Archive for December, 2008

HAPPY NEW YEAR

December 31, 2008

I would like to wish everyone a happy new year and thank you for taking the time to visit this site.  The traffic on the site continues to grow on a daily basis which is very encouraging.   Thank you to everyone for all the feedback and help in developing the content of the site.  A special thank you to the Norm and Sara for your advice and patience with all my questions.  Also a thank you to Jay Whetter for adding his blog feed to the right side bar.  

The plans for http://www.realagriculture.com in 2009 are big and I promise to continue to build on the early success of the past two months.  As an industry lets learn from 2008 and approach 2009 with energy and focus across North America.   See you in 2009.  
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Fertilizer Buddy Gains Attention

December 31, 2008

In the short life of RealAgriculture.com, by far the most interest has been in the fertilizer stories. Fertilizer prices are a very hot topic in newspapers, on the Internet and in the coffee shops across North America.  Due to the volatility of the fertilizer market over the past 12 months, the spread in pricing from one retailer to the next can be wide.  Larry Weber, a market commentator has started the website Fertilizer Buddy to encourage farmers to share fertilizer pricing across Canada and the United States.
On the site Weber comments that
“If you are looking for price discovery and price transparency in the fertilizer market, farmers can help themselves by posting their area prices. …The Internet is a powerful tool if you use it to your advantage.” 

Some posts on the site are critical of Weber’s motive and whether or not the information is legitimate based on some farmers posting anonymously.  But all in all I would say that the prices supplied by visitors to the site are legit and in good faith.  I think that it is important that we do not let the possibility of a couple unscrupulous people wreck a really great idea.   

When I discussed the site with several ag input retailers across Western Canada, the feeling was that farmers sharing information is a good thing but make sure that the information is correct.  Making decisions based on false information is just as harmful as having no information at all.  Questions to ask yourself when reading the prices are for example, what are the payment and delivery terms?  

With farmers still in shock from the volatility of the past year gaining more insight is a great way to make better decisions.  
Larry Weber and I have been playing phone tag for a week, as a result I was unable to get him to provide comments on the overall results of the site.  When we do connect I will follow up on this story.  

Mexico Cuts Off Beef Trade

December 30, 2008
Last week, Mexico cut off the imports of US pork and beef from 30 US plants owned by Tyson, Smithfield Foods, JBS and Cargill. This is in addition to Mexico joining Canada on December 19th to file a complaint with the WTO regarding COOL. Reportedly, the ban had to do with technical and sanitary issues at the US plants.  As of today Mexico has resumed imports from 21 of the 30 plants and reports indicate that the other nine plants will be back onstream shortly.

According to a Reuters report, Mexico denied that the import ban had anything to do with COOL or its filing with the WTO. It does seem that the timing is more than just a coincidence. The ban was completely unexpected, it was during the week of Christmas and Mexico is the largest importer of US beef, second in pork and third in chicken.  I find it hard to believe that this was not a shot across the bow to try and show the US that Mexico is willing to play the US game of hardball to get what it wants.  Canada’s next move could be interesting as Canada tends to play safer and follow more diplomatic tactics.  If you didn’t think that 2009 would be interesting, I think you may have to reconsider.   

Hon. George Groeneveld Discusses 2008

December 23, 2008

Yesterday on Call of the Land, an Alberta Radio Show, there was an interview with the Honorable George Groeneveld, the Alberta Agriculture Minister. Known for his straight forward answers Mr. Groeneveld discusses the highlights of 2008. In the interview he discusses trade with Asia, the implementation of ALMA and ongoing issues with the WTO.

This has been quite a turbulent year for Alberta Agriculture in the fact that commodity prices have been volatile, credit markets are shrinking while the beef and pork business are fighting new legislation that threatens it’s very existence. Whether you agree with the Minister or not you have to respect the massive job that is in front of him and his department. Issues not mentioned in the interview were COOL, industry consolidation, BSE, AFRP I & II, Alberta Bio-fuels strategy and the future of the Canadian Wheat Board just to name a few.

If you want to provide feedback to the minister directly you can email him at george.groeneveld@gov.ab.ca or call his office at (780)427-2137. If you have some strong feelings in support or in contradiction to the policies and strategies taken, I encourage you to contact the minister’s office and let your feelings be known. Even if you are out of province I would think that it is important to let the province of Alberta know how their policies are affecting your role in agriculture, wherever you live in the world. Let me know if you get a response from the Minister’s office or add your results to the comments section of this post. Good Luck.

Tom Vilsack Gets Interviewed by Rick Mercer

December 19, 2008
I stumbled across this today while I was scanning my news feeds. This video is several years old because it was taken when Tom Vilsack was the Governor of Iowa. I really hope that the new Agricultural Secretary learns some truths about Canada before he meets with Mr. Ritz in the coming year. There is no doubt that he was tricked into this by Mercer but it must be incredibly embarrassing never the less.

(watch the whole video so that you get the punch line at the end with Tom Vilsack)
If the above video does not work use this link to view the interview.
http://www.youtube.com/watch?v=Ydw4kj9P90w

Tom Vilsack is Appointed Ag Secretary

December 17, 2008

It is official, Tom Vilsack is the new Ag Secretary in the United States. Vilsack is the former governor of Iowa and Presidential candidate. Iowa has the second largest agricultural output value in the country, second to only California. If you want to intimately get to know the new secretary, check out his My Space page or Wikipedia page.

According to a report from MeatingPlace.com:

“He also has been interested in cutting subsidies for agricultural commodity crops in order to better fund initiatives to improve environmental practices…”

Coming from a “corn” state, Vilsack’s record on beef issues are mixed. Accordingto the website http://www.change.gov/,Obama’s priorities have been laid out very clearly. With change continuing to be the mandate of the President Elect it would make sense that Vilsack shares those same directional change feelings. The one issue that Vilsack and Obama have not agreed upon in public is the speed as to which the troops should be pulled from Iraq as well as Vilsack initially supporting Hilary Clinton after he withdrew from the Democratic race.

According to http://www.firedoglake.com/
“Vilsack has been criticized for being to supportive of the efforts of the bio tech industry.”

Other sites such as the Iowa Independent claim:
“Expect the incoming Secretary of Agriculture to achieve tangible results that are easy to explain, because that is Vilsack’s style. He will immerse himself in a few specific issues, come up with a few policy ideas, and set to work building a political consensus, diluting the original ideas when necessary. Don’t expect Vilsack, a consummate pragmatist, to turn America’s food system upside down anytime soon.”

For more reaction to the Vilsack selection read this Iowa Independent story where you can find out who is happy and who is dissapointed in Obama’s choice.

Only time will tell how this appointment will affect Canadians. I think just like the President Elect, Canadians will nervously await the ripples of change as they come north.

NFU is Critical of Agricultural Trade

December 16, 2008

Sometimes when you are trying to get a point across you stretch the fabric of reality to invoke thought.  Many speakers and writers do this everyday in order to make a point.  Well I think the NFU has crossed the line this week as Darrin Qualman made statements regarding Canada’s focus on trade to better agriculture in the long term.

“World Trade Organization agreements have been harmful to Canadian agriculture according to the National Farmers Union.  Director of research Darrin Qualman argues our country places too much emphasis on foreign trade.—Darrin Qualman”

Canada is a nation that needs exports in order to survive long term due to the abundance of arable land and lack of population.  Not focusing on trade to become self-sustainable in food is like the US trying to become self-sustainable in oil.  It sounds great but is virtually impossible.  We cannot allow ourselves to dream that we are going to go back to a time where one out of four people farmed.  I would advise that it is foolish to think that making farming operations in Canada smaller is the ideal scenario for Canadian agriculture.  I also want to note that the same goes for creating a system where there are 4 farms in Canada.  Somewhere in the middle is sustainability for farmers across the country.  This sustainability includes domestic use and international trade. 

“Rather than looking at maximizing foreign trade, he argues we need to create a system that provides consumers with food that has been produced locally, using sustainable practices.—Darrin Qualman”

Not focusing on trade would devastate the already hurt beef industry.  Saying no to trade on the beef industry would affectively cut our fat cattle production in half.  Cutting the cattle industry in half would decimate many communities across Canada whether they include small 50 head cow calf operations and 10,000 head feedlots.  Another vantage point is to look at grain farming.  If there was not a focus on trade what we do with all the durum that is grown in Canada.  Or what about malt barley exports? 

If we are going to have debates on how to fix agriculture lets at least be serious and have a conversation that is within the realities of today not dreaming of a return to the 1800’s. 

Agrium Confirms the Fertilizer Perfect Storm

December 15, 2008

There are signs developing which indicate much higher fertilizer prices come this spring. The biggest being last weeks announcement to halt production at Agrium’s Ft. Saskatchewan production facility. As expected the pipeline is full due to lower purchases by farmers this fall as they waited for lower prices. It really feels like the perfect storm is building this spring for much higher fertilizer prices. In its press release Agrium stated….

CALGARY, Alberta — Agrium Inc. announced today that it has shut-in production at its Fort Saskatchewan nitrogen facility and has further curtailed production at other major nitrogen and phosphate plants in North America. The temporary curtailments are necessary due to a significant build in North American fertilizer inventories and declining available storage capacity.

We are now in the old western standoff that really we have feared. I am now going to repeat something that I do not want anyone to forget………”If you have not bought any fertilizer for the 2009 growing season….Start buying in increments.”

I am not suggesting that you should buy all your needs but there is a strong argument that we may have seen the lows of the 2009 growing season. Fertilizer prices have busted lower in comparison to the 2008 spring price. In a recent story by Marcia Zarley Taylor, DTN Executive Editor, she quoted Mike Rahm, a vice president for fertilizer manufacturer Mosaic who…”confirmed the fertilizer [fall price] bust. Normally, Illinois growers apply 60 percent of nitrogen needs in the fall. But one warehouse in the state had only sold 15,000 tons so far, when they typically sell 60,000 to 90,000 tons in the same period, he said.”

The fall of the urea price is reality but be very careful of what is ahead for spring. I know that crop prices have gone down and you feel a bit jaded by input prices staying relatively higher but the reality is that making good business decisions should not be overshadowed by the fact you are frozen with pricing anxiety. Remember that buying in increments is not bad management.

R-Calf Sits Down With the Obama-Biden Transition Team

December 12, 2008

Bill Bullard, CEO of R-Calf, was in Washington earlier this week trying to mold the future of the USDA and US trade policy. The meeting was with the Obama-Biden transition team. Based on the shenanigans that R-Calf pulls and showcases how they believe in not letting the facts distort a good story, I am concerned that they were invited to partake in this meeting. Many Canadians love Obama for the same reasons as the American public does but as Canadians it is no secret that there is reason for concern.

According to CattleNetwork
“The Obama-Biden Transition Team is putting together a briefing paper to give to whomever Obama selects to be the next Secretary of Agriculture, and that person will use the briefing paper as a starting point with regard to what needs to be changed within USDA first,” said R-CALF USA CEO Bill Bullard, who represented the group at the meeting. “Besides the necessary changes to USDA, the focus of the meeting also was to discuss what the new Agriculture Secretary will need to do immediately to begin to implement and accomplish what Obama said he would do during his election campaign.”

I must admit that this is the beginning of the scenario that really scares me. With the collapse of the US economy and the rumors of Obama’s NFU ties I think it is possible that R-Calf grabs an ear of the new administration. At this point Americans are scared and trying to grasp at anything that will save their economy. I believe that it should be a great fear for Canadians that this fear results in a reopening of NAFTA and stronger interpretations of COOL.

“R-CALF was the only organization participating at the meeting that exclusively represents the U.S. live cattle industry,” Bullard concluded. “We are pleased that R-CALF is recognized as an agricultural leader in Washington by the new Administration, and we think that’s going to help us considerably in achieving the membership directives of our organization.”

I have not seen the rest of the invite list but the fact that R-Calf was even invited really scares me. I just have a really bad feeling regarding who Obama is going to listen to and how the formation of the policy affects Canadians and more specifically trade.

I encourage you to click onto the link to CattleNetwork and read further into the four areas that R-Calf commented on in the letter that they submitted to the Obama-Biden transition team.

More Time To Repay CAIS Overpayments

December 11, 2008

Jay Whetter, Editor of Grainews, wrote on his blog this week about some recent announcements from the Growing Forward administration. I think that it is important that you read it and make sure you are abreast with the current stability programs. The post is entitled “More Time to Repay CAIS Overpayments.”

I also encourage you to add Jay’s RSS feed to your google reader to make sure that you don’t miss his future posts.