He noted the Corn Belt didn’t quite get the heat in July and so far in August that had been forecast and with rain to come he said, “everything is just ideal.”

“Anyone catching some rain from this point on to the end of the month, that’s going to be beneficial to corn and soybeans,” Capinegro added.

In turn, that played into the recent downward trend for soybeans and corn futures at the Chicago Board of Trade. The broker said the increases both commodities had on Aug. 14 were most likely a ‘dead cat bounce’ and the declines would soon resume.

Capinegro said the August supply and demand report from the U.S. Department of Agriculture pegged soybean ending stocks for 2024/25 at 560 million bushels, up from July’s estimate of 435 million.

“We’re in the camp that’s going to go to 600 million just because they’re overstating exports,” he stated, which would be well above the 2023/24 carryover of 345 million bushels.

However, Capinegro theorized the USDA could be factoring in an assumption that soybean prices are going to fall further and in turn that would generate greater exports.

He also suggested that soybean futures could feel more pressure should Brazil’s next crop get off to a good start. He said it’s likely there will be more soybean acres planted in Brazil for 2024/25, but not to any great extent.

The broker noted the Pro Farmer crop tour is set to begin Aug. 19, with the trade keeping an eye on the results.

The post CBOT Weekly: Conditions for U.S. soybeans, corn ‘just ideal’ appeared first on Alberta Farmer Express.

The measure, part of this spring’s federal budget, essentially gives grain shippers a choice in which railway they deal with, as long as the competitor’s line is no more than 160 kilometres away. It means a railway would have to pick up rail cars loaded by the shipper and hand them off to the other railway.

“Extended interswitching is a vital tool for Canadian shippers that is proven to increase competition while lowering costs to shippers and consumers,” Alberta Wheat tweeted in support of the Flip the Switch campaign.

The commission, along with Alberta Barley and Alberta Pulse Growers, has joined a dozen other commodity groups and industry organizations in the lobbying campaign. They want the budget pledge of an 18-month trial extended to five years, and the maximum distance for interswitching upped to 500 km so it applies to the Peace Country and northeastern Saskatchewan.

“Extended interswitching is one of the only policy tools that has historically created competitive options for shipper business,” Wade Sobkowich, head of the Western Grain Elevator Association, said in a release.

“It offers an alternative service provider for single-served shippers, which balances negotiations in a way that encourages better service or pricing for the benefit of entire supply chains.”

The railways disagree.

“Extended regulated interswitching is inherently inefficient because it introduces more operational complexity to the movement of railcars as it unavoidably requires additional hand-offs for railcars between carriers, which in turn causes increased cycle time,” Canadian Pacific Kansas City (the new name for CP Rail) said in a response to the interswitching proposal.

“Overall, this slows down the entire rail supply chain and reduces capacity because it introduces inefficiencies that could otherwise be avoided.”

It typically takes an additional 24 to 48 hours for interswitching, said the railway, adding a move to 160-km interswitching in 2014 (that lasted four years) caused “significant harm to Canada’s supply chains.”

The grain group alliance calls this a “myth” on its website (interswitching.ca), arguing it actually improves efficiency.

“Extended interswitching will reduce congestion by moving traffic from a full capacity railway to a railway with excess capacity,” the website states.

And bringing a measure of competition to the country’s rail duopoly has been shown to cut freight bills, the group contends.

“Data is clear that the increased competition from extended interswitching reduces costs for shippers who are using the rail network.”

The website also has an e-letter that producers can send to their MP. In addition to backing a five-year pilot and a 500-km interswitching distance, the letter urges the federal government to “invest in rural rail infrastructure that can accommodate larger trains to expand the use of interchanges.”

The post Go bigger on interswitching pilot, grain groups urge Ottawa appeared first on Alberta Farmer Express.

Steve, chief operating officer Syeda Khurram and FarmCash program manager Hasan Kazmi were all dismissed on April 26. The two cereal groups didn’t announce the dismissals, and when the news broke two days later, only said there had been “a change in direction of its senior leadership team” without naming the three individuals.

Alberta Barley chair Tara Sawyer later said the boards of both farm groups “confirmed the change” but would not be releasing any additional information.

“As our board deliberations are confidential in nature, we do not discuss or comment publicly on the nature of these meetings,” Sawyer said in an email.

In a separate statement, Alberta Wheat chair Greg Sears acknowledged the situation was challenging.

“These events have caused emotional and mental hardships on many, and for that we feel a responsibility to correct course and work with new leadership that promotes a positive culture that continues to serve the needs of our stakeholders, delegates and farmers,” Sears stated in an email to The Western Producer.

The unexpected ouster prompted many questions, with veteran insiders such as former Alberta Wheat chair Gary Stanford getting numerous calls.

“I got a phone call that said Tom and Syeda were let go, and I said, ‘what happened?’ and they said it’s confidential,” the Magrath-area producer said a few days after the news broke.

“I don’t know what happened. I’ve been trying to figure it out myself. I’ve had lots of people phoning me and people from other farm organizations asking what happened. I wish I knew myself.

“I don’t know if it was staff or board members in conflict, I don’t know. But something major must have gone down. You don’t get rid of the bosses unless something happened.”

In a later interview, Stanford said he hadn’t learned anything more and had not been able to contact Steve.

Kevin Auch, another former Alberta Wheat chair, said the whole thing was surprising.

“I don’t know what to say besides that,” said the Carmangay area farmer. “It’s one of those things you don’t expect.”

That may have been true for Steve himself.

On the day he was dismissed, he gave a lengthy interview to CTV news show Alberta Primetime discussing — in his typical down-to-earth and calm manner — a host of topics from the effect of the public service strike on grain exports to spring seeding and moisture conditions.

Steve has regularly been praised over the years by members of the two farm groups for his management skills and leadership qualities.

He featured prominently in a recently released Alberta Wheat video celebrating its 2012 founding. In the video, Steve talks about his involvement in a host of initiatives, including helping the group become a national player in development of farm policy following the end of the wheat board; a major expansion of funding for farm research; and merging first the offices and support staff and then the management teams of the two groups.

Steve was hired by Alberta Wheat in 2014 and became general manager of both groups in 2017. He previously ran the Saskatchewan Wheat Development Commission and worked for Viterra and Agricore United.

The two commissions are set to formally amalgamate on Aug. 1 and one source said Steve was set to retire once the amalgamated organization was up and running.

Alberta Farmer attempted to reach Steve and Khurram but was unsuccessful.

The paper also asked to view minutes of recent board meetings of both Alberta Wheat and Alberta Barley, but that request was declined. Agricultural commissions are required to provide meeting minutes to the Alberta Agricultural Products Marketing Council but “there is no requirement to post these publicly,” a government official said.

Wheat and barley producers need to continue to have confidence in the boards, said Auch.

“I guess things happen and the board must have had their reasons. You just need to trust the board and that they knew what they were doing. I’m sure they didn’t take that decision lightly.”

Meanwhile, the amalgamation will go ahead on schedule, said Sears.

He and Sawyer are now effectively the senior decision-makers in the two organizations and are listed on the staff pages of their websites. The duo, along with Alberta Wheat vice-chair Jason Lenz and second vice-chair Shawn Jacula, also sit on an executive council overseeing the soon-to-be-merged groups. The executive council along with the two boards are working “to ensure a smooth course of business while a thorough search for a replacement is conducted,” the groups said.

Sears said the FarmCash program is operating well and there are no known issues with it. It is audited regularly, most recently in the year ending Jan. 1, 2022.

The post Silence follows in wake of ouster of farm groups’ senior managers appeared first on Alberta Farmer Express.

The measure, part of this spring’s federal budget, essentially gives grain shippers a choice in which railway they deal with (as long as the competitor’s line is no more than 160 kilometres away). It means a railway would have to pick up the rail cars loaded by a shipper and ‘hand off’ the cars to the other railway.

“Extended interswitching is a vital tool for Canadian shippers that is proven to increase competition while lowering costs to shippers and consumers,” Alberta Wheat tweeted in support of the Flip The Switch campaign.

The wheat commission, along with Alberta Barley and Alberta Pulse Growers, has joined a dozen other commodity groups and industry organizations in the lobbying campaign. They want the budget pledge of an 18-month trial extended to five years, and the maximum distance for interswitching upped to 500 km, so it applies to the Peace region and the Carrot River growing region of northeastern Saskatchewan.

“Extended interswitching is one of the only policy tools that has historically created competitive options for shipper business,” Wade Sobkowich, head of the Western Grain Elevator Association, said in a release.

“It offers an alternative service provider for single-served shippers which balances negotiations in a way that encourages better service or pricing for the benefit of entire supply chains.”

The railways disagree.

“Extended regulated interswitching is inherently inefficient because it introduces more operational complexity to the movement of railcars as it unavoidably requires additional hand-offs for railcars between carriers, which in turn causes increased cycle time,” CPKC, the railway formerly known as Canadian Pacific Railway, said in a response to the interswitching proposal.

“Overall, this slows down the entire rail supply chain and reduces capacity because it introduces inefficiencies that could otherwise be avoided.”

It typically takes an additional 24 to 48 hours for interswitching, the railway said, adding a move to 160-km interswitching in 2014 (that lasted four years) caused “significant harm to Canada’s supply chains.”

The alliance of grain groups calls this a “myth” on its website, arguing it actually improves efficiency.

“Extended interswitching will reduce congestion by moving traffic from a full capacity railway to a railway with excess capacity,” the website states.

And bringing a measure of competition to the country’s rail duopoly has been shown to cut freight bills, it contends.

“Data is clear that the increased competition from extended interswitching reduces costs for shippers who are using the rail network.”

The farm groups’ website also has an e-letter that producers can send to their MP. In addition to backing a five-year pilot and a 500-km interswitching distance, the letter urges the federal government to “invest in rural rail infrastructure that can accommodate larger trains to expand the use of interchanges.”

— Glenn Cheater is editor of Alberta Farmer Express.

The post Go bigger on interswitching pilot, grain groups urge Ottawa appeared first on Alberta Farmer Express.

But while many producers grow pulses (at least some of the time), the nitrogen-fixing legumes run far behind canola, wheat and barley in the crop popularity sweepstakes — something new Alberta Pulse chair Shane Strydhorst readily acknowledges.

“Despite the high cost of nitrogen fertilizer, many of the other crops are still profitable for people,” said the Neerlandia-area producer. “I think a lot of people get in a habit — they see efficiencies in growing cereals and canola, and they think it’s risky to try something new.”

Canola and wheat take turns topping the acreage charts in Alberta, with each grabbing roughly a 30 per cent share of crop acres. Canola won bragging rights last year with 6.5 million acres to wheat’s 6.4 million. Barley was a distant third at 3.5 million acres (a 16 per cent share) but that was far ahead of peas (1.3 million, 6.1 per cent) and lentils (550,000 acres, 2.5 per cent).

In fact, after averaging 2.3 million acres in the five-year period from 2016-20, pulse acres of all types in Alberta fell to less than 2.1 million acres in 2021 and declined further last year, edging slightly below the two million mark (1,997,500 acres according to StatCan).

But the ‘give peas a chance’ slogan used to promote pulse crops has a lot of merit, or in Strydhorst’s case, faba beans.

While barley was the most profitable crop on his farm in 2022 and wheat was the most profitable in 2021, faba beans were the most profitable in both 2020 and 2019.

“They grew better than any other crops in the conditions, and the marketing options were good,” Strydhorst said. “When you put seed in the ground, you don’t really know which crop will perform the best or have the best options on the marketing side.”

But the agronomic benefits are clear, he added.

“Obviously, in terms of nitrogen fixation, the benefits are remarkable. On our farm, we’re seeing two years of yield advantage following a faba bean crop.”

Beverley Wieben has also noticed a big advantage on her farm from growing pulse crops.

“If you want to save on inputs, pulses are an excellent choice,” said Wieben, who is a director at large on the pulse growers’ board. “They can be a good choice this year when fertilizer prices are really high.”

Wieben tried several pulses before settling on peas at her farm in Fairview.

“It’s good in the rotation and when the price is right, it does pay off,” she said. “It’s one of the first crops to be combined, and so from a cash flow point of view, it’s good for the farmer to grow. Payment comes quicker and you can start paying your bills in August instead of September or October.”

Agronomic challenges

Making nitrogen-fixing legumes part of every farm’s rotation would help achieve the federal government’s goal of reducing nitrous oxide emissions by 30 per cent by 2030.

Nitrogen fertilizer accounts for the lion’s share of all nitrous oxide emissions in a field, according to University of Manitoba soil scientist Mario Tenuta, one of the country’s leading experts.

“The emissions of nitrous oxide can be reduced by around 60 per cent under a pulse crop that fixes its own N,” Tenuta said in a recent interview.

But there’s also a major challenge in growing peas and lentils — aphanomyces root rot. It can be rampant in wet years, but can also cause damage in dry ones, and the spores that produce the pathogen can persist for years.

“Alberta Pulse Growers Commission is very aware of these issues and is continuing to invest a lot of research into new solutions,” said Strydhorst, adding “we have tips for assessing the risk of root rot on our website.”

The farm group is taking a multi-pronged approach to boosting pulse acreage, said research and extension manager Jenn Walker.

“We’re making sure that we are invested in breeding programs for varieties that address the needs of farmers themselves, that it makes more sense to grow so we can deal with disease issues and focus on making sure that we can grow a profitable crop, so yields are sufficient enough.”

Not all pulse crops are well-suited to all areas of the province so the organization is working to expand the number of options for growers across Alberta, added Strydhorst.

For example, the commission has invested heavily in faba beans, and found they are a great option for growers in areas such as Barrhead, Stony Plain, Fort Saskatchewan and Smoky Lake.

“We’re doing work to see if lupins can be adapted to grow in other regions of the province too, so farmers have more options to try different crops,” he said. “We’re also hoping to expand the growing areas of lentils and chickpeas, so that more areas besides the south can grow them.”

The goal is to ensure there is a strong pulse option available to every farmer, said Walker.

“Part of that (increasing pulse acres) … is making sure we’re testing crops outside of our traditional pea rotation so that for every environment and management style, there’s a pulse available,” she said.

Strydhorst said he and wife Sheri were inspired to start growing faba beans in 2006 after they saw some on a plot tour and heard about the benefits firsthand.

That approach — organizing regional engagement meetings and hosting plot tours — is a key part of the plan to increase pulse acreage in the province.

“I think it’s important for us to stretch our rotations a little bit, to get another crop in there,” said Strydhorst. “As some of those disease and pest issues build up a little, people will have to stretch their rotation and try a new crop. Maybe it’s lupins, maybe it’s faba beans.”

The commission, along with its national and provincial cousins, is also delving deeper into the environmental benefits by conducting life cycle analyses, added Walker.

“That’s pulling in the entire story, particularly as the environment and carbon are becoming more and more embedded in conversations we’re having in agriculture,” she said.

“We know that when you include pulses in your rotation, you’re carbon negative on your farm. And that’s huge, really.”

The post Pulse crops struggle to keep up in the crop popularity sweepstakes appeared first on Alberta Farmer Express.

“The pie is going to get bigger — and we want everyone to benefit from it,” said Stéphane Beausoleil, an executive of Préval Ag who is now running the former SunGold lamb processing plant in Innisfail. “We’re very excited to be here.”

Although little known in the West, Préval Ag is an emerging powerhouse in the meat sector, with 42 divisions (mostly in eastern Canada and the U.S.) that employ 1,600 people and generate $750 million in annual sales.

Beausoleil said the company has big plans for both the Innisfail plant and a large lamb feedlot at Iron Springs, which it purchased last month after the former owner went into creditor protection.

That includes refurbishing the Innisfail plant (formerly called SunGold and rechristened Westfine Meats) that currently processes 80,000 to 85,000 lambs a year, said Beausoleil.

“It was kind of let go over the last couple of years,” he said. “We will be investing in the next couple of months and for the long term, too.”

The company wants to increase production by sourcing more lambs from both Alberta and Saskatchewan.

“At the end of the day, there were a lot of lambs going to Ontario,” said Beausoleil. “We want to stop that. Our goal in year one is to stop 50 per cent of that. If we achieve that at the end, that will be a pretty good number for us and we’ll be pretty happy with this.”

Company officials began meeting with producers even before formally taking over the plant near the end of last month.

“We already had a meeting in early January with Alberta producers, and Saskatchewan producers as well,” said Beausoleil, adding the meetings were very positive.

Alberta Lamb Producers declined a request for comment but a large sheep producer from Saskatchewan welcomed the arrival of Préval Ag, which bills itself as the largest integrated lamb and veal company in North America.

“I’m excited and I think it’s great,” he said. “They’re wanting to work with producers. The producers who have been working with them, they’re wanting to keep them going. They want to get more people and work with them.”

But the lamb sector in both Alberta and Saskatchewan is fractured, said the producer, who requested anonymity in order to speak candidly.

Many producers operate on a small scale and won’t share Préval Ag’s ambition to grow the sector by producing high-quality animals year-round, he said.

“Barely anyone wants to work with this,” said the producer, adding many are happy with the status quo. “You raise your lamb, get it picked up on this day, they’re gone and then you get your cheque.”

Ontario is the biggest producer of lambs in the country, with a roughly 30 per cent share, with Alberta in second spot (24 per cent) and Quebec close behind (20 per cent).

But StatCan’s twice-yearly survey data also shows the seasonal nature of the business. While the number of sheep over the age of one year stays steady all year long, the number of lambs fluctuates dramatically.

StatCan says there were 520,000 lambs on Canadian farms on July 1 of last year, but only 300,000 at the start of the year. It’s a story repeated annually in every province — in Alberta last year, there were 124,000 lambs on July 1 but just 55,000 on Jan. 1.

Quest for steady supply

Producing slaughter-ready lambs year-round was the main objective of the former owner of the Innisfail processing plant.

The North American Lamb Company (a joint venture between a New Zealand company and Alberta investors) said its business model would accomplish that — and that was going to revolutionize the lamb sector in Western Canada.

The company had breeding and lambing operations at four locations in Manitoba and the business plan was centred on shipping feeder lambs to its feedlot at Iron Springs for finishing.

However, the enterprise was a serial money loser and last summer went into creditor protection owing more than $50 million.

While Préval Ag bought the feedlot (via a separate division, West Excelamb), it didn’t buy the Manitoba lambing barns. But the company will be encouraging producers to lamb throughout the year, said Beausoleil.

“We put a lot of work and focus on planning and making sure we have year-round supply,” he said. “The message that we sent to these people is that we want to grow with them. It’s important that we have a strong producer base that can survive all year long. We want to provide lamb all year.”

Quality could also be an issue. When the North American Lamb Company launched in 2018, its then president criticized the quality and consistency of lamb carcasses. But improving quality takes an investment in genetics and production methods, said the Saskatchewan producer.

“I put a lot of money and resources, and my breed is based off making a good carcass,” he said, questioning how many other producers would be willing to do the same.

But Préval Ag, which started as veal operation (and is still run by brothers Fabien, Donald and Alexandre Fontaine), has a long history of working with livestock farmers, said Beausoleil.

“We’re producers so we understand their challenges and their needs,” he said. “At the same time, we’re processors. There’s no magic recipe. You have to work together in collaboration.

“Producers have to make adjustments on their side to work with us. So far, the response has been very good.

“They’ve been very open and happy about us taking over.”

Westfine Meats has established its grading and pricing index for the year, he added. All of the existing employees have been offered jobs and the company will be keeping the SunGold and Lamb Tonight brands.

“The brand is recognized, and we don’t want to change that,” said Beausoleil. “This is our first operation in Western Canada. We have other operations in the U.S., we are quite familiar with other markets. We already service some customers out here from our Montreal operations.”

Préval Ag has a host of divisions, some it started and others purchased, and sells a range of products, including veal, beef, lamb, and vegetables. Its brands include Famille Fontaine (ready-to-eat veal products), Catelli Brothers (an American meat company selling to both food service companies and retailers), and Ontario’s Cohn Farms, a produce distributor.

Having a company with that sort of business experience and financial wherewithal is good news for the lamb sector, said the Saskatchewan producer.

“I think this is the best chance we have had to make money in the last how many years,” he said.

The post Quebec company aims to boost Alberta’s lamb sector appeared first on Alberta Farmer Express.

“They seem to run a fair-sized conglomerate of businesses related to agriculture and the livestock industry,” said Neil Narfason, an official with Ernst & Young who is a court-appointed monitor overseeing the sale. “They’re a known name in the industry for sure.”

However, most consumers, even in the markets it serves, probably don’t know the Préval Ag name.

The company has sales of more than $720 million annually, but much of that is under the brand names of companies it has either created or acquired. It’s run by three brothers who began by starting a veal farm and have since grown the company into the largest integrated veal and lamb supplier in North America with three dozen divisions including beef, poultry, vegetables, field crops, grain processing, and transport.

A spokesperson said the company would have no comment until the purchase — Préval Ag’s first in Western Canada — officially closes.

The sale to two newly created divisions of Préval Ag, WestFine Meats and West Excelamb, is slated to be completed on Jan. 27, Narfason said.

The deal is good news for lamb producers, as the Innisfail processing plant formerly known as SunGold Speciality Meats is the only federally inspected plant in Western Canada.

Narfason said he got calls from producers who were anxious about the future of the facility, which continued to operate after its former owners — a New Zealand company and Alberta investors — sought creditor protection.

“Everyone wanted the Innisfail plant to continue,” said Narfason. “It’s welcome news that the plant continues, and continues to be an option for producers, especially western Canadian producers.”

The new, almost-owners want to encourage lamb production on the Prairies, he added.

“The buyer of the plant recognizes the key producers in Western Canada and how important it is that they have enough volume,” said Narfason.

It isn’t clear whether the new owners will want to revive the bid of the former owners to create a business able to supply fresh lamb year-round.

The North American Lamb Company was created by merging the Manitoba lambing barns owned by a major New Zealand lamb company with the Innisfail and Iron Springs facilities owned by Alberta investors.

By lambing indoors and finishing animals at Iron Springs, the goal was to provide a steady year-round supply of lamb for the Innisfail plant.

However, the enterprise never made money and by the time it sought creditor protection last summer, it owed nearly $53 million to creditors, more than 90 per cent of that to lenders FCC, Bank of Nova Scotia and a Canadian division of the New Zealand company.

The sale price of the Alberta assets have been sealed by the court at the request of the Ernst & Young monitors.

The sudden collapse sent the local lamb industry into a state of uncertainty and worry. But things have unfolded better than many anticipated.

“I don’t think the restructuring or insolvency of the North American Lamb Company had a lot of impact on the market,” said Narfason. “At the start, there was a lot of concern that we would flood the market with a bunch of animals. That never really happened. We were very cognizant of not crushing the market.”

While some sales took place in Alberta and Manitoba, a large number of animals were sold to eastern Canadian buyers, he said.

As well, all producer contracts with the Innisfail plant were honoured throughout the fall and winter, creating little disruption, said Narfason.

Préval AG, headquartered in Saint-Hyacinthe (just east of Montreal), has more than 1,400 employees, many working for companies it has acquired. Its products include veal, lamb and beef sold under brands such as Famille Fontaine and Catelli Brothers as well as market vegetables and grain. The company was founded by Fabien Fontaine, who was joined by his brothers Donald and Alexandre.

The post Alberta lamb sector gets boost as Quebec powerhouse moves in appeared first on Alberta Farmer Express.

“Special Areas has everything it needs to become a highly productive agricultural area – everything except a reliable supply of water,” Jordon Christianson, chair of the Special Areas board, said in a Dec. 5 news release.

“This project could reinvent what agriculture looks like in east-central Alberta, bringing new opportunities to producers passionate about agriculture.”

A preliminary report released with little fanfare in late August backed that view, saying there is enough water available in the Red Deer River to irrigate 108,000 acres in the region.

But it comes with a steep price tag.

“In total, the probable capital cost of the project (at full buildout for 108,000 acres based on current conceptual design assumptions) was an estimated $1.3 billion, including 20 per cent contingency and 15 per cent for engineering,” said the preliminary report by Calgary-based consultants WaterSmart.

[RELATED] Irrigation districts laud provincial support of sector

That prompted the announcement earlier this month of a more detailed $7-million feasibility study funded by the province and MD of Acadia, which is getting a loan from the federal Canada Infrastructure Bank for the work. It will include preliminary engineering design, environmental and regulatory considerations, and potential financing options. This work is expected to take up to 24 months to complete.

The 108,000-acre project (49,200 acres in the MD of Acadia and 58,900 acres in Special Area No. 2) would be the maximum size. Shrinking it to 81,000 acres (by removing the highest-cost land to irrigate) would reduce the “probable” cost to just over $1 billion. Cutting it further to 49,200 acres (by developing in the MD of Acadia only) would reduce the cost to $387 million, the WaterSmart report states.

However, the potential cost for all three scenarios falls into a wide range. The 108,000-acre plan could cost anywhere from $1.2 billion to nearly $1.7 billion, the preliminary report states.

Big by any measure

“A large-scale irrigation project would increase water security and bring major economic benefits to agricultural producers while also enhancing recreational opportunities in the area,” Acadia reeve Peter Rafa said in the release.

[RELATED] The numbers keep getting bigger for irrigation

The WaterSmart report says that without the project, the economic outlook for this part of Alberta is not promising.

“Compared to the rest of the province, the region has seen a significant drop in natural gas production over the past five years,” the report states. “Projections indicate that gas production will continue to decrease by 57 per cent between 2020 and 2030 for the southeastern Alberta region.

“As a result of these significant changes in economic development opportunities, the population in these communities is forecasted to decrease more than anywhere else in Alberta over the next 25 years.”

If the full version of the irrigation project went ahead, it would cost even more than the $933-million expansion of irrigation in southern Alberta that is now underway. The province and nine irrigation districts (which also received a low-interest loan from the Canada Infrastructure Bank) have partnered on “the largest investment of its kind in Alberta history.”

There are a series of projects, some already completed, to replace canals with pipelines, build new reservoirs or expand existing ones.

Although the cost of the southern Alberta project is lower, it will add more irrigation acres — about 230,000 in total.

The 108,000-acre plan in the southeast would see irrigation in four “blocks” north and northwest of Medicine Hat in an area encompassing Hanna and Oyen. It would involve an intake and pump station on the Red Deer River, pipelines and two reservoirs (Reservoir A1 and Prince’s Spring Reservoir).

The potential benefits are enormous, Nate Horner, minister of the newly renamed Agriculture and Irrigation department, said in the news release.

“Historically, irrigation has been a game-changer when it comes to increasing sustainable primary crop production,” said Horner. “The east-central project has the potential to help grow the agri-food sector and support a diversified value-added processing industry.”

The WaterSmart report found there is enough cultivated land of suitable quality in the region and the project would not include native grasslands. It also said there’s enough water available for allocation in the Red Deer River Basin to support the project, with reservoirs on both sides of the river being “conceptually feasible” at the size required to support estimated irrigation demand.

The total operating expenses are estimated to range from $180 to $300 per acre annually, assuming a direct grid connection and market electricity rates for the project’s power supply. The per-acre price tag (not including on-farm costs) is estimated at $12,300 per acre for the 108,000-acre version.

The next step is to drill down into those numbers. The $7-million second phase of work will include optimizing the design, securing a water licence, preparing for regulatory approvals and refining the business case. The consultants also recommended that seasonal geotechnical and environmental field work be prioritized in preparation for design and regulatory applications.

Alberta is home to more than 1.8 million irrigated acres. A 2021 study found that Alberta’s irrigation districts create about 46,000 jobs and contribute about $5.4 billion in total gross domestic product.

The post Alberta eyes another blockbuster irrigation project appeared first on Alberta Farmer Express.

Land prices jumped 5.9 per cent in Alberta in the first six months of 2022, according to the latest data from Farm Credit Canada, and that was smallest rise on the Prairies. 

Prices were up an even six per cent in Manitoba and 8.4 per cent in Saskatchewan. Ontario, Quebec and P.E.I. saw double-digit jumps, with Ontario leading the way at 15.6 per cent. 

“Strong farm cash receipts, buoyed by robust commodity prices, have managed to quell some of the profitability challenges from higher interest rates and farm input costs,” said J.P. Gervais, FCC’s chief economist. 

However, more than half of the interest rate hikes occurred after the ag lender’s latest survey. The Bank of Canada has increased them by three percentage points since the start of the year and has said more increases are inevitable. 

“An increase in interest rates is obviously going to reduce demand for farmland,” said Chad Lawley, agricultural economics professor at the University of Manitoba. “It increases risks for those who are already over-leveraged.” 

[RELATED] Over half Canada’s farm revenue now goes to biggest farms, census finds

While it’s been a long stretch of rising farmland prices, they have dropped sharply in the past, he noted. 

“Big increases in interest rates could cause big decreases in farmland prices, or at least they did in the past,” said Lawley. 

However, he isn’t predicting a repeat of the 1970s and ‘80s.

“I don’t know how out of control inflation is going to get, I don’t know where interest rates are going to go, and commodity prices remain strong,” said Lawley.

The 1980 farm crisis occurred when debt was high, inflation was rampant and interest rates rose dramatically to control inflation. Land values plummeted and there were many farm foreclosures. 

A repeat of that scenario doesn’t seem probable in today’s climate, said Gervais. 

“Nothing is impossible but I don’t think this is likely,” he said. There’s little doubt that higher borrowing costs will slow demand for farmland, but with rising farm incomes, Gervais said he is certain any repeat of the 1980s situation should be avoidable. Farm cash receipts climbed 14.6 per cent year-over-year for the first half of 2022, and with strong commodity prices, receipts are projected to increase 18 per cent relative to 2021.

“I think the outlook remains optimistic,” said Gervais. “When you think about the 1980s farm crisis, what made it a crisis (was) not only the high rates but also the low commodity prices.” 

While ag commodity prices may soften, he believes a crash is highly unlikely. 

“I have to work really hard to find a scenario in which we’re going to see prices collapse,” he said. “A lot of things can bring volatility to the marketplace. There are some scenarios in which you could see prices coming down, but it’s all about probabilities. 

“And I would say right now, there’s a higher likelihood of prices that remain elevated.” 

Still, farmers should consider the impact that lower commodity prices and higher interest rates could have on their business, said Gervais. 

On a year-over-year basis (as of the end of June), Alberta farmland prices are up 5.8 per cent and that’s well behind its prairie cousins, which are up 14 to 15 per cent. 

But prices here remain higher than in Saskatchewan and Manitoba, and the long-term rise has been extremely steep, according to FCC data. 

Back in 1996, the price of a dryland acre was minuscule compared to today: $324 in the Peace, $421 in the south, $494 in northern Alberta and $748 in the central part of the province. Irrigated land was the most expensive but averaged just $781 an acre. 

Over the next 15 years prices went up by two to three times for dryland, and irrigated land prices quadrupled. In 2011, bidders turned on the jets. 

By last year, $100 was a rounding error, with prices (compared to 1996) up more than six-fold in central Alberta ($4,900 an acre), more than sevenfold in the Peace and north ($2,400 for the former and $3,600 in the latter), and tenfold in the south ($4,400). 

Irrigated land in the south averaged $11,500 an acre, a whopping 1,472 per cent rise.

The post The price of farmland is defying interest rate hikes – so far appeared first on Alberta Farmer Express.

The two big questions are whether the massive flock owned by North American Lamb Company (NALCO) will flood the market and send prices into a tailspin and whether its lamb processing plant at Innisfail, the only federally inspected one in the West, will stay in business.

[READ MORE] Lamb company had big ambitions but was never profitable

“Right now, it’s essentially going to cause price fluctuations,” said Alberta Lamb Producers chair Brittany Walker, who has a flock of 300 sheep near Strathmore.

“About 35,000 head could flood the market unless they go as breeding stock. There is a potential for prices to decrease.”

The company was given creditor protection last month but all of its facilities — its Innisfail processing plant (formerly known as SunGold Specialty Meats); a breeding unit and large feedlot in Iron Springs; and sheep and breeding operations at four locations in Manitoba — are still operating. Ernst & Young, the court-appointed monitor, is overseeing the company while it is under creditor protection.

“The best hope would be to spread the sale of the flock over an extended period of time to not oversupply the market in the fall run period,” said Walker. “With so much uncertainty surrounding the outcome of NALCO and its subsidiaries, this creates an unpredictable future market for the sheep industry.

“Typically, prices are worse in the summer, … but they are dropping quite a bit more than they have in previous years.”

Efforts are being made to protect the small Canadian lamb market, said Neil Narfason, one of two Ernst & Young officials overseeing operations of the troubled company.

“We’re trying to be careful about not killing the market,” he said. “The (breeding) ewes are the toughest part. Feeder lambs and lambs are pretty straightforward.

“We need to be careful about how to sell animals and that we aren’t depressing the market. We need to sell at good pricing and have enough interest at buying, so there will be a recalibration as you redistribute the number of animals through a number of different producers.”

Big plans went south

When launched in 2018, the company’s president criticized the way the lamb sector operated and said NALCO would revolutionize it by offering a consistent product (lambs with the same genetics raised the same way) on a year-round basis. The latter would be accomplished by breeding ewes continuously in indoor facilities, it said.

The Iron Springs feedlot and SunGold plant were merged with the New Zealand company’s Manitoba facilities but the joint venture never made money. And in its final few months, the members of the divided board as well as the company president resigned amid bitter wrangling.

Since the news broke in early August, Walker and her association have fielded numerous calls and emails from worried producers.

“At this point, Alberta Lamb Producers is not really certain about what is going on,” said Walker.

“They are operating to a certain date. That date might change, but it’s business as usual at this point. That comes with a lot of uncertainty.”

There are fears about the future of the Innisfail plant, the only federal lamb processing facility in Western Canada and the only one able to process large numbers of animals.

“There are other processors, but they aren’t doing the same volume by any means,” said Walker, adding there are about 30 provincial plants that process lamb, but they are generally small and also process other livestock.

“Depending on what happens to the plant, that will have an impact on producers, but until that is dealt and sorted with, we can’t say if it will be a negative or a positive. If it’s maintained, that will be better for producers, because we will have a competitive market.”

Sending animals to a federally licenced processing plant in Ontario, so the lamb products can be sold nationally, is an option but not a great one.

“If there’s no domestic market and no (domestic) processing, then we’re sending them to Ontario and we are at the mercy of the Ontario price,” she said. “They can set it at what they want. It costs a lot to ship lamb out to Ontario.”

‘Lots’ of buyer interest

Narfason said the sale of the plant is a priority, and they would like to sell all the operations together, if possible.

“Once we have all these bids in, we would negotiate,” he said. “If we have a buyer for everything, that’s easy. If we have multiple buyers and components, we will negotiate agreements and go back for court approval and close these deals. The idea is to try to close everything to new buyers before Christmas.”

Walker said she is hopeful a new owner will be found.

“There would be a concern if there were no buyer for sure, but they are pretty confident they will find a buyer,” she said.

“But there’s no reason to believe that we cannot continue operating,” added Narfason. “It’s a restructuring, so no employees have left the plant. They’ve got a great team and it continues to hum along. Producers are selling lamb to the plant.”

Narfason said Ernst & Young has received calls from producers concerned about what would happen if the plant shut down, but the signs are good.

“We are confident the plant will continue,” said Narfason. “We already have lots of interest from potential buyers for the plant, and we haven’t started the sale process yet.”

For now, sheep farmers in the province, and Western Canada, wait to see how things play out, said Walker.

“Producers should keep an eye on it, and keep track of it and what is going on because they are a large producer with about 35,000 head,” she said. “Being that large, there is going to be an impact on the industry, negative or positive.

“It’s an evolving situation and producers should be watching this, and make informed decisions on marketing for next year and breeding timelines.”

The court materials — including an affidavit from the former company president — can be found here. Alberta Lamb Producers is also posting information on the producers section of ablamb.ca.

The post Lamb sector roiled by fall of major player appeared first on Alberta Farmer Express.