No year is perfect, but bumper crops across the province and other positive developments made for a pretty good year
When reflecting on the year just passed, you always hope it’s been good for all producers, and everyone else along the marketing chain.
Alas, that’s rarely the case as our system continues to be based on the rewards and cruelties of supply and demand. Throw in the trials and tribulations of weather and we have business as usual in agriculture. However, for all its vicissitudes, the system works, and amazingly, continues to feed the world.
In 2013, most Alberta crop producers had one of their best years ever. Considering the size of the province, and its different climactic and soil zones, usually some weather calamity hits some farmers somewhere. But this past year saw consistently good harvests across the province, even in the Peace River district — which from personal experience seems to endure a lot more bad years than good ones.
The issue now seems to be moving the bumper crop of cereals and oilseeds to export facilities, which not surprisingly have become plugged. There doesn’t seem to be a solution, but looking at it from the outside one ponders what temporary measures could be used. Of course, the problem always is at what cost.
For instance, potash exports seem to be slowing — could not any idled potash hopper rail cars be leased for a short-term basis? Vancouver has one of the largest coal-handling terminals in the world — could perhaps a small portion of it be used to load a few dozen grain ships directly from rail cars? In the past, there was much talk of using American West Coast ports to export Canadian grain. Whatever happened to that idea?
I would think with the right financial incentive these ideas could suddenly become viable. But I suspect no one from grower to exporter wants to incur any extra costs — so it looks like a ‘grin and bear it’ situation for shipping grain in 2014. I expect as spring comes closer, there is going to be a lot of cheap barley for sale straight from any piles still left on the ground.
It was a different story for the livestock business in 2013. It was a good year for the cow-calf producer with good feed and forage crops, again, virtually everywhere. For the feedlot sector, it was a completely different story, unless you were a custom feeder, most operators lost money consistently almost every month of the year. It would seem timely hedging and patient bankers are all that kept many operators in business. True to form for the gamblers in that business, many figure that cheap corn and barley supplies will turn their operation around. You have to admire their bottomless optimism.
For primary producers, a money-losing feedlot sector is always an ominous sign of bad prices to come. Yet in one of those curious market quirks, calf prices remain steady. However, with the spread in the basis, primary producers figure they are losing out on even better prices. Market crystal-ball gazers maintain that although lower feed prices are welcome, a steady decline in the North American cow herd will be affecting price psychology for years to come. Significant exports of feeder cattle to the U.S. are an indicator of what may well become a much bigger trend. COOL, of course, hangs over the industry’s head.
The hog industry in 2013 has seen a few flurries of profitability, and at least seems to have stabilized. There appears to be 300 significant hog producers left standing in Alberta after 10 years of downsizing. Cheap feed may help those determined survivors, but there is cheap feed in every hog production area. Plans to resuscitate the industry have come and gone — its future remains tenuous.
Lamb production, which was the darling of the livestock business for a few years because of high prices, came down to earth in 2013. The processor and consumer threshold of price pain had been crossed and that industry is also back to price reality. One hope is that there are now some successful large-scale producers in business in Western Canada. That hasn’t happened for over 80 years, and would be a good sign for the industry.
Much has been heard this year about the tentative Canada-Europe free trade agreement. I’ve acknowledged the potential of the agreement in past columns, but cautioned that it’s far from a done deal. I’d once again note that Europe is already well supplied with everything it needs and wants by longtime suppliers, both domestic and foreign. If a fair agreement is ever signed, Canadian exports will increase, but it will be a hard fight to dislodge traditional suppliers.
The draft South Saskatchewan Regional Plan was released in 2013, and as expected, proved to be somewhat vague and also disappointingly naive in some perspectives of agriculture. The absence of any vision or genuine recognition of irrigation agriculture in the plan is a real message for that sector and agricultural development in general. One fears these regional plans are going to be dominated by urban-based environmental and recreational interests.
One idea may be to get the ag industry unified on the issue in a similar fashion as the straw men did with their beef industry initiative. We need such leaders and promoters for a full court PR press to protect ag interests within the context of these regional plans. Green and wildlife groups have the money and expertise to overwhelm the direction of the draft plans and regional meetings. More plans are expected to be released in 2014, of particular interest to the ag sector will be the Red Deer River watershed plan.
Floods were another major story in 2013, although the impact on ag production was limited. But it showed a real need for better flood control measures, which could include more dams and reservoirs that could have an impact on the ag industry. The problem, as always, with floods is that last year’s event will be forgotten until the next catastrophe. It seems to be human nature. Commonsense ideas, such as diversionary pipelines and floodways, are already being dismissed as too costly and impractical.
It was a good and interesting year and one wonders how 2014 could top 2013. One way or another something will. It’s just the nature of this wonderful business. Happy New Year.