November 2003
Experts favour culling cows for slaughter now
Keeping cull cows around is an expensive hobby. A 1,000-pound cow worth $200 now may still be only worth $200 a year from nowby DON STONEMAN
Beef producers face a tough choice as winter approaches. They must decide if they should sell their cull cows for whatever they can get on current markets, or hang on to them, try to get another calf out of them and hope for markets to improve.Nancy Noecker, Ontario Ministry of Agriculture and Food (OMAF) cow-calf specialist based in Kemptville, says there is "no cookie-cutter answer." If a cow is old and broken down, you might as well take the price you can get now," Noecker says. "If you have to buy feed, maybe the first loss is the best loss."
More thought is required if the culling candidates are young cows that are open or are "problem calvers," Noecker says. A cow owner has to decide how much time a problem cow will take at the next calving and whether her calf is worth it. One possibility is breeding an open cow now. This works best if she can produce with another calving group.
Cull Cow Volume and Pricing (per cwt) Week ending May 22 - Oct. 9, 2003 WEEK # VOLUME LOW HIGH AVG 21 642 38.25 60.12 49.54 22 231 32.96 54.87 44.09 23 467 29.62 51.45 41.31 24 663 28.31 47.18 38.17 25 520 25.67 41.05 33.85 26 429 21.00 35.74 28.28 27 482 21.54 34.19 27.83 28 605 15.96 28.86 22.85 29 919 14.69 27.26 21.47 30 1277 11.82 20.13 16.26 31 1216 10.83 17.76 14.49 32 1078 11.27 18.15 14.71 33 827 10.97 20.00 15.20 34 724 10.18 19.30 14.41 35 1216 8.76 16.45 12.91 36 487 8.61 19.69 14.10 37 591 10.62 25.50 17.71 38 804 9.78 24.53 17.36 39 1103 11.73 25.75 18.50 40 1343 11.01 21.55 16.14 41 1377 10.78 18.35 14.80 Cow calf operators who figure they can get hay for $10 a round bale will have a different answer than producers who "have to pay big bucks" in a hay-short area. Guelph-based beef specialist Joanne Handley estimates that feeding a beef cow over the winter costs just over $300 for 210 days of feeding hay at $80 a tonne. That doesn't include interest on an operating loan or yardage.
There may be some opportunities to keep cows over the winter by grazing them on cheap feedstuffs such as corn stalks, straw or soybean stubble, Handley says. Keep in mind that they will need mineral and vitamin supplements. Grazing on low-quality stubble works best with open cows she says, but she wonders if it is economic to keep open cows over the winter.
There used to be opportunities to make a profit buying thin cows cheap and feeding them to gain weight. But Dennis Martin, beef feedlot specialist with OMAF based in Clinton, doesn't see any moneymaking potential in this because current markets aren't likely to improve any time soon. It's a good bet, though, that cull cows won't be eligible for export for some time beyond that, Martin says.
A farmer can likely buy a 1,000-pound cull cow now for $200, he says. After feeding her for six months she may still only be worth $200, he says, even with the extra weight that is put on her. His advice is to cull for slaughter now. "The reality is that to keep (a cull cow) around is an expensive hobby," he says.
The United States may open its border to young live cattle as early as January 2004. "We are coming into cold weather and these cows are going to eat a lot of hay. If she's worth $200 now and she's only worth $200 a year from now she's costing $500, $600 or $700 a year to keep her."
The same market reality faces dairy producers, says Woodstock-based OMAF dairy specialist Brian Lang. Regardless of the market, there is nothing to be gained by keeping cull cows that can't be rebred. "If she isn't rebred, why would you want to keep her for any length of time at all? "Are you going to recover anything if you feed her and house her for the winter?
"My short term answer is that you aren't going to win on that process," Lang says. BF
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Canadian Boxed Beef Report should help close the U.S-Canada price gap
Due out this month, this new report will help target marketing efforts for under-performing cuts of meat and put more value backby DON STONEMAN
Even before BSE struck the Canadian beef industry, meat from a beef carcass marketed in Canada was worth between $70 and $100 less than if the same animal was killed in the United States.A new weekly report, scheduled to be launched at the beginning of this month, aims to tell the beef industry here how to close the gap.
The Canadian Boxed Beef Report is a joint project of the George Morris Centre in Guelph and Sparks Companies Inc., a consulting firm based in Memphis, Tenn. The report will compare prices of a dozen or more principal beef cuts in the United States with prices of the same cuts here, says Dennis Laycraft, executive-vice president of the Canadian Cattlemen's Association.
Prices will be compared at the wholesale level. The wholesale price "is the average price the packing industry in Canada is being paid when it sells boxed beef," Laycraft says.
The report "will start to show how we are performing on certain products," he notes. That information will be useful in targeting marketing efforts, domestically through the Beef Information Centre, and for exports through the Canadian Beef Export Federation.
"Our principle objective is to target marketing efforts for under-performing cuts of meat and put more value back into the carcass and consequently more value back into live cattle."
The prices published in this new report will be estimates based on information from meat purchasers and the packing industry, Laycraft says.
Laycraft says this report was being developed before the BSE crisis broke last May. "It just came home with more urgency," Laycraft says.
Kevin Grier, senior market analyst at the George Morris Centre, says the report that he intends to publish is modelled after the U.S. Department of Agriculture's National Daily Boxed Beef Cutout And Boxed Beef Cuts report and the National Carlot Meat Trade Review. The Canadian version of both of these reports will be scaled down, Grier says.
Prices obtained for the different cuts are imported into an Excel spreadsheet on a personal computer. The model recognizes the prices and multiplies them by the yields of the different cuts. The result is a cutout value for the carcass itself. That value will be posted in terms of Canadian grades of cattle.
"People have been trying to convince Agriculture (and Agri-Food) Canada for 15 to 20 years that this is something that the industry needs. We are doing it, finally," says Grier.
At first, this report is going to be published on the CanFax web site at: http://www.canfax.ca/, Laycraft says.
Eventually, it may be available on a subscription-only basis. BF
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Clock is running out for milk exporters
Will the Federal-Provincial Agricultural Trade Policy Committee push for a replacement of the now defunct export milk program? Prospects don't look good, say insidersby JOE CALLAHAN
Back when she was still Ontario's agriculture minister, Helen Johns said she wanted to hurry to get an export milk program into place that would work in harmony with supply management.After Frank Ingratta, the deputy agriculture minister, hosted a federal-provincial teleconference in late August, he said that a consensus was reached to conduct a policy review of the matter.
The Federal-Provincial Agricultural Trade Policy Committee is handling that policy review and, with luck, the terms of reference for the review will be completed by early November, says this province's representative, Bobby Seeber, agriculture ministry senior policy advisor.
However, according to Blair Coomber, co-chair of the committee that met in Halifax on October 2, "the Federal-Provincial Agriculture Trade Policy Committee was very clear that it wasn't our job to look at any new programs...All we are going to do is a bit of analysis.... It's going to be a very short piece of work...."
That doesn't bode well for exporters such as Georgian Bay Milk Company, which had been counting on a new program to keep it in business after Nov. 30. Owner Chris Birch says he has heard nothing new about a proposed export program.
Processors were hurt when the export markets were shut down earlier this year after the World Trade Organization Appellate Body ruled that Canadian dairy exports were subsidised.
"There are about 15 million litres a month of milk that are not going through our plants any longer for the export trade, so there's been a fairly negative effect on the processing sector in regards to jobs and sales," says Tom Kane, president of the Ontario Dairy Council. "We've certainly been hit hard on this and we would welcome any kind of new program."
Kempton Matte, vice-president of Saputo Inc. based in Montreal, claims that his company has lost in the neighborhood of $50 million worth of business because of the export problem, and the decision to close two processing plants in Ontario was largely in response to it. He doesn't believe that the Ontario government is serious about establishing a dairy export plan.
"The discussions (to establish a dairy export plan) came about as a political response by (former agriculture minister) Helen Johns. It's not going to happen because the Dairy Farmers of Ontario won't allow it to happen," says Matte. "We were poised and intending to develop what we would have considered to be a world-scale export business in Canada," Matte says.
"With the (World Trade Organization) ruling, we had no choice but to withdraw from the market." BF
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Is "filled milk" for cholesterol-conscious consumers coming to Ontario?
Dairy Farmers of Ontario is adamantly opposed. But an Australian university claims to have overcome the flavour and "mouth-feel" problems associated with it. And the coming repeal of the Edible Oil Products Act could open the doorby DON STONEMAN
Australian scientists boast that they have developed the first successful "filled milk" product in the world, replacing the butterfat in milk with a vegetable oil to make a dairy-like product that is touted as healthier for cholesterol-conscious consumers. Would a product like this be welcome in supermarkets in Ontario?Not if Dairy Farmers of Ontario (DFO) has its way. "It's our position that filled milk should not be allowed in this country," says DFO chairman Gord Coukell. "There aren't many jurisdictions around the world that allow filled milk."
Ontario is one of those jurisdictions at the moment. But that might change next June 1 when The Edible Oil Products Act will be repealed. The 70-year-old law regulates foods made with edible oils that resemble dairy products. Its removal would open the door to margarine makers who colour their product to look like butter. Margarine-butter blends will likely also be allowed. And a host of new products could follow, including filled milk products such as Farmers Best, developed at Australia's Charles Sturt University in New South Wales.
The target market is people at risk from high cholesterol. Recent research has found that there are two types of cholesterol -- low-density lipoprotein cholesterol, which is unhealthy, and high-density lipoprotein cholesterol, which is healthy and helps the body deal with the other kind. Eating polyunsaturated fat products tends to lower the good cholesterol along with the bad. Therefore a monounsaturated product is desirable.
Previous attempts to make these products have been resounding failures. The resulting liquid tasted like beans and lacked the "mouth feel" of milk. But now the New South Wales department of agriculture brags that Charles Sturt University has beaten the flavour problem and solved the "mouth-feel"' question by using a premix which coats the fat globules, imparting the texture of milk fat.
Could a processor adopt this technology, make and sell a product such as Farmers Best in Canada? Whoever decides to develop such a product is likely going to be breaking some new ground here. "Milk is defined as a product from cows," says Gail Daniels, acting national manager of dairy and honey programs for the foods of animal origin branch at the Canadian Food Inspection Agency (CFIA). She wonders how a Canadian version of Farmers Choice would be defined.
The CFIA would be involved in labeling and would likely not allow it to be called "filled milk," Daniels says. That term has no meaning for consumers. Daniels thinks another question would likely be nutritional equivalency, which fits under Health Canada's mandate.
According to Charles Sturt University, filled milk is not difficult to make in a standard bottling plant. Most plants have technology to skim the cream off milk anyway. The premix is dissolved in hot water to form an emulsion that is added to the soybean oil. This mixture, which has the consistency of dairy cream, is added to the bulk skim milk, mixed, homogenized and packaged.
Dairy Farmers of Ontario wants new national regulations brought in before the Edible Oil Products Act is repealed to prevent a plethora of new products from hitting the market. ""We need some things in place in the province to keep some semblance of order until the national issues get clarified," Coukell says. Getting national regulations passed is a "slow grind," he says.
DFO will be looking for some new provincial regulations first. A series of working groups, including soybean producer representatives, dairy farmers and processors, has been set up to look at these matters this fall.
"I see good potential for products like filled milk to happen," says Janet Nauta, communications assistant with Ontario Soybean Growers, based in Chatham. "If you can get something that is monounsaturated and doesn't have the saturated fat, it will be a healthier product."
Nauta had never heard of filled milks until the subject came up in a meeting with DFO and officials from the Ontario Ministry of Agriculture and Food in May. "I don't know how much oil would be used or what segment of the population would want to use that," she says.
For his part, Gord Coukell is dead set against the product. "If you want to call it milk, why it's milk. If you want to call it 'Jim's Wonderful Beverage,' well then, it's whatever it is. If it's going to be milk or have any connotation that it's milk, then it had better be milk and not have the butterfat removed and a cheap vegetable oil put in it to distract from the milk's nutrition." BF
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The summer's weather - normal in Ontario, but plenty of extremes elsewhere
While no records were set this year in Canada, conditions were significantly drier than normal in the Prairies and southern B.C. And around the world - particularly in India and Europe - record-setting temperatures and drought took a heavy tollby HENRY HENGEVELD
Ontario farmland experienced about as normal a summer this year as a summer could be -- a half degree above normal temperatures, less than one per cent below normal precipitation and no major storm damage. Other than a few weeks of excessive heat in early July and in mid-August (the latter coincident with the big blackout), it's been rather pleasant and a welcome contrast to the droughts of summer 2002.Although Ontario weather conditions may have been rather average, most of the other 10 climate regions across Canada showed a much more significant variance. None set new records, but six regions experienced temperatures that were among the 10 warmest in their history. Only the northern B.C. mountains and the Yukon were a tad below normal.
There were also some significant precipitation anomalies. The Northwest Territories and High Arctic, for example, were very wet (+34 per cent and +25 per cent, respectively), while significantly drier than normal conditions persisted in the southernmost parts of the Prairies (-38 per cent) and the southern British Columbia mountains (-35 per cent). However, as so often happens, many of these regional differences cancel each other when averaging across the country.
As a result, Canada as a whole was, like Ontario, rather closer to the norm than in recent summers -- temperatures a moderate 0.9C above normal (although still the fourth warmest summer on record since 1948) and precipitation a very modest 1.3 per cent higher than the average. Somewhat more impressive is the observation that this is now the 23rd of 24 consecutive seasons since 1948 with above-normal temperatures.
The two big weather stories that emerged out of these statistics were the forest fires in interior southern B.C. and, to a lesser extent, grasshoppers in the Prairies. In the former, the combination of warm temperature and a number of consecutive seasons with below-normal precipitation left much of the region's forest biomass and soils tinder-dry.
Meanwhile, farmers in the southern Prairies, already hard hit by several summers of drought and the global market impact of a single case of mad cow disease, watched in dismay as droughty conditions returned in southern regions by midsummer and hordes of grasshoppers swept over much of the landscape, gnawing away at yet another crop. Ranchers already unable to market their cattle because of the mad cow disease embargo were now watching the feed needed for their herds disappear before their eyes.
Outside of Canada, there was the usual litany of extremes in various parts of the world, although some caused disasters of uncommon proportions. In the United States, for example, after a record-setting 562 tornados wreaked havoc across the country in May (killing 41 people), another intense drought season settled in during the summer over its western regions. By early September, almost half of the country was under drought conditions.
In Sri Lanka, heavy rains caused landslides and flooding that killed 300. But the story that the media talked about was the searing heat in Europe and India. Almost continuously, for a period of three months, a change in atmospheric circulation caused hot, dry African desert air to move its way northward into western Europe.
In Rome, the Pope issued an appeal in mid-August to people around the world to "raise to the Lord fervent entreaties so that He may grant the relief of rain to the thirsty Earth."
The heat and concurrent drought also came with a big price tag for European farmers. While last year's summer floods cost the region an estimated $16 billion in lost properties, this summer's losses from heat and drought may be even worse. By the end of July, German farmers estimated that 80 per cent of their crops were already lost to drought. Other European countries fared little better, with many farmers complaining that corn production was a real disaster and the feed for cattle largely gone. By mid-August, European farm organizations estimated losses in farm productivity at more than $5 billion.
Meanwhile, in Portugal, forest fires wiped out 360,000 hectares of valuable timberland, with an estimated price tag of at least $1 billion US. Spain, Italy, France and Germany also lost large tracts of forests, although with less devastating impacts on their larger national economies.
In many respects, these events are a story of déjà vu. After all, weather disasters have always been part of history, even to the point of causing or significantly contributing to the collapse of some ancient civilizations. Hence, few climatologists would argue that this summer's litany of weather extremes, or those of other seasons in recent years, are hard evidence that the world's weather is spinning out of control.
However, this summer's events did catch the attention of the staff at the World Meteorological Organization (WMO) in Geneva, perhaps because they had the personal experience of sweating through the hottest June in Switzerland in more than 250 years. Normally known for its very cautious pronouncements about weather and climate, the WMO issued a press release in early July that highlighted the unusualness of weather behaviour in recent years (including last year's great floods) within the context of the past century of data. And it warned that this wackiness is consistent with model projections of a warmer global climate.
Given that the decade of the 1990s appears to have been the warmest decade of at least the past 1,000 years, that 1998, 2001 and 2002 were the three single warmest years for the same period, and that 2003 is expected to join this elite cluster, it does seem rather suspicious. BF
Henry Hengeveld is senior science advisor on climate change at Environment Canada.
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Time to reconsider unrestricted livestock access
Restricting livestock access to surface water can benefit the overall rural community through better stream health, better protection of downstream uses, including human health, and through better wildlife and herd healthby MURRAY BLACKIE
If you are like me, you probably have at least one place, which you see or drive by frequently, where a gross example of cattle access exists. And, probably like me, you ask yourself how that farmer can continue this practice with a clear conscience.Apart from such excesses, there are countless examples that appear far less threatening to the environment. The pastoral scenes on milk cartons or on calendars, along with the argument that differences between intensive and extensive or high-density and low-density operations need to be considered, continue to create shades of grey rather hues of black and white. In the following comments, I will try to reinforce the reasons for and the benefits of limiting access.
As mentioned in my September column, the acute problem of manure spills has received more attention than more chronic, everyday water quality problems, such as run-off, milk-house wash-water discharges, inadequate septic systems or cattle access. These chronic issues continue to pollute our surface and ground water. The Clean Up Rural Beaches (CURB) reports prepared by more than 20 conservation authorities across Southern Ontario in the mid- to late-1980s concluded that bacterial problems at rural beaches were generally more attributable to continuous inputs, such as those listed above, as opposed to more acute sources spills and discharges. Yet the cumulative impacts of chronic problems have traditionally resulted in a more subdued reaction from the Ministry of the Environment (MOE) than have manure spills.
Damage from livestock access can take different forms, including:
The measures usually recommended to deal with these problems include:
- Impairment of water quality and destruction of fish habitat similar to that caused by any nutrient-rich, high-strength organic material such as sewage or food processing waste. This can take the form of excessive plant growth, disruption of the oxygen regime and elevated ammonia levels.
- Degradation of aquatic ecosystems from sedimentation, trampling, damage to vegetation, destruction of stream characteristics, smothering of spawning beds, smothering of fish food organisms and changes to overall bio-diversity.
- Disease transmission to downstream herds or wildlife, for example Leptospirosis.
- Concerns about the safety of drinking water or recreational uses, such as rural beaches.
Although this type of chronic discharge problem has not been generally pursued aggressively by the MOE in the past, the Ontario Water Resources Act (OWRA) could be used to respond to environmental problems of this kind and could result in corrective measures.
- Fencing or exclusion using techniques which deal with, ice damage, high flow conditions, weed control.
- Using alternate watering options.
- Stream crossings and optimal use of pasture.
- Location of alternate or additional feed, salt licks and shade.
In recent years, Environment Canada, through the federal Fisheries Act, has been aggressively addressing livestock access issues by enforcement, most notably in the Wilton Creek watershed area, and through promotion compliance activities in selected sub-watersheds in 2002 and 2003.
We should accept that restricting livestock access benefits the overall rural community through better stream health, better protection of downstream uses, including human health, and through better wildlife and herd health.
In next month's issue of Better Farming I will discuss other ways to manage environmental issues better on your farm and pursue the elusive goal of constant environmental improvement. BF
Murray Blackie is a former agricultural specialist with the Ministry of the Environment and is now a consultant, expert witness and writer on agro-environmental issues.
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Being contrarian works for the barn-building de Bruyns
By using counter-cyclical strategies and building a new finishing barn when pork markets were bleak, these Oxford County hope to be in good position for better times in the fall of 2004by DON STONEMAN
In 1999, when pork markets were bleak, brothers John and Dave de Bruyn built a new finishing barn on their Oxford County farm. Last month, when the future for pork also looked grim, They put the first gilts into an expanded sow and weaner barn."My father always taught me that when other people walk you run, and when they run you walk," says John de Bruyn, who produces pork and crops 1,000 acres in partnership with his brother Dave in Oxford County. They've been farming for 20 years and say the philosophy has worked so far. "We always try to be a little counter-cyclical. It's worked out not too badly," John says about a planning process that began last winter.
The brothers held an open house at their new 700-sow-and-weaner barn east of Salford in mid-October. John says he's gleaned ideas from others' open houses in the past and this provided an opportunity to share his ideas with the industry "before we get it (the barn) stocked."
The new sow barn is part of a long-term, staged expansion that the de Bruyns have planned; it will replace a de-commissioned 350-sow barn. The last sows in the old barn were bred in the first week of October. The finishing spots were already constructed in different locations (one finishing barn had been filled with purchased weaners) and sow expansion will fill about 4,500 finishing places altogether "Every time we pick an area and expand, we generally overdo the area we expand and it fits in later on," he says.
Jim Whitehouse's Pureline Swine at Guelph, part of the Alliance of Independent Breeders group, was the source of the breeding females. De Bruyn says he was looking not only for good genetics, but for stock that was negative for Porcine Reproductive and Respiratory Syndrome (PRRS) and Mycoplasma hyopneumoniae. He will still vaccinate pigs for PRRS. "I'm leery in this area about keeping a PRRS-negative status. I think I will stay clean (of mycoplasma ) for a couple of years," he says.
Being a contrarian works in a number of ways, de Bruyn says. It's easier to build "when everyone else is down in the dumps," he says. "Anything from equipment to building becomes more available and more negotiable," he says.
De Bruyn thinks the timing for marketing hogs in the fall of 2004 will be good because he expects higher prices. "It makes a huge difference to cash flow."
Having finishing barns at different locations is useful from a bio-security point of view. There is a month's gap between the time when pigs from the old sow herd being marketed and when the barn is filled with new pigs. This gap allows enough time for a thorough wash down and "a rest" of the facility before putting in hogs from the new sow barn. Gilts put in the sow barn now will produce finished pigs in late summer and early fall of 2004.
Meanwhile, pigs from the old herd will still be fed and finished in another barn, maintaining the cash flow -- always a challenge during a breeding-herd depopulation. In the new barn, the first farrowings will take place in late February, and the first weanings in late March. Sometime in June, a finishing barn will be ready to take new pigs to market in the fall.
"The decisions are tough enough; it's the timing to make the decisions" that is really critical, de Bruyn says. BF
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November 2003
Know your costs and profits for each piece of land when you negotiate your rent
Basic to a sound negotiation is knowing how much you made per acre over the last three years and what you should charge yourself for fieldwork and harvestby PAT LYNCH
As Kenny Rogers might tell you, you've got to know when to hold 'em, know when to fold 'em, know when to walk away and know when to run. This applies to renting land.Basic to the landlord-renter relationship is keeping the landlord informed about his or her land and what is going on in agriculture. You have to do the little things, like paying on time, doing extras like snow plowing and removing dead trees.
Where many growers stumble in rent negotiations is in calculating how much they make on each property. It is too convenient to add up all costs minus returns and figure out how much you can pay for rent. If you know your exact profit on each parcel, you can be more confident about how much you can afford to pay. You also will have a better idea as to when to walk away.
How much should you make per acre? Most growers will answer, "As much as I can." That answer is probably not good enough today. There are more renters than landlords. Your competition may be willing to rent land for less profit per acre.
It also begs the question, "What are your expectations for profit per acre." I asked this last winter and the answers varied from $40 to $100 per acre. The $100 per acre is probably unrealistic for 2004. Your competition may be willing to work for less. I imagine some growers are even losing money on land they rent, but how long can they continue to do that?
It is basic that you know your costs and profits are for each piece of land. You know how much you paid for seed, fertilizer and pesticides and what you paid for rent. Do you know how much profit you made per acre over the last three years? Do you know what your costs for fieldwork and harvest are?
Most growers charge themselves custom rates for fieldwork. How much profit is there in custom rates? There is an unspoken presumption that when you charge yourself custom rates you are breaking even. This sort of goes along with the attitude that you do custom work for the neighbours to help them, but you are not making any profit on it. This is not true. Custom rates have a built-in profit margin. This margin is different for different growers. Growers who have older equipment that is well maintained and in excellent condition will have lower costs and will make a higher profit per acre at custom rates than those growers with newer equipment and a smaller land base.
To use average custom rates as generated in ministry publications is as unrealistic in calculating profit per acre as using county average yields when you calculate your returns per acre. There is a bigger difference among grower's actual costs of fieldwork than average yields between growers. There is also more difference in equipment costs per acre amongst growers than in input costs.
An additional thought is to track profit per acre over three years. When you factor in weather, crop price cycles and some higher risk/higher return crops it is realistic to calculate profits over three years. You may have a piece of land that grows one crop really well. Also some weed control practices and costs in one crop may greatly affect the weed control costs in another.
Good luck in your negotiations, and don't forget that you don't have to rent it just because you were renting it. BF
Pat Lynch CCA (ON) is head agronomist for Cargill in Ontario.
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November 2003Sixty-eight years a mailman
Please see page 62
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