Index
Accuracy of USDA Crop Production Forecasts
Drs. Darrel Good and Scott Irwin, University of Illinois, released a report 'Understanding USDA Corn and Soybean Production Forecasts". The report concludes that with the exception of August corn crop production data and August and September soybean output data, USDA crop production forecasts are more accurate than those of private crop forecasters. Over the period 1970-2002, USDA corn production forecasts are more accurate more often than private forecasters with the exception of the August forecasts since the mid-1980's. The report also found that USDA corn production forecasts have the largest impact on corn futures prices in August, but that recent price reactions have been larger than historical reactions.E.U. Lowers Cereal Land Set-Aside
The E.U. is proposing to reduce the land set-aside ratio for the 2004/05 crop year in order to increase E.U. cereal production by 7 million metric tonnes (mmt). The mandatory set-aside of 10% of arable land in order to qualify for E.U. subsidies will be reduced to only 5% because of the severe drought experienced in the summer of 2003. E.U. grain production has been sharply reduced by drought with soft wheat production down 11.8% at 82.87 mmt, corn down 21.1% at 30.5 mmt, and barley down 4% at 45.9 mmt.
Chinese Corn Stocks-To-Use Ratio Continues To Drop
Recent USDA statistics suggest the Chinese corn stocks-to-use ratio has continued to slide lower since peaking at 85% in 1998/99. This meant that in 1998/99, there was enough corn left over at the end of the crop marketing year to cover 85% of the demand for the next crop year. However, by 2002/03 data suggest corn stocks-to-use ratio had fallen to 30%, with 2003/04 projected at 18%, and 2004/05 projected at only 12%. The USDA suggests Chinese corn stocks have been cut back significantly as their production flattened out in 2003 while domestic demand increased. If the USDA is correct, China may have to put the brakes on their aggressive corn exports. This could be long-term supportive for corn pricing in Chicago futures markets.Chairman Leaves WTO Agriculture Negotiations
On November 6, Stuart Harbinson, Chief of Staff to the World Trade Organization and Chairman of the WTO's agriculture negotiations, announced he was stepping down as the head of the agriculture talks after 18 months. The Doha Round of WTO talks ground to a screeching halt following the break-down in negotiations at the Cancun, Mexico discussions in September. Harbinson had tried mightily to bridge the gap between the conflicting positions (especially on agricultural trade, export subsidies, and trade distorting domestic agricultural support) held by the U.S., the E.U., and the newly structured grouping of developing nations headed by Brazil, India, and China. When meaningful reform in agricultural trade and subsidization proved too elusive, Harbinson decided to step aside saying, "we are now entering a new phase in the agriculture negotiations and I think a new chairperson may be better able to bring the fresh perspective which we now need."U.S., Mexico, and Canada Reach Agreement on Biosafety Protocol
On September 5, 2003, the Pest Management Regulatory Agency (PMRA) issued Regulatory Notice REG2003-09 providing temporary registration for Prairie Gold 60% Corn Gluten Meal (as the active ingredient) and associated end-use product TurfMaize (manufactured by The Environmental Factor Inc.), for use as a biopesticide on established residential lawns where the predominant grass is Kentucky bluegrass. No data was submitted to demonstrate the tolerance of other grass species, such as fine fescues, bent grasses and rye grasses, which may be found in established residential lawns in Canada. Corn gluten meal (60% protein) has been sold in Canada as a natural fertilizer for the past 5 years, and has been registered as a pre-emergent herbicide in the U.S. by the EPA since 1994 (Reg #56872-1 and USEPA EST 566872-IN-l). This PMRA Notice temporarily registers TurfMaize, containing 98% corn gluten meal and 2% soybean oil, as a pre-emergence weed seed germination inhibitor and slow-release organic fertilizer which may inhibit dandelion and smooth crabgrass seed germination on residential landscapes. The label recommends two applications of TurfMaize per year: an early spring application before weed seed germination at a rate of 9.7 kg/100 sq meters; a fall application, in late August until October 31, is recommended at a rate of 9.7 kg/100 sq meters.Reducing Environmental Impact of Road Salts
On September 22, Environment Canada released a proposed Code of Practice for the Environmental Management of Road Salts. The public comment period ends November 19, 2003 and Environment Canada will publish the final Code in 2004. The objective is to reduce harm to the environment caused by road salts while maintaining road safety. The Code incorporates flexibility, permitting road authorities using more than 500 tonnes of road salt in a winter season to develop salt management plans reflective of their own particular economic, environmental, and meteorological conditions. Five million tonnes of road salts are used annually in Canada causing significant damage to vegetation with runoff causing harm to aquatic life, birds, plants and animals. All chloride ions from road salts eventually find their way into waterways, whether by direct runoff into surface water or by moving through the soil and groundwater. The issue is significant to corn producers for two reasons. First, because the flexibility incorporated into the Code should encourage expanded usage of Calcium Magnesium Acetate (CMA) and other more environmentally benign deicers as replacements for common road salt. CMA can be made from corn starch. Secondly, an environmentally safe and cost competitive road deicer and sand encapsulant has been developed by Producers Renewable Products, LLC, North Oaks, Minnesota, in collaboration with South Dakota State University, Minnesota Department of Transportation, and corn ethanol producer Corn Plus. Trials demonstrated that increased concentrations of condensed corn distillers solubles dramatically decreased corrosion from road salt, and that corrosion was largely eliminated if the deicing solution contained equal weights of salt and corn stillage from the dry milling ethanol process. The solubility, viscosity, and low temperature freezing point of stillage were improved by the addition of salt. A mixture containing 15% condensed corn distillers solubles, 10.5% NaCl, and 4.5% CaC12 was found to be cost competitive with NaCl when consideration was given for the better deicing properties and minimal corrosivity. Hydrogen is widely regarded, even by Canada's energy planners, as the fuel of the future transforming the world economy from one based on petroleum to one based on plants. But the stumbling block has always been the cost of producing hydrogen for use in fuel cells. Ethanol is a prime candidate source (cheap, easily transported, storable) for the "on-the-go" production of hydrogen for catalytic conversion into electricity in automotive hydrogen fuel cells. But the cost of producing that hydrogen was prohibitive. Now, researchers at the University of Wisconsin Madison have discovered a nickel/tin catalyst to replace the precious metal platinum, in a process to make hydrogen inexpensively from glucose (made from corn starch) without producing large amounts of byproducts such as methane, methanol or ethylene glycol. Hydrogenation of glucose to the sugar alcohol sorbitol, allows the hydrogen from glucose to be extracted more efficiently. The process operates in a liquid phase at low reaction temperatures, is environmentally sustainable and generates no increase in greenhouse gas emissions while producing hydrogen. Because the hydrogen is made without vaporizing water, the process also represents a major energy savings. This process development supports OCPAs vision that corn-based fuels (ethanol and hydrogen) have an enormous potential as hydrogen fuel cells to replace petroleum-fired internal combustion engines.
New Executive Director for BIOCAP
Maple Leaf Foods buys Schneiders
In late September, Maple Leaf Foods Inc. of Toronto announced it had reached an agreement with Smithfield Foods Inc. to purchase Schneider Corporation of Kitchener, Ontario for US$378 million and the assumption of Schneiders' outstanding debt. With the acquisition, Maple Leaf Foods becomes the sole national packer and a leading food processor in Ontario, Manitoba, Saskatchewan, while in Alberta facing competition only from Olymel (a Quebec-based packer). Now, with essentially only one major meat packer remaining in much of Canada, the competitive environment for livestock sales can be questioned. That's an important question for corn producers too because almost 80% of all corn produced moves through livestock in some form. Livestock feeding remains the single largest market for grain corn.Registration of Poncho Seed Treatment Stalled
It has come to the attention of the OCPA that there are still issues pending in the registration of Poncho (chlothianidin) seed treatment; issues that have stalled registration to date. The timing of registration of this product is critical as seed corn is sold and seed treatment decisions are made by the end of November for the following year's crop. If registration is not promptly granted, Ontario field corn producers will miss the opportunity of having access to this product for use against critical insect pests such as wireworm and European chafer. These two pests are of particular concern for field corn growers in Ontario, and Poncho is the only management tool available at this time to combat these two major pests. Furthermore, it is the understanding of the OCPA that Poncho was to be evaluated jointly under a NAFTA PMRA/EPA review as a test case for harmonization of pesticide registrations. Apparently once again, the new active was registered in the U.S. but not in Canada. Our competitors across the border have timely access to this important pest management tool, while we still do not. OCPA has written to the PMRA inquiring as to why the product was not evaluated jointly as a test case for harmonization of pesticide registrations as had been previously planned; and also urging registration in time for seed treatment and seed purchase decisions this November. It is anticipated that the European Union will shortly refuse to re-register atrazine. The decision to exclude atrazine from the EU's Annex 1 listing is not based on human health concerns, but apparently based on potential residue persistence in ground water. Unfortunately, this decision is based on old atrazine industrial uses and application rate (very high) data potentially resulting in persistence levels above the 0.1 general EU limit for ground water. Current application rates in North America are significantly less and result in sharply lower residual levels in ground water. For example the US guideline for 2004/05 will be 12 mg/L, the UK 15 mg/L, and Australia 20 mg/L. The UK's expert scientific panel has reviewed atrazine and stated that most of the corn acreage in the EU could be treated with atrazine with no problem occurring in water. In Canada, the PMRA's re-evaluation of atrazine is expected to be completed in early 2004. Atrazine is expected to be re-registered in both Canada and the US.Standards for Labeling GMO Foods
In September, after many months of rancorous debate and several votes, an unwieldy 128-member Canadian General Standards Board committee reached agreement on draft standards for the voluntary labeling of genetically modified foods. OCPA was part of the process and voted in favour of the standards in an effort to move the process along and forestall efforts by anti-GMO forces to make labeling mandatory. The guidelines set out conditions for labeling and advertising foods as containing or as being free of genetically modified ingredients. Rules for verification are also detailed. The standards will not be made public until they have been approved by the Canadian General Standards Board which could easily take several months.OIA Proposal to Regulate Agro legists
The Ontario Institute of Agrologists is proposing a new Act to regulate the activity of professional agrologists in the province of Ontario. The OCPA is opposed to this proposal to introduce mandatory registration of agrologists. OCPA agrees with the assessment of the Ontario Agri Business Association that agriculture in Ontario is already "competently, competitively and professionally serviced by a broad range of knowledgeable and well-trained staff from the crop inputs, grain and feed sector of agri-business." Ontario is already part of the Certified Crop Advisor (CCA) program, the Canadian Feed Industry Advisor (CRIA) program, the Certified Animal Health Representative (CAHR) program, in addition to the industry-driven "Professional Applicator" designation. The OCPA sees no need for another layer of regulation and licensing.We welcome Karalyn (Kari)Wagner to the OCPA team. Kari joins us as a full time employee in the position of Bookkeeper/Database Management clerk. She will be responsible not only for the bookkeeping activities for the organization but also for producer, sales and check-off records. Kari replaces Ann Heer who is leaving OCPA at the end of October and will be moving to Calgary. We extend our best wishes to Ann and her family.
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