses in nearby plants. Their results demonstrated the first proof of plant to plant warning signals in corn plants. The warning signals are chemical compounds called green leafy volatiles (GLV). Once the corn plants come under attack, they respond by sending these volatiles into the air to attract the pest's natural enemies. The volatiles smell much like cut grass and attract caterpillar predators and parasitoids. When researchers exposed undamaged corn seedlings to GLV, from damaged plants, the plants chemical defenses increased. An even stronger defense reaction was triggered when seedlings were exposed to the volatiles, purposely damaged and then treated with a caterpillar substance to imitate insect attack. Plants used as the experimental control were damaged but never exposed to GLV. Since they did not react as strongly, this would suggest that the volatile signals help prepare the plants defensive reaction. Different night-time volatiles also stimulated a defensive reaction in neighboring plants. Plants that were sensitized to GLV first and then damaged, however, never exposed to the caterpillar substance did not react as strongly as they would have if they had been exposed to the caterpillar substance.
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