Canada grabs bigger share of Japanese soy food market
New food labelling laws have us take market share from the United States, but the growth may start to level offby DON STONEMAN
Roundup Ready soybeans have been good for Ontario growers fighting weed control problems. But the widespread backlash against Genetically Modified Organisms (GMOs) has also been good for food grade exports.New food labelling laws pushed sales to Japan to new heights in the crop year ending last September, says Kim Cooper, Ontario soybean board market coordinator. Canada sold 179,000 tonnes to Japan, compared to 75,000 tonnes the previous crop year, with Ontario getting the lion's share.
Cooper says Canada is getting a bigger portion of the one million tonne Japanese soy food market, which has been dominated by the United States. Last year, Canada's share rose to nearly 18 per cent, up from its traditional hold of five to 10 per cent.
New laws in Japan requiring that food be labelled as either GMO or non-GMO products have boosted Canadian sales. Cooper speculates that it may be harder to find GMO-free soyas in the traditional Iowa-Ohio-Michigan growing area, which usually exports to Japan.
"Certainly the whole GMO issue has increased exports into Europe," says John Warner of the export department, soybean sales, at W.G. Thompson and Sons Ltd. Current European labelling regulations require that any soy food or soy drink be labelled if it was made from products containing more than one per cent GMO soys. "All that means is that they aim for zero" in order for it to be labelled as a non-GMO food.
By the end of the year, European Union regulations will likely impose similar rules on feedstuffs for animals, Warner says. Just how stiff those regulations will be remains up in the air, Warner says. "Some say they will be similar to those for soy food. Some say the tolerance will be two per cent."
Warner thinks the sharp rise in demand for GMO-free soybeans will level off. The United States is fighting back with its own programs, he says, and there are a limited number of acres in Ontario that can be devoted to soybeans. "If a grower has terrible weed problems, he's going to go Roundup Ready regardless of what an IP contract may offer. I really believe that."
Besides, two major crushers here take a large percentage of the soybeans that are grown and they readily accept RR soys. "We've seen the big surge," he says. "I think now it will be a steady climb" but at a little slower rate, he says.
Premiums to growers for food-grade soybeans range from 50 cents per bushel for non-GMOs to better than $3 for tofu types that don't yield as well as regular varieties. White hilum premiums generally range from 75 cents to $1 per bushel, he says.
So what should growers plant this spring? "It's a tough call," Warner says. Growers who can manage their weeds conventionally should capture a premium from IP soybeans, asserts. Of course, I have a bias, don't I?" BF
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Despite skewed figures, Canadian soybean sales are at record levels
by DON STONEMAN
The United Kingdom is likely a major buyer of Canadian soybeans, with the emphasis on the "likely." But you'd never know that from looking at the export figures released by Statistics Canada. Britain isn't even listed among the countries that have purchased Canadian soybeans in recent years.Stats Canada doesn't release the figures on sales to some countries because of confidentiality agreements between the exporting companies and the Canadian government, says Kim Cooper, the Ontario soybean board's exports manager. The United Kingdom is one example, and Switzerland is another. It's likely that only a few companies, or perhaps only one or two, sell into Britain and revealing total sales would compromise the positions of those companies.
Do a little calculator work with the figures released by StatsCan and glaring holes are revealed.
For example, soybean sales to Asia from the last crop year totaled 438,856 tonnes. Sales to Western Europe totaled 171,660 tonnes and sales to Africa, Central America, Eastern Europe, Middle East, Oceania, South America and the United States totaled 121,860 tonnes. But export sales from Canada last year totaled 946,360 tonnes leaving a yawning chasm of 213,984 tonnes unaccounted for. Exports to the UK are somewhere inside that gap.
There's other ways that the StatsCan numbers aren't quite correct, Cooper says. He used to work for an Ontario company shipping soybeans by the trainload to Norfolk Virginia to be loaded onto a ship bound for Japan. It was questionable whether the exports were recorded as sales to the Orient or to the United States, he says. Still, he says, "it's the best I've got.
"The numbers are skewed, no matter which way you look at them," the soybean board's Cooper says.
Skewed or not, the figures show that, last year, overall Canadian soybean sales were at record levels, up from the previous three years and nearly twice as much as sales of the 1996-grown crop. That's in spite of sales to Western Europe that were recorded as lower than any of the previous years. Cooper says that may be because crusher soybean sales fell. Commodities trade in a price-sensitive market, he says, and sometimes Canada doesn't do as well in the cross-Atlantic trading.
Identity Preserved program sales have boosted that, he says. Both the companies and the farmers who grow them benefit from the added value of those beans. Both federal and provincial agriculture ministries have helped with trade missions and literature. Companies have made a huge effort on their own with sales efforts. And don't forget that breeding programs from both the private and the public sector have been aiming to give the customer exactly what is wanted in terms of quality.BF
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Solidarity is the key, as eastern producers march in Cornwall
by ROBERT IRWIN
Increasingly, militant eastern Ontario farmers have been helping focus producer pressure from across Canada on the federal government. Corn producers, as well as grains and oilseeds growers, want $300 million they claim Jean Chretien promised them during last November's election campaign. Some insist losses racked up in earlier years mean they can't afford to plant a crop, and many say they won't end the pressure until the government also provides a meaningful long-term income stabilization program.Eastern Ontario producers have staged a series of demonstrations in the counties around Ottawa. County federations across Ontario have held a series of meetings and waged a relentless telephone campaign with their members of parliament.
"I believe the mood has changed," Ontario Federation of Agriculture (OFA) president Jack Wilkinson told Better Farming. At press time, Wilkinson said that there were signs that agriculture minister Lyle Vanclief would come through with the funds, but the exact timing and the amount were still not clear.
A grassroots group in the nine easternmost counties seems to have turned the tide on federal funding with a well-attended demonstration in Cornwall. County federations of agriculture helped organize the long machinery convoy, which delayed traffic on some routes into the city for several hours.
Alain Leduc, a key organizer of the Cornwall event and a cash cropper from Moose Creek in Stormont County, thinks the event convinced politicians to take the farm crisis seriously. "MP Don Boudria had been putting us off, but now all of a sudden he has agreed to meet with us," said Leduc. He hopes press coverage of the Cornwall event will serve as a wake-up call to farmers in other areas. Even dairy farmers are joining the grassroots movement and pledging to stop shipping milk if more pressure is needed Leduc relates.
Nick Parsons, the B.C. farmer who became a celebrity last year by driving his combine to Ottawa, returned again this year. He earned a standing ovation from demonstrators gathered inside the Cornwall Civic Centre when he told the crowd that "agriculture throughout Canada is in a national emergency." Outside, his brightly decorated machine formed part of a collection of 1,135 pieces of farm equipment sporting creative artwork and slogans, which police dubbed "by far the largest farm demonstration" Cornwall had seen. The messages left no doubt that the farmers and farm suppliers who had spent hours getting their equipment to Cornwall meant business.
The crowd in Cornwall was electrified when Wilkinson accepted a controversial three-tine fork from Embrun dairyman and cashcropper Jean Marie Menard. Menard, president of Prescott Russell Corn Producers Association and widely respected for his earlier efforts to build his county federation, has been publicly questioning whether farmers get enough action for the money they pay into farm organizations.
The trident fork Wilkinson accepted has been adapted as the symbol of grassroots organizers and has a centuries-old history among militant European farmers. During the early 1980s, the logo was used by an underground Quebec group which had a brief link with Alan Wilford's Canadian Farm Survival Association. Glengarry farmer Robert Massie, one of the Cornwall organizers, stresses his group has embraced the "symbol of solidarity" the fork implies. "We don't want the violence it has been associated with."
The financial crisis is arguably no worse in the east than in other parts of Ontario province, but frustration levels may be higher because many have friends and relatives on the Quebec side of the border and receive Quebec publications. They are better informed than producers in other areas about Quebec stabilization programs, known by the acronym ASRA. The programs have moderated traditional boom and bust cycles and cover a wider range of commodities than Ontario's under-funded Market Revenue Insurance program.
Robert Perras of Hammond in Russell County has promoted the ASRA model for Ontario pork producers. His resolution on the issue was narrowly defeated at an earlier pork board annual meeting. However, in recent months other Ontario commodity groups and a growing number of pork producers see ASRA as a model for a long-term solution.BF
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Supply management farms far outstrip the rest in 1999 income
The latest StatsCan figures point to a stunning divide between those protected from market volatility and those who are notby BARRY WILSON
If ever the promoters of supply management needed an illustration of how good the system has been in protecting farmers from market price volatility, Statistics Canada has provided it.Every two years, the federal agency does an extensive series of farmer interviews across the country to assess the agricultural balance sheet - incomes, assets, liabilities and investments across sectors and provinces. The latest report, published in late 2000 and based on 1999 research, showed a stunning divide between provinces and sectors which benefit from supply management and those which do not.
Not surprisingly, the survey showed the grains and oilseeds sectors in the worst shape and the two provinces most dependent on those sectors - Saskatchewan and Manitoba - out of sync with evidence of growth elsewhere. Dairy, poultry and egg producers consistently reported the highest net cash farm income in 1999 (revenues minus expenses), ranging from average dairy net cash income of almost $66,000 to a national average of $125,000 for egg farms and $116,000 for poultry farms.
While Quebec and Ontario dairy farms were near the national average, incomes were higher on the prairies where farms are fewer but larger. In contrast, average net cash farm income on grains and oilseeds farms in Canada in 1999 was $24,000. On beef farms, it was $19,000, rising to only $26,500 in the beef heartland of Alberta. Income is the most politically charged indicator of how farmers and agriculture are faring. Those weak numbers in grains and oilseeds, caused in large part by high American and European Union subsidies which induced their farmers to continue high levels of production that drove down prices, leads grain farmers from all provinces to demand more federal help.
Supply management farmers had their own political battles last year, but federal income aid was not one of them. Still, the income disparity was just one Statistics Canada indicator of the chasm between farmers with production and price-setting controls and farmers dependent on volatile and highly political world prices.
Farmers benefiting from supply management also tended to reinvest more in their business and while they generally recorded the highest debt levels, they also had the highest asset values and their equity is growing. Increasing quota values, particularly in dairy, are one of the main reasons.
One paragraph in the Statistics Canada report tells the tale: "All provinces reported higher average total assets in 1999 than in 1997," it said. "Much of the increase for Canada was due to a 35 per cent increase in average total assets in Quebec (to $935,528, reflecting higher dairy quota values) and a 21 per cent increase in Ontario (to $1,001,592, mainly reflecting the increased value of farm land and buildings). Saskatchewan had the lowest increase, at one per cent, to $665,846."
Ironically, the highest average net cash farm income recorded in 1999 was on Alberta dairy farms. There were just 640 of them but they recorded an average net cash income of $133,633.
An Alberta dairy farmer said it simply was a tribute to the wisdom of farmers working together and through their government to win market power.
Amen. BF
Barry Wilson is a member of the Parliamentary Press Gallery specializing in agriculture.
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Insurers predict worse weather losses in the years ahead
by HENRY HENGEVLD
With the dawning of a new year, climatologists have once again polished off their calculators and compiled the climate statistics for the year gone by. While there were no great surprises, results are none the less interesting. What most of us in Ontario will remember best about 2000 is undoubtedly the very wet spring, with the rains of May and June ruining the crop season for many Ontario farmers. However, surprisingly, when averaged over the year, rainfall in the Great Lakes Basin was only 6.9 per cent above normal. Four years during the past decade (1990, 1992, 1995 and 1996) were substantially wetter.That's an important reminder that the impact of rainfall on crops is based not only on averages, but even more so on when the rain falls. At year-end, all of the Great Lakes continue to have water levels below the long-term average, with the upper Lakes still dangerously close to the lowest extremes of the past century. Temperatures in Ontario were again above normal, although rather unspectacularly so. At 0.4°C above average, the year weighed in as the thirteeenth warmest. Summer temperatures seemed particularly benign, with very few extremes at either the high or low end of the normal range.
Nationally, 2000 was the seventh warmest year since 1948, with the last 14 consecutive seasons all above normal. The linear trend for the last half century indicates a net warming over the period of 0.9°C. Regionally, most of southern Canada was only moderately above normal, but northern regions experienced one of the warmest years on record, with the northern B.C. mountains and the Yukon some 1.7°C warmer than the long term average.
This warm weather has added to the concern of the northern aboriginal nations, who have already noticed changes in their regional landscape and in wildlife habits that go well beyond anything recorded within many generations of their peoples' history. To them, climate change is not an issue of the future, but has already arrived.
Across Canada, average precipitation levels were near normal. While Ontario and southern Manitoba may remember the year as a wet one, the Pacific Coast and south B.C. mountains experienced their driest years on record (more than 20 per cent below normal), and much of southern Alberta and northern Ontario also experienced dry conditions.
Globally, despite the cooling effects of La Nina, the year came out as 0.32°C above the long-term average, making it the fifth warmest of the past 140 years. All of the 10 warmest years have now occurred since 1983, and the last 22 consecutive years have been above normal. Furthermore, the past three decades appear to be warmer than at any time during the past millennium. To most climatologists, this is convincing evidence that the world is already shifting into a new climate regime.
One of the key weather features of interest to national governments and the insurance industry is that of extreme weather events and related disasters. In Ontario, the primary concern was the impact of the heavy spring rains (which also indirectly contributed to the Walkerton drinking water disaster). Fortunately, at the national level, there were relatively few major disasters.
However, both Munich Re and Swiss Re (two leading international reinsurance companies) note in year-end reports that, globally, a new record of 850 major loss events occurred, 100 more than the previous record set in 1999. Most of these were weather-related, with the largest events related to wind storms and floods in Asia and Europe. Floods in Britain, Italy and Switzerland, for example, cost national economies and estimated $10 billion US. Forest fires in the United States also resulted in losses in excess of $1 billion.
Fortunately, many of the global disasters occurred in areas with lower population densities than in past years. While the estimated global death toll of 10-15,000, and total estimated economic losses of $30 billion are well above the long-term average, they still pale in comparison to recent years. In 1999, for example, losses were estimated at some 75,000 deaths and $100 billion.
Insurers expect that things may get worse in the years to come, since a shift to a warmer world will bring with it a change in global circulation patterns and an expected increase in weather surprises. As noted in the Munich Re report, "It is feared that the risk situation will deteriorate in many regions of the earth and thus affect insurers too."
Added to the risks associated with more extreme weather are the influences of higher population densities and increased economic wealth in the most vulnerable areas. Insurance companies are worried! BF
Henry Hengeveld is a science adviser on climate change for Environment Canada.
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