Archive for November, 2008

Beef Tracing Is a Reality

November 26, 2008

IBM has developed a system to fully track a steaks movement through the supply chain. This really is the ultimate in providing information to the customer. Whether or not someone is willing to pay for that sort of information I think is still in question. I still think that this sort of information is more “innovative” than a money maker for the providing stakeholders. What it does tell the market is that as an industry we are not hiding but willing to run around naked, exposing ourselves to the consumer. If this technology becomes commercial in application we will be showing the customer that we have nothing to hide. And in the big picture changing perception of the red meat sector is the true benefit for the industry. Click on the link below to read the original story.

http://www.marketwatch.com/news/story/IBM-Province-Manitoba-Build-System/story.aspx?guid=%7BBAC500E2-FDF7-4B2F-8CD6-2562D7BE665C%7D

Tread Carefully in Today’s Cattle Business

November 21, 2008

I was invited by the High River Feeder Association to speak at their annual meeting last night. The meal was great and the people were very welcoming. I spoke to the fact that the beef business is under attack.

No more than ever have we had to deal with such volatility and impactful variables. When there is one major threat to your business you have a chance to mitigate the threat. Today what we face is a massive influx of threats, many of which are our of our control as single operations. A tightening credit market, recession, market volatility, fragmented supply chain, and COOL are all factors changing the landscape of the feeding business in the short and long term. The 50 people in the room last night in High River were concerned about their future in the cattle business and you should be to.

I recommend that everyone tread very carefully and stay away from trying to hit home runs because this environment does not allow for hit.

The Goal is 300 Bushel Corn

November 19, 2008

Lately there has been alot of focus on the increased need for more money to go into feed grain research in Canada. With provincial and federal funding decreasing over the past 10 years it is imperative that this change. Probably the most pressing concern is that the corn industry is focused on continuing to push corn yields higher. Trust me when I tell you that 300 bushel corn is in the sights of all the global breeders and will become reality. The challenge for the rest of the feed grains industry is when we do have 300 bushel corn how do we keep barley competitive. With more and more genetics in the lower CHU ranges many farmers have the option to plant corn that realistically never did before. As an industry we must quickly consider how we are going to ensure that crop types like barley remain viable as a feed grain. And that conversation all begins with figuring out how to get more money into feed grains breeding and research.

It May Be Time to Start Buying Fertilizer

November 14, 2008

Fertilizer has been falling lately and depending on who you are talking to the bids are quite variable. If you have not purchased any fertilizer yet this fall now might be a good time to begin to chip away at some inventory. With prices in the 600-700 range, prices are considerably lower than 5 months ago. Do not fall into the trap of continuing to hold out for more extreme pricing. The recent drop may be the reality going forward or it may be a short term downward blip. I don’t think that anyone knows. Many farmers were burnt this past year by not applying the art of incremental selling of their crops by holding out for $20 canola. Incremental buying works under the same principal and is just as effective.

Use Input Financing Programs Wisely

November 11, 2008

There are very advantageous pricing programs out in the market right now for inputs (seed, chem fert) before the year end. Along with that there are financing programs that may include do not pay or no interest until a given date. These can be fantastic programs for farmers but you need to be careful. Here are some questions to ask.

  1. Will this input financing agreement be in violation of my covenants with the your other lending institutions I use? For example the covenants that you have on your operating line at the bank.
  2. Are there are up front fees or admin fees? I don’t mean to avoid these sort of programs but make sure you are aware of the total costs of no interest programs
  3. Once the interest starts calculating, is the interest owed back dated to the beginning of the contract or does it start fresh?
  4. At the end date of the contract, can I extend the agreement or is the full balance owed at that time?
  5. Is there a limit on the account and what information will I have to supply to set up the account initially?

Input financing programs can definitely be advantageous to your operation so just ask the right questions and your farm will prosper.

Order Crop Protection Needs Early

November 10, 2008

Due to a significant increase in global demand of crop protection products you need to manage your purchases differently than before. November is a good time to lay out your crop plan and start writing down the crop protection products that you are going to be needing in 2009. If you plan on walking into your retailer at spraying time and just picking up whatever you need you are going to be greatly disappointed. Talk to your retailer about supplies and work with them to ensure you get the products you need for a successful crop.

COOL Rears its Ugly Head

November 3, 2008

Now that COOL is underway the Canadian beef industry is once again under American trade attack. with JBS Swift in Greeley announcing that they will no longer accept Canadian cattle and Pasco down to twice a week the flow of Canadian fat cattle headed south has been impeded. With the US election looking like a Democrat win we may not have relief from this ridiculous legislation anytime soon. I have had several industry participants say that they fear we are headed back into the economic reality of BSE. Last week at the local ABP meeting a resolution was passed to eliminate imports of American beef as retaliation. Also passed was a motion to encourage the Canadian government to file grievances under NAFTA and WTO. For more information on the early affects of COOL, check out the two links below.

http://www.albertafarmexpress.ca/issues/ISArticle.asp?id=91645&PC=FBC&issue=10312008

http://www.commandnews.com/fpweb/fp.dll/$fcc/htm/fcc/x_dv.htm/_ibyx/daj/_svc/cp_pub/_Id/1189877409/_k/S9rnF4V8hkcLJ72c