Hursh Consulting & Communications Inc.

Crop                Yield              Price            Expense/Ac           Net/Ac

HRSW                38                  5.50                      210                   (1)

Durum                37                  9.00                     210                   123

Oats                    82                  2.75                     197                  29

Barley                58                    3.00                     207                  (33)

Canary              1174                   .24                      202                    80

Flax                     23                    12                      205                     71

Canola                31                     9.20                    277                     8

Mustard            1069                    .29                      190                    120

Peas                   34                     6.50                   220                     1

Lentils             1371                      .25                     242                    101

How do returns from the various 2014 cropping options compare in Saskatchewan? Of course, it all depends upon the assumptions you use, so let me explain where the numbers come from in the table above.

The yields (expressed in bushels per acre for most crops and in pounds per acre for canaryseed, mustard and lentils) come from the province-wide estimates within the November final crop report issued by the Saskatchewan Ministry of Agriculture.

The most contentious numbers will be the prices. I’ve tried to express an FOB farm price for the typical grade and class of the particular commodity. On spring wheat and especially on durum, there’s a wide range in grades and prices and so an intermediate number has been used. For barley, a feed price has been assumed. On mustard, this is an average of current prices for the three different types. For peas, I’ve used the price for yellow. On lentils, the price of an X3 red has been used.

Contract prices that were available earlier in the year have not been factored into the equation. These are estimates of current cash prices for this year’s most typical grade. These numbers were put together in early November from a number of sources. Prices may have changed by the time you’re reading this. It’s also important to note that prices vary by location.

The expenses per acre come from the Crop Planning Guide published this spring by the Saskatchewan Ministry of Agriculture. In most cases, the costs for the dark brown soil zone have used. These are total rotation expenses including variable and fixed costs but without any consideration for return to labour and management. Everyone’s expenses will be different, but using these published estimates provides a common denominator.

Conclusions? Anyone able to grow a decent durum crop is making a lot more money than if they had grown spring wheat. Canola is not very attractive if you only achieve average yields. Flax and mustard are interesting options to canola, but you have to wonder what will happen to prices if there’s a significant acreage increase for those crops in 2015. Feed barley is a big money loser. Peas are not profitable for many producers. Like durum, lentils are a winner this year if you were able to grow a decent crop.

The sprayer booms were being folded up for the last time after another fungicide application on the chickpeas. It did not go well.

The left boom tip did its normal high aerial arc, but lodged on the top of the frame before sliding into place. “Need to adjust the alignment a bit,” I thought while exiting the cab. Just a little push and the boom would slide past the frame.

It required a bigger push than expected and then the boom dropped like a rock into its holder with my right hand underneath. In an instant, I found myself face down on the ground assessing the injury.

Fingers were all attached. Some blood was running out of the palm. Above the wrist and below the base of the thumb had been crunched, but I could still wiggle the thumb. It hurt like hell.

Eventually, I was able to finish putting the sprayer into transport and get back to the yard, but there was considerable moaning and groaning.

My wife says I’m a wussy when it comes to pain and she’s probably right. No bones were broken and some heavy duty antibiotics should ward off any infection. Gradually, I’m able to make more use of the hand.

A right thumb is rather invaluable for running a combine, not to mention all the minor maintenance and repairs that need to be done before the combines are ready to roll. So I’m pretty impatient for the healing process.

I’d bemoan what the injury has done to my golfing, but my game was hopeless to begin with.

Reflecting back on the accident, it’s scary to think how serious it might have been. I’ve often wondered if I’d have the intestinal fortitude to collect severed fingers and take them with me to the hospital in the hope of reattachment.

I’ve also wondered what it would be like to have a hand or other body part caught in a piece of equipment, with nobody around to help.

Back in 2003, Saskatchewan farmer Bruce Osiowy cut off two of his own fingers after being caught in a rock picker for nearly three days. The accident received national attention.

I make a point of keeping my cell phone in my pocket rather than setting it out in the cab. However, at this particular field location there may not have been cell phone coverage.

It was reasonably close to the road, but the road is really a trail and it can go without any traffic for days at a time. If my wife failed to hear from me for an extended period of time, she’d send out a posse. It wouldn’t take three days, but even half a day of hurt and bleeding would be torture.

I wasn’t carrying my Leatherman tool with its knife that the kids gave me, so there would have been no slice and release option.

Over the years, I’ve become less rambunctious and more safety conscience, but there’s obviously still room for improvement.

In my view many safety recommendations have limited merit. For instance, who is going to wear a seatbelt when running a tractor across level ground?

The best defence is strategic thinking. What might happen if I give that snagged sprayer boom a push? Do I have my cell phone with me at all times? If I’m working alone, is there someone to check in with periodically?

The busy harvest season is approaching. Think safety.

The grain transportation backlog has put Statistics Canada field crop reporting under the microscope. Why didn’t we know that a huge crop was coming last year? How were the railways supposed to gear up when initial estimates were tens of millions of tonnes below what was actually produced?

Suddenly, the entire industry has a graphic example of why accurate yield and production estimates serve useful purposes. Whether the railways would have heeded the production forecasts is another question, but not having accurate information soon enough gives them yet another excuse for not mobilizing adequate resources to do the job.

Agricultural economist Richard Gray has suggested a network of agrologists doing yield determinations across Western Canada during the growing season as a replacement for the Stats Can farmer surveys. It’s his contention that farmers can’t always accurately estimate their potential production.

While some official yield determinations at benchmark locations may be a useful addition to production forecasts, a bigger part of the solution is fixing how Statistics Canada operates. They do thousands of surveys with farmers in each province multiple times during the growing season, but in many ways they’re stuck in the past and mired down by process.

It’s rare to find a farmer who likes Statistics Canada and who thinks their field crop reporting is a useful service. The process for this year is just beginning. In recent weeks, Stats Can has been badgering producers for their seeding intentions. Many farmers either try to avoid the calls or lie through their teeth.

Since the survey taker typically knows nothing about agriculture, they’ll accept stupid answers and not realize they’ve been scammed.

In the minds of most farmers, survey results just drive down market prices. The result of the seeding intentions survey will be released by Stats Can on April 24. Whatever crops are showing a larger acreage increase than expected will be targeted by analysts as crops that may see pricing pressure.

There’s never been a public relations exercise to convince farmers that good information is valuable to the entire industry. If there was no government survey, you can bet that grain buyers would be making their own internal estimates and those results wouldn’t be shared with producers.

There’s no use surveying producers who don’t want to participate. Explain why good information is useful and seek the cooperation of competent growers who agree to be part of the process. Even pay them a bit for their time and effort.

Most importantly, Statistics Canada has to join the 21^st century. They need to use the tools available to dramatically shorten the time between collecting information from producers and when the data is tabulated and released.

The way it is now, the information is old and out of date by the time it’s announced. A few weeks of lag time can make a big difference in acreage estimates in the spring and it can make a huge difference in yield estimates in the summer and fall. 

On many of the minor crops, acreage estimates obtained through surveys have long been suspect. Seeded acreage information from crop insurance should be used to verify the survey results coming from producers. If you can’t get the acreage right, your production estimates won’t be accurate either.

Satellite imaging should also play a role, but it shouldn’t be viewed as a replacement for talking to people on the ground.

The whole process needs a shake-up from process to public relations.

By August, the federal government plans to pass legislation strengthening Plant Breeders’ Rights so that this nation will finally conform to the international UPOV’91 treaty. The National Farmers Union continues to raise alarm bells over the change and their fear mongering resonates with those who like to view farmers as the victims of big business.

Most of the hubris surrounds the ability of farmers to save their own seed, but in truth many farmers are not fully aware of how the current rules work, let along what the changes will mean.

Most varieties of wheat, durum, barley, oats and flax are currently protected by Plant Breeders’ Rights meaning you can save seed for your own use, but you can’t sell or trade the seed to another producer. Just check the seed variety guide. 

In practice, regulators typically go after those making significant sales of protected varieties, but it’s still illegal on a smaller scale.

Under the updated legislation, the ability to save and use your own seed is specifically granted under Farmer’s Privilege, but the naysayers claim that just calling it a privilege shows it’s something that could be removed.

The regulators say they wrestled with the term privilege, considering farmers’ exclusion, but what you call it is less important than the practical ramifications.

Currently, there are many instances where farmers give up the right to save their own seed. In many closed loop production systems, there’s a requirement for producers to use certified seed and to sell all of the production back to the company. No seed can be retained.

Farmers judge the merit of these contracts and don’t get hung up on saving seed if the overall opportunity is to their liking.

With canola, virtually no one is interested in saving their own seed. With hybrid seed, many of the benefits are lost in subsequent generations. Besides, the seed treatments used for canola are not approved for on-farm application.

There are lots of complaints over the price of canola seed, but the crop dominates Western Canada’s acreage because it typically generates some of the best returns.

On the cereal grains, we’re used to most of the varieties coming from public breeding programs. Producers buy certified seed when they want to try a new variety, but after that they usually save their own seed from one year to the next.

The federal government is withdrawing from variety development on many of the major crops. Private companies are investing to fill the void and they say the improvements to breeders’ rights will increase investment.

Will the new legislation actually lesson the ability of producers to save their own seed on the crops where the practice remains prevalent? The legislation by itself won’t, but subsequent regulations could eventually curtail farmers’ privilege.

Officials promise this would only happen after extensive consultation, but it’s certainly possible in the years ahead. This also opens the door to end point royalties on farmer saved seed. 

As we move to UPOV’91 and beyond, there will be more varieties that will benefit farmers, but farmers will be paying for them. There’s no free lunch. 

Canada is one of the last developed nations to move to UPOV’91 standards. It’s been talked about since the original legislation died on the order paper back in1999. While the modernization is long overdue, as farmers we’ll also need to modernize our attitude. The private sector won’t invest without a way to recoup their money.

There are no easy answers, no quick fixes to the grain logistics backlog, but make no mistake, the primary source of the problem lies with the railways.

They haven’t supplied enough cars and locomotives to match the huge crop that needs to move. Even if they allocated more resources to grain movement, some observers say they don’t have enough trained engineers to run the additional trains.

No doubt West Coast ports have their own issues, but export terminals have lots of empty space while scores of vessels wait to load. The grain just isn’t arriving in time to meet sales commitments.

Yes, there are system and communication issues involving the entire logistics chain, but the most pressing need is to increase rail capacity and that leads to discussions about changing or removing the grain revenue cap.

Unfortunately, misconceptions abound over what the revenue cap entails and how it works.

The formula takes into account the amount of grain hauled and the average length of haul. Thus, the revenue cap is not a disincentive to move greater volumes. The cap rises in tandem with volume moved.

When the railways exceed the cap and have to pay the excess to the Western Grains Research Foundation, it’s because they set their rate per tonne a bit too high.

A volume related composite price index is also part of the annual formula. It accounts for any increase or decrease in labour, fuel and other expenses.

Cost changes move the revenue cap up and down in relation to the base year of 2000-2001, but a lot has changed since the cap was set. Many argue that with fewer elevators and more movement in large car blocks, the railways have benefited from efficiency gains and that there should be a new costing review.

Others are convinced that the only way to get better service is to let the railways charge higher rates. After all, they argue, high freight rates would be no worse than the ridiculously wide basis levels being subtracted from grain prices.

Elevator companies are paying demurrage on ships that have been waiting for weeks on end. A widening basis should be a disincentive for producers to sell, but producers have remained anxious to move grain despite dropping values. As a result, many companies have stopped buying, posting no bids for nearby months.

It’s important to note that the revenue cap does not apply to grain moving south into the U.S. and Mexico. Nor does it apply to grain moving to domestic destinations such as the Fraser Valley. And yet service outside of the revenue cap doesn’t appear to be any better.

And many other sectors also complain about rail service. For years, the Coalition of Rail Shippers involving all the main exporters fought for the right to have service level agreements with the railways. Unfortunately, the legislation fell short of what is needed to actually make a difference.

People point to the U.S. where there’s a bid system for cars as proof that paying more means you’ll get better service. However, there are big differences between the two countries. America consumes much more of its grain domestically and they also have the Mississippi River system for a great deal of their exports.

Before we volunteer to open our wallets to CN and CP, lots of questions need to be addressed. Giving the railways the ability to charge what they want is no guarantee of improved service.