Index
Market Revenue Insurance (MRI)
As of October 12, Minister Peters had not taken a request to Cabinet to extend MRI for both the 2003 and 2004 crop years. Latest projections confirm minimal payouts would be triggered for the 2003 crop year at the 90% of price and yield support level ($5 million in total). No payments would be triggered on corn because the 90% support price and the 2003 average weighted market price are identical at $3.62/bushel. However, projections also confirm that the balance of the existing funds in the MRI "pot" (currently $94 million) would be totally exhausted by payouts triggered for the 2004 crop year, at the 90% of price and yield support level. Virtually all 2004 crops would trigger payments. Payouts for 2004 of about $45 million for corn would be triggered, because the projected average market price of $3.25/bushel, is sharply below the 90% support price of $3.67/bushel. And that market price projection looks optimistic! Unfortunately, as of October 12, Minister Peters had not taken a request to Cabinet for distribution of the $173 million earmarked for the "wedge fund" under the APF Implementation Agreement, signed almost one year ago. Lack of a decision on distribution of wedge dollars is also hampering funding for research and development projects. Farm Credit Canada reported October 4 that the average value of farm land in Ontario increased 3.4% in the first six months of 2004, up slightly from a 3.3% increase in the last six months of 2003. Farm Credit commented that land in Ontario "was purchased to accommodate expansion in traditional livestock (dairy/ poultry/hog) areas, notably Huron, south Bruce, Wellington, Perth and Oxford counties. Another important factor in the demand for land was the need for producers to comply with regulations for nutrient management plans. Traditional cash crop sectors in the southwest area of Ontario saw increases as well, driven partly by demand for vegetable production - primarily processing tomatoes. In the commuting zones around the GTA, lifestyle farmers buying farms for housing often pushed land values higher, particularly in Simcoe county and east along the lake to the Bay of Quinte area. Eastern and northern regions of Ontario showed little change in land values."U.S. Decision on Hog Anti-dumping Duty Expected
Ontario pork industry observers anticipate an announcement, around October 15, that the U.S. will impose anti-dumping duties on pigs exported from Canada into the U.S. Most observers expect the duty to be high such that exports of both weaner pigs and slaughter hogs from Ontario will be severely impacted. If the U.S. imposes an antidumping duty on pigs moving south, it is likely that weaners will be retained for fattening in Ontario. But the problem is that, at present, Ontario does not have sufficient slaughtering capacity to handle all the pigs we produce. In addition to the 1.4 million weaners (approximate) shipped south annually, Ontario also exports 7,000-8,000 slaughter hogs per week. If the anti-dumping duty is imposed, and is sufficiently high, all these pigs must be processed somewhere.Fertilizer Prices to Remain High
High prices for crude oil, natural gas, electricity, and other forms of energy mean that cost of production for corn continues to escalate. Energy market analysts are also predicting that prices will remain high for years to come. Corn is a relatively high cost crop to produce, especially in northern corn belt areas, such as Ontario where artificial drying is the norm. Therefore, prospects for high energy costs are a major concern. For example, an Ohio State University fertility specialist (Dr. Robert Mullen) said that ammonia production costs will continue to be high as natural gas prices approach and exceed U.S. $6/MMBtu at the wellhead. Higher ammonia costs also translate into higher costs for phosphorus fertilizers that contain nitrogen, especially DAP, MAP, and APR The cost of potassium will also continue to rise as China and Brazil expand imports of potash. To confirm the impact of high fertilizer pricing, Agrium Incorporated, the largest nitrogen fertilizer manufacturer in the U.S., said it will earn U.S.$0.65 per share in the second half of 2004, due to higher potash and nitrogen prices. Rising sales of potash to China contributed to a 50% improvement above projection in third-quarter profits for Potash Corporation of Saskatchewan.U.S. Moves to Head-off Imports of Brazilian Ethanol
The U.S. has an import duty of U.S.$0.54/gallon against imports of Brazilian ethanol (Canada does not have a duty). However, the Caribbean Basin Initiative (CBI), introduced in the Reagan administration years as a tool to stimulate economic development in Caribbean nations, permits an amount of ethanol equivalent to 7% of total U.S. production to come into the U.S. duty-free. At least two initiatives are underway to exploit that loop-hole by building ethanol dehydration plants in El Salvador (Cargill) and Trinidad (Angostura). The Trinidad project even attracted U.S.$9.6 million in financing from the U.S. Export-Import Bank, the export credit agency of the U.S. government itself! In both instances, the idea is to import anhydrous ethanol from Brazil, de-water it, and re-export it into the U.S. duty-free under CBI. Moves are afoot in Congress to curtail such projects as a means of ensuring that the proposed Renewable Fuel Standard is not undercut by imported Brazilian ethanol.
Russian Cabinet Approves Kyoto
New President at National Corn Growers Association
On October 1, Leon Corzine assumed the Presidency of the St. Louis-based National Corn Growers' Association (NCGA). The fifth-generation Illinois farmer said that the NCGA had several key priorities in fiscal year 2005: passage of a comprehensive energy bill, including a Renewable Fuel Standard favourable to ethanol; congressional authorization for new navigation locks on the Mississippi and Illinois rivers; and most importantly, defending the U.S. Farm Bill and preparing for the next. "As production costs continue to increase, risk management tools, farm support programs, the safety net and other programs become more imperative and we need to ensure corn growers continue to have access to those programs in the times when they are needed most. Risk management enhancement is going to be a crucial issue in the coming year. The Disaster Assistance Bill will provide long-term solutions for crop insurance and a more predictable disaster assistance program." Threats against U.S. subsidies and support programs under WTO negotiations are obviously a major concern. Whether WTO negotiations actually result in meaningful reductions in U.S. support to agriculture remains a crucial question.Amendments to Sulphur in Diesel Fuel Requirements
Proposed amendments to the federal Canadian Sulphur in Diesel Fuel Regulations were published in Part 1 of the Canada Gazette October 2, 2004. The proposed amendments introduce limits for sulphur in off-road, rail and marine diesel fuels aligned, with the levels and timing of requirements passed by the U.S. Environmental Protection Agency in June 2004. The proposed amendments set sulphur limits as follows:Better Energy Management Practices Yield Climate Change Results for Canadian Industry
According to Natural Resources Canada, Canadian industry continues to contribute to the climate change solution, saving 25.2 megatonnes in greenhouse gas emissions and improving energy efficiency by 8.1 percent between 1990 and 2002. That is one of the findings in the 2002-2003 Annual Report of the Canadian Industry Program for Energy Conservation (CIPEC) released in October. The report also shows that, through better energy management, CIPEC industries saved $3.4 billion in energy costs during 2002. "Canadian industry, through CIPEC, continues to demonstrate that ingenuity, combined with a commitment to energy efficiency yields results," said the Honourable R. John Efford, Minister of Natural Resources Canada. "The actions of its members help Canada meet its climate change goals, and bolster the Canadian economy by improving competitiveness, creating new jobs and opening up business opportunities." "CIPEC's role is to make energy efficiency more accessible for Canada's industrial companies, and these latest results illustrate the industry-government partnership's effectiveness at promoting better energy management practices," said Doug Speers, President and CEO of EMCO Limited and CIPEC Executive Board Chair." These results are only the beginning. With the right signals and support from government, I am convinced we could double these savings over the next three years." CIPEC - a voluntary partnership between the Government of Canada and industry to improve Canada's industrial efficiency - has been industry's first point of contact for ideas and innovation since 1975. Led by industry and administered through Natural Resources Canada's Office of Energy Efficiency, CIPEC is committed to promoting and encouraging energy-efficient practices. It offers an array of cost-cutting tools and services to all facets of Canadian industry - from mining and manufacturing to energy supply and construction. CIPEC's network includes 47 trade associations that represent more than 5,000 companies and approximately 98 per cent of secondary industrial energy demand in Canada. The Government of Canada's approach to climate change is focused on making the right choices for Canada. This will ensure that the actions taken contribute to the long-term goals of building a sustainable economy for the 21st century, a healthier environment and strong communities, while affirming Canada's place in the world. To view the CIPEC Annual Report 2002-2003, visit: http://www.oee.nrcan.gc.ca/cipec/ieep/newscentre and click on "Guides and Publications."EU Approves GMO Seed for Planting
On September 8, 2004, the European Union was cited as approving the first biotech seeds for planting and sale across the EU territory. This announcement was met with some resistance: angering green groups concerned that crops will become contaminated. The story also notes that the European Commission dropped a proposal on seed purity dealing with thresholds for the genetically modified organism content in standard seeds. This move was welcomed by the green supporters. The EU authorized 17 different seed strains of maize, engineered by U.S. biotech giant Monsanto from a parent crop which won approvals for growing just prior to the 1998 EU biotech ban. Health and Consumer Protection Commissioner David Byrne was quoted as saying, "The maize has been thoroughly assessed to be safe for human health and the environment. It has been grown in Spain for years without any known problems." The intention is to clearly label the GMO maize in order to give farmers a choice. Under an established legal procedure (assuming all EU legislation is complied with), once an EU state grants permission for seed to be sold in its territory, the commission is obligated to extend that authorization on an EU-wide basis. Since a consensus on the purity of seeds containing GMO's was not reached, it will be up to the next executive (taking office in November) to make a decision. The disagreement ar6und the 25 member panel was over the threshold level.Novel Herbicide Tolerance in a Noxious Weed Studies Evolution
Glyphosate, the active ingredient in the herbicide Roundup, has increased in usage over the past decade and constitutes a potential source of selection. In the southeastern United States, weedy morning glories have begun to develop tolerance to glyphosate. For scientists, this represents a unique opportunity to study the evolutionary genetics of a novel trait. At the University of Georgia, they discovered genetic variation for tolerance, which indicates the potential for the population to respond to selection by glyphosate. However, there seems to be a significant evolutionary constraint which exists. In the absence of glyphosate, tolerant genotypes produced fewer seeds than susceptible genotypes. This combination of strong positive directional selection in the presence of glyphosate and the strong negative directional selection in its absence may indicate that the selective landscape of land use could drive the evolutionary trajectory of glyphosate tolerance. They believe the understanding of these evolutionary forces is imperative for piecing together a comprehensive management strategy to slow the rate of the evolution of tolerance.University Researchers Identify Gene with Resistance to Soybean Aphids
After three years of research, a team of University of Illinois researchers have identified a single-gene source of soybean aphid resistance. Brian Diers, one of the university soybean breeders, said that because it is a single dominant gene, it should make it easy to cross into commercially available varieties. He also projected that it would be made available to farmers by 2008. Diers also commented the gene will be licensed for use in private and public breeding programs. This means that not one company will have a monopoly on the technology. Mansfield farmer, Ken Dalenberg (chair of the Illinois Soybean Checkoff Board's research committee) was cited as saying the farmers who will one day grow aphid-resistant varieties will use less pesticides. "What it does for a soybean farmer is give them a plant mode of resistance to an insect, which from a consumer standpoint is the cleaner, environmental choice. From a farmer's perspective, it reduces exposure to insecticides and provides a control inherent throughout the season." Funding for this research was provided, in part, by the Illinois Soybean Checkoff Board.
Winds to Blow Cash to Huron County Farmers
Les Kempers, a cash crop farmer from Underwood, Ontario, farms land on the escarpment that rises behind Lake Huron's beach-lined eastern shore. He was cited as saying the steady blow, often rising to howling gales in fall and winter, puts his farm in the likely hub of Ontario's wind-power industry. He figures it could bring thousands of dollars tumbling his way every year. There are several companies who plan to erect hundreds of electricity generating turbines along the Huron shore. Over the past few months, they have been rushing to option potential sites from farmers like Kempers by testing to find locations with the most consistent, strongest wind. There are similar land rushes underway at sites across Ontario. Along Lake Huron's eastern shore, there are 6 turbines which stretch from Port Elgin to south of Goderich. In total, Ontario is home to 10 turbines province wide -demonstration sites which produce 14.5 megawatts of electricity; a mere 0.02 percent of the province's supply. Proponents insist wind energy is on the rise, and about to boom as it has in Europe, India and parts of the United States. In the future, it could potentially supply 10 percent of Ontario's demand, says Glen Estill, a director of the Canadian Wind Energy Association.
National Corn Growers Association Announces Maize Genome Data Now Available
It was announced by the National Corn Growers Association (NCGA) on July 13, 2004, that valuable corn research is now available to research scientists working to sequence the maize genome. Monsanto Company, Pioneer 'Hi-Bred International Inc. (a Dupont subsidiary), and Ceres Inc. have transferred their independent maize sequencing information to a searchable database on the internet hosted at the Donald Danforth Plant Science Center. "Access to these gene sequences will help public-sector researchers more quickly develop corn plants with improved agronomic performance and profitable quality traits," said Patrick Schnable; a professor and director of the Center for Plant Genomics. Average Weighted Price $!42.50/tonne $ 154.17/tonne $ 136.84/tonne Back in March, NCGA announced the three industry leaders would share their corn genome sequence data. Combining this information with corn sequencing data in the public domain will significantly accelerate the identification of genes within the entire corn genome. There is the thought that the complete sequencing could occur by 2007, potentially years ahead of when it would have been completed without this initiative.
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