The changing economics of global agriculture

[Azure]

Originally Posted by HotHotHeat

That's just the point. If they could sell on the open market, like farmers in Ontario, they'd grow and sell what they feel would yield the highest profit. The wheat board is designed to 'protect' the farmers, and guarantee a bottom line, but it doesn't truly reflect what the open market prices offer.

Thats cause the government interfering tends to screw things up.

A 'true' supply and demand economy would basically force farmers to grow crops that are in demand.

[Azure]

Originally Posted by burn_baby_burn

Canola is not controlled by the Canada Wheat Board. You are right, allthough farmers are currently getting record payments for wheat and barley throught the Wheat Board. It is still lower than the price wheat is trading for on the open market.

You're sure about that?

Cause I was talking to some friends in Manitoba the other day and they said that the wheat board wasn't allowing them to sell their canola to the US.

[Cowboy89]

Originally Posted by Lanny_MacDonald

This mindset is what makes me shake my head. You can do both from one single crop. You can grow food AND produce fuel. The food stuffs come from the fruit of the plant, and the fuel comes from the stalks and waste portion of the plant. The vast majority of the energy of a plant is in those stalks, but it is easier to get at the fuel through the fruit.

If only it were that simple, the quality of plant required to produce fuel is much lower than one in which can be used for human consumption. If fuel prices are really high than farmers are more likely willing to forsake quality for yield and the food part gets wasted anyway and as this happens then there's less food on the market and then those prices go higher until we reach an equalibrium world where both fuel and food prices are higher than the baseline. Both vital components of our existance. Therefore maybe it's the wrong tree to bark up when looking for an alternative to gasoline from petroleum.

[kootenayguy9]

I used this piece for a discussion in my high school Social Studies class this morning. With rising commodity prices most of students were saying how they need to be paid more in the future.

[burn_baby_burn]

Originally Posted by Azure

You're sure about that?

Cause I was talking to some friends in Manitoba the other day and they said that the wheat board wasn't allowing them to sell their canola to the US.

I am 100% sure. Canola is an off board crop. The only two crops controlled by the Canadian Wheat Board are Wheat and Barley.

http://www.cwb.ca/public/en/

[Lanny_MacDonald]

Originally Posted by Cowboy89

If only it were that simple, the quality of plant required to produce fuel is much lower than one in which can be used for human consumption. If fuel prices are really high than farmers are more likely willing to forsake quality for yield and the food part gets wasted anyway and as this happens then there's less food on the market and then those prices go higher until we reach an equalibrium world where both fuel and food prices are higher than the baseline. Both vital components of our existance. Therefore maybe it's the wrong tree to bark up when looking for an alternative to gasoline from petroleum.

So you can sell BOTH the ear of corn, and then the residual biomass, for more money than you could doing either of the other alone, but you're saying that farmers are electing to do one or the other? I guess the farmers here in Arizona are just a little smarter than the rest, because they double dip with the encouragement of the utility companies. But then again, SRP and APS are both progressive and use all technology to their advanatage to make power and encourage their customers to do the same. Heck, APS is actually capturing CO2 and using algae to make ethanol, and then burning the biomass from that process to create more power. It's really funny what we can do when we actually try and don't take the defeatest mentality. But to get past that, you have to get off the O&G teet, which will never happen in Alberta. The minds there have been poisoned to believe that the only solution to our energy needs comes in the forms of rotting dinosaur and plant materials from several million years ago. That is the first challenge up there, just like getting past the whole religiosity issue is the first step to redeveloping Americans intellectual advantage over the rest of the world.

[Bobblehead]

Right now the markets are skewed by many tariffs and subsidies. If some of these were to be lifted then maybe there wouldn't be huge pressure on corn for ethanol, sugar cane or beets could be used instead (which would help many of the poorest countries in the world).

Many farmers are now shackled by government programs(subsidies, tariffs, marketing boards, etc), either because they can't get into the markets they would like to, they have paid large sums to get into those markets and are loathe to lost their investment (i.e. quota), or the programs have made certain crops safe and they would rather make the sure money than take a chance on market fluctuation (many of which are caused by market interference).

There may be opportunities for all these uses, but with so many political/special interest considerations, I'm not sure any estimates we make can take into account what could happen in the long run.

[GeoffSK]

Originally Posted by Azure

I don't agree.

Without the wheat board Canadian farmers could send canola to the US where they would receive higher market value.

How is it good for the Canadian farmer when they're forced to sell their product at a price lower than market value?

The wheat board only controls barley and wheat prices.
Wheat board is not good for farmers. Last month the wheat price in the USA was $23/ bushel, in canada it was around $9

[mykalberta]

Originally Posted by burn_baby_burn

So your saying a producer bases his planting decisions based on commodity prices, or in your explaination Wheat Board price? Whats wrong with that? How is that differant than any other business?

Farmers should not be forced to sell to the wheat board to propagate Canada's social domestic and world welfair policy.

They should be free to choose and I shouldnt have a cop take my fingerprints at age 17 cause I decided to join my uncle in taking his crops cross the border to get more than double what the cwb was paying out at the time because he and his family wouldnt have made it through 4.30/bsl for wheat at the time.

[burn_baby_burn]

Originally Posted by mykalberta

Farmers should not be forced to sell to the wheat board to propagate Canada's social domestic and world welfair policy.

They should be free to choose and I shouldnt have a cop take my fingerprints at age 17 cause I decided to join my uncle in taking his crops cross the border to get more than double what the cwb was paying out at the time because he and his family wouldnt have made it through 4.30/bsl for wheat at the time.

I'm 100% against the Canadian Wheat Board. My response was to a question about farmers planting crops that have the highest econonomic return.

[BurningDownTheHouse]

Unfortunately, an article like this implies that prairie farmers are looking to benefit - which doesn't appear to be the case. While the price of fuel and fertilizer are acknowledged as increasing costs, they don't quite get the 'credit' due, and other costs are overlooked.

For ease, assume a 160-acre wheat crop. The farmer will have to pay for the seed and a seed treatment (to protect against seed- and soil-borne disease and early-season insect larvae), a grassy-weed herbicide and a broad-leaf herbicide (around $20 per acre for the grassy and $5 per acre for the broad-leaf), and increasingly, a fungicide, as the prairies have seen quite an increase in plant disease in the last 5 or so years ($7 per acre; fungicide usually requires 2 applications in a growing season - so $14 per acre total). These prices are based on the suggested retail price of a Canadian ag-chem company's products for 2007.

This lands a bill of around $6200 in the farmer's hands, for a quarter-section of land. If your average farm operates on 4-5 sections, that's up to $125,000 - not including the cost of seed and seed treatment, equipment costs, fuel, equipment maintenance, grain storage and transport fees, and so on. Now account for yield-loss due to insects, drought or (as has been the case the last 3 years) flooded-out fields, hail storms, etc.

I have had clients tell me that once they stop receiving payment for the oil- and gas-wells on their land, they will have to leave farming. I've also had clients take on second jobs to "support the farming habit", as they've put it. Things don't look to change, if the CWB continues to pay well below market price for grain.

Having mentioned ag-chemicals, organics is another interesting agri-trend. But take a read through this 2006 Business Week article about the "sustainability" of organics. Very interesting.

[burn_baby_burn]

Originally Posted by BurningDownTheHouse

This lands a bill of around $6200 in the farmer's hands, for a quarter-section of land. If your average farm operates on 4-5 sections, that's up to $125,000 - not including the cost of seed and seed treatment, equipment costs, fuel, equipment maintenance, grain storage and transport fees, and so on. Now account for yield-loss due to insects, drought or (as has been the case the last 3 years) flooded-out fields, hail storms, etc.

You forgot one of the biggest expenses, fertilizer. Which has doubled over the last few seasons.

[BurningDownTheHouse]

Originally Posted by burn_baby_burn

You forgot one of the biggest expenses, fertilizer. Which has doubled over the last few seasons.

You're right - thanks for the correction!

[simonsays]

Originally Posted by HotHotHeat

Orrrrr...Not.

The removal of tariffs, quotas and direct supports was accelerated with the signing of NAFTA and the opening of Mexico to international markets, says Carlsen. From 1994 to 2002, US exports of maize to Mexico nearly tripled, from 2.2 million tonnes annually to 6 million tonnes. Mexico also became the second-largest export market for US maize, accounting for 11 percent of all exports in 2000, or about US$550 million worth.

The effects in rural Mexico have been pronounced. As many of the larger farmers shifted from maize to other crops, smaller, poorer farmers actually increased the cultivated land under maize to offset their decreasing income and feed their families. The unfortunate irony is that these smaller farmers lost even more money on corn every year, and fell deeper into poverty.

http://www.cec.org/trio/stories/inde...h&ed=12&ID=143

NAFTA is a real bugger.

I have little doubts that NAFTA isn't looking out for small scale corn farmers in Mexico. But it does keep the costs of maize low for your average consumer, and frankly that probably affects more people.

Originally Posted by The Economist

Growing maize efficiently requires lots of water, large fields and mechanisation—in other words, Iowa or Saskatchewan rather than Oaxaca. Subsidies have caused Mexican farmers to stick to maize instead of switching to more profitable and labour-intensive crops, such as fruit and vegetables, Mr Serra argues

http://www.economist.com/world/la/di...ry_id=10566845

[Berger_4_]

Well, I've read through most of this thread and I'm curious...how many people on here are actually involved in farming, either through actual farming or through crop management and the like?

[HotHotHeat]

Originally Posted by simonsays

I have little doubts that NAFTA isn't looking out for small scale corn farmers in Mexico. But it does keep the costs of maize low for your average consumer, and frankly that probably affects more people.
http://www.economist.com/world/la/di...ry_id=10566845

Frankly, when Walmart and other big corporations win over business, all it does is centralize wealth. And yes, that does affect a lot of people.

[HotHotHeat]

Did anyone look at my post about water as a tradable commodity?

Are people generally OK with it?

[flamey_mcflame]

Originally Posted by BurningDownTheHouse

Unfortunately, an article like this implies that prairie farmers are looking to benefit - which doesn't appear to be the case. While the price of fuel and fertilizer are acknowledged as increasing costs, they don't quite get the 'credit' due, and other costs are overlooked.

For ease, assume a 160-acre wheat crop. The farmer will have to pay for the seed and a seed treatment (to protect against seed- and soil-borne disease and early-season insect larvae), a grassy-weed herbicide and a broad-leaf herbicide (around $20 per acre for the grassy and $5 per acre for the broad-leaf), and increasingly, a fungicide, as the prairies have seen quite an increase in plant disease in the last 5 or so years ($7 per acre; fungicide usually requires 2 applications in a growing season - so $14 per acre total). These prices are based on the suggested retail price of a Canadian ag-chem company's products for 2007.

This lands a bill of around $6200 in the farmer's hands, for a quarter-section of land. If your average farm operates on 4-5 sections, that's up to $125,000 - not including the cost of seed and seed treatment, equipment costs, fuel, equipment maintenance, grain storage and transport fees, and so on. Now account for yield-loss due to insects, drought or (as has been the case the last 3 years) flooded-out fields, hail storms, etc.

I have had clients tell me that once they stop receiving payment for the oil- and gas-wells on their land, they will have to leave farming. I've also had clients take on second jobs to "support the farming habit", as they've put it. Things don't look to change, if the CWB continues to pay well below market price for grain.

Having mentioned ag-chemicals, organics is another interesting agri-trend. But take a read through this 2006 Business Week article about the "sustainability" of organics. Very interesting.

Ooooh booohoooo, the poor hard working farmers. Salt of the earth, dusk to dawn working and heroes in overalls. I'll be glad when they truly allow agriculture to be free market. Instead of having our country and all other western nations subsidize their lifestyles. Must be nice to be in an industry that whenever there is a disaster, you get bailed out by the government. I'd love that kind of security. I hope the government and the CWB get out of the whole agricultural industry, then the farmers can earn their dollars like I do. Unfortunately, they'll have to compete against all the third and fourth world country farmers who won't have to compete against governments to provide grains for cheaper.

Farmers always want the free market, then the BSE or something else will hit, and then they'll cry for intervention. Can't have it both ways. Let's free market this like any other good and commpodity in the world. About time.

[GeoffSK]

Originally Posted by Berger_4_

Well, I've read through most of this thread and I'm curious...how many people on here are actually involved in farming, either through actual farming or through crop management and the like?

I farm a 1/2 section of land on my dad's farm, so i could be considered a "weekend farmer". The farm is located about 75 km NE of Saskatoon.

I also work full time as a Database Consultant.

[jofillips]

flamey - thats pretty wrong thing to state about most farming whether in canada or europe.
Here in the UK and a lot of other european countries (minus France) most of farming gets diddly squat in subsidies and help, plus they're getting the same market price for their beef and lamb as 25 years ago!!
Simply put, it costs more to produce meat than they get back...

i've been involved in farming in devon for a while now; its really heart breaking to see traditional ways of life and culture dissappear so quickly becuase of governmental idiocy...
*sorry for going off the wheat topic here