www.ontariograinfarmer.ca Publ ished by AROUND THE WORLD JUNE/JULY 2022 Global economic challenges WAR IN UKRAINE CAUSES FURTHER DISRUPTION
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6 ON THE COVER Global economic challenges Sankalp Sharma WAR IN UKRAINE CAUSES FURTHER DISRUPTION From the CEO’s desk WE FIND A WAY 4 Farming in a war zone Melanie Epp 10 The 2023 Farm Bill Owen Roberts 12 Business side Conversations with business experts 9 GrainTALK newsletter An update on Grain Farmers of Ontario news and events 16 New UK trade negotiations Jeanine Moyer 14 Crop side Agronomic information from crop specialists 27 Corn makes whisky Rebecca Hannam 18 Right to repair Matt McIntosh 20 A global perspective Ontario Grain Farmer 22 Insect control from the air Treena Hein 24 Declaration of eligibility Canadian Grain Commission 26 Good in Every Grain Updates on our campaign 30 JUNE/JULY 2022 volume 13, number 8 ONTARIO GRAIN FARMERis published 9 times a year (December/January, February, March, April/May, June/July, August, September, October, and November) through Grain Farmers of Ontario. Distribution is to all Ontario barley, corn, oat, soybean, and wheat farmer-members. Associate Membership Subscription available upon request. Views and opinions expressed in this magazine are those of the authors and do not necessarily represent the policies of Grain Farmers of Ontario. Seek professional advice before undertaking any recommendations or suggestions presented in this magazine. PUBLICATIONS MAIL AGREEMENT NO. 40065283. Return undeliverable items to Grain Farmers of Ontario, 679 Southgate Drive, Guelph, ON N1G 4S2. © Grain Farmers of Ontario all rights reserved. Publisher: Grain Farmers of Ontario, Phone: 1-800-265-0550, Website: www.gfo.ca; Managing Editor: Mary Feldskov; Production Co-ordinator: Kim Ratz; Advertising Sales: Joanne Tichborne Look for these symbols for bonus content in our digital edition. Ontario Agricultural Hall of Fame Ontario Grain Farmer 28
The annual event returned as the premier agricultural event in Ontario — drawing more than 500 people from across the province. There was a heightened sense of excitement in the air as farmermembers, industry, and government officials met, many for the first time in two years, to celebrate Ontario agriculture and the work of Grain Farmers of Ontario. The event featured guest speakers, including the Honourable Jody Wilson-Raybould, Orlondo “Coach O” Steinauer of the Hamilton Tiger-Cats, international guests Secretary Sonny Perdue, former U.S. secretary of agriculture, and Tyne Morgan, host of U.S. Farm Report. In a live taping of the program, Tyne hosted a panel session featuring Canadian and American experts, including Perdue, Al Mussel of the Canadian AgriFood Policy Institute, and Bailey Elchinger of the StoneX Group. While there was much to celebrate at the March Classic — including Grain Farmers of Ontario’s tenth milestone anniversary, delayed since 2020 — the recent Russian invasion of Ukraine was on everyone’s mind. With millions of refugees fleeing the conflict and reports of death and destruction on the news, the war has exacerbated an already fragile international agri-food supply chain and threatened global food security. The impacts of the war in Ukraine are being felt all across the globe. Ontario farmers are faced with shortages of much-needed fertilizer and rocketing input prices, increased fuel costs, and uncertain markets. But we know that now, more than ever, our efforts to produce grains used for food and fuel domestically and globally are vitally important. Ontario’s farmers are showing resiliency in the face of uncertainty and great risk. As Brendan Byrne, chair of the Grain Farmers of Ontario Board of Directors, said at the 2022 March Classic, even in times of great difficulty, like a global pandemic or an international crisis caused by war, “we find a way.” Grain Farmers of Ontario, and our farmermembers, will “find a way” to mitigate the impacts of the global challenges we face. l We find a way THE GLOBAL AGRI-FOOD sector is interconnected throughout the supply chain — and this has become even more apparent in the past two years as the COVID-19 crisis has impacted every facet of agricultural and food production worldwide. The global pandemic has affected primary production, trade, labour supply, and international travel, negatively impacting farmers, processors, retailers, and consumers. As public health restrictions started to ease in Ontario in early 2022, Grain Farmers of Ontario was optimistic about Canada’s gradual return to what only could be described as a post-pandemic “new normal.” With a great deal of planning, including many different contingency scenarios, we set out to host the first March Classic since 2019 after having to cancel the event just days after the global pandemic was declared in March 2020 and hosting a virtual March Classic in 2021. Crosby Devitt, CEO, Grain Farmers of Ontario From the CEO’s desk 4
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Cover story 6 OVER THE PASTtwo years, there has been a considerable disruption in the global economy and agricultural markets. High costs of production, supply-chain challenges, inflation, geopolitics, and volatility in the markets continue to impact Ontario grain farmers. Throughout this growing season and into next year, grain farmers will be watching three key areas: high-input costs and shrinking margins, price volatility related to global grain supply and political instability, and commodity prices and interest rates. HIGH INPUT COSTS Input costs were rising before the pandemic and have shown no sign of slowing down. Shrinking margins despite high grain commodity prices are a function of the fixed costs required to run grain farms and the drastic increase in fuel and fertilizers. According to the Ontario Ministry of Agriculture, Food and Rural Affairs, the overall cost of production has increased by 21.4 per cent for corn and 23 per cent for soybean growers since last year. Since the COVID-19 crisis began, the average cost of farm inputs has increased by 14 per cent, according to Statistics Canada's Farm Input Price Index, with fuel and fertilizers being the primary drivers. These increases do not incorporate the indirect cost of the federal carbon tax, which increased by 102 per cent between 2019 and 2022, adding an additional $54 per acre. Fuel prices, which had fallen at the start of the pandemic, have nearly doubled since then. Initially, the increase was driven by the easing of pandemic-related lockdowns and restrictions. Recent increases are driven by sanctions on Russia, and their inability to sell oil abroad is causing a global supply shortage. Fertilizer prices in Canada, on average, have increased by 117 per cent since April 2021 and 42 per cent since the Russia-Ukraine war began. Increased global demand, energy costs (especially natural gas), and supply chain disruptions have contributed to increased prices. Additionally, China has slowed down or stopped production at many fertilizer plants to conserve electricity due to rolling blackouts and has blocked phosphate exports to protect local users from high global prices. Canada has also imposed a 35 per cent tariff on fertilizer from Russia and Belarus and has barred Russian ships from docking at Canadian ports. These sanctions created supply challenges to spring fertilizer supplies in Ontario, Quebec and Atlantic Canada. Farmers were faced with uncertainty, not knowing fertilizer prices or if they could secure fertilizer supplies before planting began. Discussions are underway in Canada to find alternative sources for key fertilizers. Solutions to sourcing alternatives will need to keep the economics in mind and the speed at which they can service the demand that has traditionally relied on Russia due to its lower energy costs. While commodity prices for corn, soybeans, and wheat were higher going into planting season, profit margins will be affected by the substantial fuel and fertilizer costs, accounting for 38 per cent of costs. Looming concerns persist from farmers about the potential for input prices remaining high even after commodity prices have declined. FOOD PRICE INFLATION Global food prices increased 30 per cent in the first two years of the pandemic and an additional 30 per cent in the first quarter of 2022. Prices are rising and have exceeded the prices seen in the global food crisis of 2011, which led to widespread political instability in the hardest-hit nations. Price changes are often a function of short-term market forces adjusting to prevailing demand and supply conditions. In the early phase of the COVID-19 pandemic, food price increases were driven by global retail and food processing worker shortages. However, they continued to increase in 2021 and spiked in the first threemonths of 2022 despite labour shortages subsiding. Increased energy costs, shipping disruptions due to supply chain bottlenecks and container shortages, and reduced agriculture production from droughts in Brazil and Canada have also contributed to soaring prices. Global economic challenges WAR IN UKRAINE CAUSES FURTHER DISRUPTION Sankalp Sharma continued on page 8 • The global COVID-19 pandemic has caused significant rise in input costs including fuel and fertilizer over the past two years. • The issue has been further exacerbated by the Russian invasion of Ukraine in February of 2022, causing fertilizer and fuel shortages and skyrocketing prices. • Global food prices have increased by 30 per cent in the first quarter of 2022, after increasing 30 per cent during the pandemic. Rising food inflation is causing an increase in global food insecurity. • Grain Farmers of Ontario continues to advocate for government support to help mitigate the risk that farmers face due to global economic and political pressure. WHAT YOU NEED TO KNOW
ONTARIO GRAIN FARMER 7 JUNE/JULY 2022 SUNFLOWERS ARE THE NATIONAL FLOWER OF UKRAINE AND A MAJOR AGRICULTURAL EXPORT.
8 The Food and Agriculture Organization Food Price Index does not reflect the full impact of the Invasion of Ukraine by Russia yet. It is estimated that 25 per cent of the global grain supply comes from the regions affected by the conflict and the retaliatory sanctions. Since the war began, Russia has blocked all ships in the Black Sea from leaving Ukraine, forcing the country to resort to transporting grain west via rail. Land mines, input shortages, and military assaults have impacted farmers, and according to the Ukrainian agriculture minister, the total 2022 harvest could be reduced by 50 per cent. The International Committee of the Red Cross says that 25 per cent of Africa's population of 346 million is now food insecure due to price inflation and shortages driven by Russia's invasion of Ukraine. In April 2022, the government of Canada stated that "the invasion of Ukraine — and the significant sanctions imposed on Russia's economy — have jolted commodity markets with a surge in prices. With sanctions likely to remain for some time and a longer-term strategic shift away from Russian resources in some parts of the world, certain commodity prices are poised to remain elevated and volatile. Due to global demand, prices and markets for Ontario grains and oilseeds are high. Political unrest from food insecurity and geopolitical position will continue to create volatile markets for Ontario grains." RECESSION IS POSSIBLE The U.S. yield curve is threatening to invert, which can be a sign of a U.S. economic recession. A yield curve inversion happens when the interest rate on long-dated treasuries is lower than on short-dated U.S. treasuries. This is unnatural and usually occurs when investors sense the U.S. economy is in trouble and demand a higher return on short-term investments. Previous U.S. recessions were preceded by the yield curve inverting, with a downturn arriving after 17 months of the inversion. Historically, recessions in Canada have followed U.S. recessions since the Depression except for 1969 and 2001. While recessions are a natural part of the economic cycle, the government of Canada and the Bank of Canada (BOC) try to ease the impact through investments and monetary policy. The BOC's April 2022 economic continued from page 6 THE CARPATHIAN COUNTRYSIDE IN UKRAINE. statement forecasted growth in Canada's economy for 2022 before a gradual slowing in 2023 and 2024. Since the post-pandemic recovery, inflation has been rising, and too much inflation can cause a recession. The BOC's primary mandate is to keep inflation at two per cent by employing monetary policies by adjusting the policy interest rate over time. On April 13, the rate was increased by 0.5 per cent, with further rate hikes projected. The intended effect of the rate hike is to restrain borrowing, lowering consumer spending and inflation. The impact of interest rate hikes and recession is another uncertainty for Ontario's grain farmers. Commodity prices typically decline in a recession, but that may not be the case with the fragile geopolitical climate. Depending on the interest rates increases, servicing farm debt, which has doubled in Ontario in the last 10 years, could become challenging. FINAL THOUGHTS Farmers are accustomed to managing uncertainties in their farm businesses, and they rely on government support to manage risks outside of their control. Geopolitics, the ongoing invasion of Ukraine, and the postpandemic economic recovery make the risks outside of farmers' control greater than we have seen in the recent past. Farmers need the government to provide risk management solutions to help them grow more food in Canada as threats to global food security mount. AgriStability is not responsive to grain farmers facing the volatilities in the marketplace. Grain Farmers of Ontario has advocated for better BRM programming targeting price and margin decline and asked the Ontario government to increase the money available in the Risk Management Program (RMP). Ontario's direct competitors in the United States have programs that work for them and give them a competitive advantage in the global market. In a world with so many uncertainties, a sustainably funded BRM program that responds to the risks grain farmers face would provide the security they need to invest in their business and grow the crops that produce food for people in Ontario and around the world. Sankalp Sharma is the senior economist at Grain Farmers of Ontario. l
9 (J.M.) WHAT ADVICE DO YOU HAVE FOR FARMERS CONSIDERING LOWERING THEIR CARBON FOOTPRINT? (G.G.) My first question to farmers who are thinking about lowering their carbon footprint is — are you ready to make the decision? Entering the greenhouse gas (GHG) arena is voluntary for farmers right now. It’s complicated, and it is unregulated. Your farm business will need to make a series of serious farm management decisions. In other words, it’s more than just a desire or market differentiator to say your farm is environmentally friendly and sustainable. When making this decision for your farm, you need to look at it from a farm management perspective. This is a kitchen table meeting question: are you going to lower your GHG footprint? And everyone involved in your farm business needs to be consulted because if you choose yes, thismeans an integrated transition for your farmbusiness. I recommend this type of decision should be approached in a debate format — gather everyone together and ask questions like, why should we do it?What’s in it for us?What type of labour and technical capacity is required? How will this impact retained earnings? Since any commitment to GHG reduction or entry into the carbon market for farms is voluntary, farm business owners are better off making a conscious decision now rather than an unconscious one or having the market decide for them down the road. I predict that eventually, markets will drive that decision on your farm, making now a good time to start thinking about what it would take to reduce your farm’s GHG footprint. WHAT DO GROWERS NEED TO KNOW ABOUT THE CARBON MARKET? As you consider making this change to your operation, approach it with the same thinking as you would when growing a new and unique crop type. You will need to research, learn quickly and learn as you go. There will be headaches as you enter a new market and figure out how to sell your new commodity and who the buyers are. There will likely be benefits, with some tangible market opportunities out there for your farm to take advantage of. If you’re debating whether your farm should reduce its greenhouse gas footprint, there are a few things to consider when deciding. Howwill you prove it? Everything is measured in the GHG and carbon market. You’ll need baseline data andmeasurement tools for ongoing assessment to start. Is your farm prepared to invest in the necessary labour, technology skill set, data storage and collection tools? For example, you may need to measure how much diesel you use per acre or how many pounds of fertilizer is applied to each field. Can you do that? These examples could require the installation of a fuel metering tool or load cells on a grain cart to record and upload data. Then you need to manage the data. Where will that data be stored? Who will evaluate it? What will the data reporting and auditing process look like? How much will a third-party audit cost? Are you willing to make the investments required? Making a sustainability commitment takes a serious investment in your time and money. And not just in data collection and measurement tools, but in new types of skilled labour like I.T., third-party assessments to measure carbon in the soil, new accounting systems to add carbon to a balance sheet, new equipment features, and employee training. Are you willing to change how you farm? There could be new marketing opportunities for your farm if you can prove and stand behind your GHG reduction. That may require additional upfront investment to identify these new markets and, in the case of grain marketing, a shift from a commodity approach, like number 2 corn, to an individual product, like corn harvested from a specific field with a measurable carbon reduction. This approach could also affect how you run your day-to-day operations. Have future generations bought into your plan? It’s a good idea to have multiple generations around the kitchen table as you discuss your GHG footprint. Your management decision could impact succession, the future sale of the land, what is included in the sale of the business, and whether it will translate to a premium or discount when it comes to the value of the farm business. These are just some of the factors you need to consider at a farm management level. You may, after all, decide the answer is no — your farmwill not reduce your GHG footprint at this time. As I speak today, your farm business may be unaffected. But remember, if you say no today, you may still have to address reducing your GHG footprint in the future, so be prepared, especially if the carbon market, your retail customers, or the consumer comes knocking. For more information, visit: biologicalcarbon.ca. l Jeanine Moyer Graham Gilchrist, P.Ag., CEO Biological Carbon Canada Managing your footprint BUSINESS SIDE WITH... Business side ONTARIO GRAIN FARMER 9 JUNE/JULY 2022
10 WHENTHEUKRAINE-RUSSIAcrisis began at the end of February, Russia's actions took the world by surprise. Reactions came swift and hard as countries around the world imposed economic sanctions against Russia. Ripples of those actions have been felt by farmers across the globe. Grain exports have slowed, and commodity prices have climbed, causing the cost of feeding livestock in some countries to rise to unsustainable highs. The cost of energy, fertilizer and food has also skyrocketed, and economies worldwide grapple with record inflation. War has been particularly tough on Ukraine farmers, who struggle to plant crops and care for their animals. Roman Gorobets manages nearly 5,500 acres in the Poltava region in Ukraine near Kremenchuk city, growing sunflowers, corn, winter wheat, soybeans, spring barley, and chickpeas. While there have been no battles on his farmland, fighting is just 15 km away. In early April, Gorobets walked his fields, and using a drone, he collected debris from missiles. The debris is large enough to seriously damage a tractor. It acts as a reminder that farming in the region is still risky business, as do the daily airstrike warnings, which force him and his workers underground. Gorobets is one of the luckier farmers in the region — he had secured seed and inputs before the war. The biggest challenge Gorobets faces is not being able to sell grain. Crushing plants are closed, and soy oil refineries are blocked. All major seaports are blocked by Russian troops, he says. Even if the ports were open, moving grain would still be challenging. There's a shortage of drivers — most men went to fight the war — and the shipping costs have skyrocketed as drivers have to transport through high-risk zones. While grain prices are high on the global market, they are very low domestically. Gorobets has grain storage facilities, but he's concerned about his sunflower crop, which can only be stored until June. After that, quality will diminish rapidly, he says. Liquidity is another major issue Ukrainian farmers face. Inability to sell crops means income is low at best. He says the banks will not issue loans while the country is at war. Gorobets says he's grateful he can plant. "If we didn't get all the inputs before the war, we would have a way worse situation." AIRSTRIKES DELAY PLANTING Oleh Zahorodnii is in a similar situation. Zahorodnii is the chief agronomist of a large agricultural company, Agro Expert, a supplier of seeds, fertilizers, plant protection products, and machinery. The company also cultivates nearly 2,500 acres in the region Farming in a war zone UKRAINIAN FARMERS FACE CHALLENGES HEAD-ON Melanie Epp ROMAN GOROBETS MANAGES 5,500 ACRES IN THE POLTAVA REGION IN UKRAINE. Industry News of Vinnytsia in the heart of Ukraine. While there is no fighting in the region, his days are also disrupted by airstrike sirens, forcing workers underground. Zahorodnii owns a small farm in the Chernihiv region where he grows corn, soybeans, wheat, and medicinal plants. The farm is in a war zone, which means planting season was slow to start, especially since the region is heavily laid with mines. "There are already many cases when people and equipment are blown up," he says. While Zahorodnii had no problems stocking up on seed and inputs — working for a major distributor has its benefits — fertilizer, particularly nitrogen, and fuel are hard to come by. This could impact yields, he says. On the company farm, planting began in April. "We had to slightly reduce the area under spring barley and corn, increasing the area under sunflower precisely because of problems with corn exports," he says. "Ukraine currently has huge stocks of products that were to be exported, but due to blocked ports, it is impossible," he adds. "Traders buy almost nothing." Some grain can be transported into Europe via rail, but the infrastructure isn't designed for shipping significant volumes. He says that Ukrainian farmers will not have access to working capital without the ability to sell grain. Zahorodnii believes as much as 40 per cent of farmland will not be sown. "Much of it needs demining," he says. "Farmers are also trying to sow in the occupied territories, but in most cases, this is not possible." FUNDING IS AN ISSUE Yan Ostrovskyy farms 270 acres in the Mykolaiv region in southern Ukraine. He grows corn,
ONTARIO GRAIN FARMER 11 JUNE/JULY 2022 "Some of our buyers' warehouses and stores in Kyiv region were destroyed, so they cannot pay their debts to us," he says. "Banks also closed overdraft limits because we are in red zone with a high risk of occupation and combatant actions." "Still, despite all these challenges, we are optimistic," he concludes. "We will work and find all necessary solutions, we will have a successful season, and we will win the war." l "Still, despite all these challenges, we are optimistic. We will work and find all necessary solutions, we will have a successful season, and we will win the war." Always read and follow label directions. AgSolutions, COTEGRA and PRIAXOR are registered trade-marks of BASF; all used under license by BASF Canada Inc. COTEGRA and/or PRIAXOR fungicides should be used in a preventative disease control program. © 2022 BASF Canada Inc. Protect your soybeans with our advanced fungicides. Visit agsolutions.ca/soybeanfungicides to learn more. Tough diseases in soybeans? Two can play at that game. 2971_SoybeanSolutions_Ad_OGF_2022_v2.indd 1 2022-01-24 9:48 AM sunflowers, wheat, and organic vegetables and berries. Although he did not flee the region when the war started, Ostrovskyy could not work on the farm for over a month. Airstrike alarms forced workers underground, disrupting work. "Although there are no life losses in our town, we are close to combat operations as well as to air and rocket attack locations where we can also observe civilian damages and deaths," he says. Ostrovskyy managed to purchase seed, fertilizer, and fuel for his grain crops before the war started. Vegetable production will be difficult, though, as supply chains are blocked, and many supply warehouses were destroyed in attacks. Irrigation and mulching materials are difficult to secure, he says. Like his fellow farmers, Ostrovskyy is also short on funds.
12 THE SO CALLED "climate-smart" political agenda of U.S. President Joe Biden left producers on both sides of the border nervous about potential ripple effects on the 2023 Farm Bill. That's the piece of legislation that's been created in the U.S. every five years since 1933 to support agriculture and, most lately, nutrition and food aid. From 2017 to 2022, it funnelled a staggering $428 billion into the American food and farming sectors. Given Biden's pro-environment platform, producers wondered if the bill's conservation portion (called a "title"), which accounted for about seven per cent of the last bill's total commitment, would grow at the expense of what might be considered more produceroriented titles. These include crop insurance, disaster relief and commodities, specifically corn, soybeans, wheat, cotton, rice, peanuts, dairy, and sugar. And if that was the case, would farming have to change to take advantage of conservation opportunities? Would trading partners like Canada then be expected to mirror U.S. domestic environmental practices in their own nations to do business with Americans? These are vitally important questions to the Canadian agricultural sector. But they may never be answered, pending the outcome of this fall's U.S. elections. Although Democrats started committee hearings in March to try to get a new farm bill authorized before the current one runs out, they're fighting an uphill battle. They chair the hearings now because they have a slim margin of control. But that could change. Midterm elections in the U.S. take place in November, and Americans — angry and frustrated about matters such as inflation, labour shortages and the pandemic — are expected to elect enough Republicans to Congress to change the balance of power, giving them the Farm Bill hearings chair. Political observers believe that shift could influence the farm bill's direction…but not before it stalls its progress. Republicans, expecting to take more control, aren't anxious to hurry along a new bill with Democratic features, such as more environmental emphasis. If they drag their feet into the fall — even though the current bill will expire in September 2023 and the country will have to pass ameasure extending the current authority until the next one is enacted — the Republicans like their chances of getting to fashion the new bill in their image, not Biden's. Those caught in the middle, like the highly influential U.S. National Association of State Departments of Agriculture (NASDA), are trying to stop the process from grinding to a halt. NASDA is considered the nexus between the federal government and the states on agriculture and food policy. During one subcommittee hearing, Bruce Kettler, second vice-president of the organization and director of the Indiana State Department of Agriculture, said that timely passage of the 2023 Farm Bill is needed to give farmers confidence and clarity. "It is vital Congress provides certainty by delivering a forward-looking, fully funded farm bill, on time," he says. "If the pandemic and the recent events unfolding in Ukraine have taught us anything, it is that this farm bill and all future farm bills are an issue of national security." ENVIRONMENTAL CONSIDERATIONS NASDA has cited 10 priorities for the Farm Bill including agricultural research, animal disease prevention and management, conservation and climate resiliency, cyber The 2023 Farm Bill SHIFTING PRIORITIES MAY RETURN POWER TO FARMERS Owen Roberts security, food safety, amending regulations around hemp, addressing domestic invasive species, supporting local food systems, funding for specialty crops, and trade promotion. Whoever ends up controlling the farm bill's direction and content will need to keep Americans' steadily growing interest in the environment in mind. In April, the news and polling firm Gallup reported that for the seventh straight year, U.S. public concern about the quality of the environment is near a two-decade high, with 44 per cent of Americans worrying "a great deal" about it. Compare that to the first 15 years after Gallup began tracking this public sentiment in 2001: then, closer to a third of Americans said they worried a great deal about the environment, with the figure exceeding 40 per cent only twice, in 2001 and 2007. Still, experts expect a shift in priorities. Attorney Kayla Gebeck Carroll and Senior Policy Advisor Peter Tabor of the Washingtonbased law firm Holland and Knight, who advise clients on farm bill matters, believe Republicans will put more emphasis on programs that emphasize production and increased yields. Says Gebeck Carroll: "There will be a large focus on returning power to farmers and increasing access to new markets." IMPACT ON CANADA Innovation will also be a priority. A key message coming out of Washington is to find creative ways to solve problems through collaboration and innovation. And the likelihood of the bill being held up after the midterm election means there is even more time to identify new ways to increase revenue for farmers, ranchers, and producers. Industry News
That delay could bode well for Canada. Tabor says these days, Washington considers Canada an agricultural ally. He's enthused about the way the Canadian Food Inspection Agency and its U.S. counterpart work together and how the United States Department of Agriculture and Agriculture and Agri-Food Canada are getting along. "The trade relationship between Canada and the U.S. is solid," he says. "My advice to the agri-food industry is to look for ways to make the connection even better. We share common agricultural concerns, like inflation and the effects of the Russian invasion of Ukraine. Those are big problems that will be ongoing and affect trade, and there will be differences between our countries, but we can work together to deal with them." Neither Gebeck Carroll nor Tabor are concerned about the Farm Bill expiring. In fact, the past two farm bills were extended beyond their expiration. Even though about three-quarters of the Farm Bill funds go to very time-sensitive programs such as school nutrition and food aid, the country continued doing business until it got a new one. As part of the 2014 Farm Bill, Congress enacted a one-year extension of the existing Farm Bill. During the 2018 Farm Bill negotiations, a final package was enacted in December, three months after the authority expired — with little negative impact. l ONTARIO GRAIN FARMER 13 JUNE/JULY 2022 If the pandemic and the recent events unfolding in Ukraine have taught us anything, it is that this farm bill and all future farm bills are an issue of national security. In 2022, recycle every jug Scan to learn more! info@cleanfarms.ca @cleanfarms Find a collection location near you at cleanfarms.ca LET’S MAKE IT TO Cleanfarms’ recycling helps Canadian farmers take care of their land for present and future generations. By taking empty containers (jugs, drums and totes) to nearby collection sites, farmers proudly contribute to a sustainable community and environment. When recycling jugs, every one counts. Ask your ag retailer for an ag collection bag, fill it with rinsed, empty jugs and return to a collection site. Go to cleanfarms.ca to find out about also managing empty seed and pesticide bags in your province.
14 THE UK IS Canada's largest and longeststanding agricultural trading partner in Europe, and it is currently Canada's third-largest export market and an important investment partner. Ontario Grain Farmer sat down with the Honourable Ralph E. Goodale PC, high commissioner for Canada in the United Kingdom of Great Britain and Northern Ireland, to learn more about trade opportunities for Ontario corn, soybeans, and grain products. Canada and the UK are currently negotiating a bilateral free trade agreement to replace the interim Canada UK Trade and Continuity Agreement (TCA) that came into effect in 2021 when the UK ended its membership in the EU (Brexit). Goodale shares his insights and outlooks on the new trade negotiations and what Ontario growers should watch for regarding market and exporting opportunities. Tell us about your role as the Canadian High Commissioner to the UK. I feel very privileged to have this opportunity to represent Canada in the United Kingdom. Historically, London was Canada's very first diplomatic post abroad, and today, the UK is one of our country's best international friends, partners, and allies. The role of the High Commissioner includes ceremonial and diplomatic representation to ensure Canada's voice is heard in Londonbased organizations like the Commonwealth, the International Maritime Organization, and the International Grains Council. The role also involves listening to global conversations and relaying reliable information to our own government and engaging with the British government on issues that matter to Canada — like the negotiation of a new free trade agreement between Canada and the UK, the urgent fight against climate change (both mitigation and adaptation), the free world's response to Russia's invasion of Ukraine, and emerging issues like food insecurity, and global shortages of grains, oilseeds, pulse crops, fertilizers and energy. You were raised on a farm in Saskatchewan. How has that experience shaped your perspective? I think practicality and inclusion are the major impacts of that farming background — keeping my perspective down to earth, measuring success by what all this diplomatic work actually accomplishes for real people (like farmers) back home, and remembering that those farmers are the best in the world and have a huge role to play in feeding the world, especially in the crisis circumstances that exist today. Farming in Canada always matters, now more than ever. How do Canadian Trade Commissioners support the interests of Canadian farmers? The Canadian Trade Commissioner Service helps Canadian businesses of all sizes succeed in international markets and make better, timelier, and more cost-effective decisions. Agri-food is a priority sector, and we help local UK businesses to identify and source Canadian food and drink products. We actively seek to raise awareness of the high quality of Canada's agricultural and food products. Our Trade Commissioners also have an extensive network of local contacts across the whole sector, from buyers to distributors to government officials with whomwe regularly engage on behalf of Canada. What are some of your priorities for the Canada-UK relationship? Through the negotiations towards a new bilateral free trade agreement, we have agreed to pursue an ambitious, inclusive, and sustainable agreement that will advance our climate goals, strengthen supply chains, and help our businesses thrive from digital trade. New UK trade negotiations A CONVERSATION WITH RALPH GOODALE Jeanine Moyer HIGH COMMISSIONER RALPH GOODALE. Agriculture trade is a significant part of this key bilateral relationship for Canada. The UK food supply chain employs 4.1 million people and generates over $200 billion of added value for the economy each year. The UK imports around 40 per cent of the food it consumes and relies on imports and its own agricultural sector to feed itself and drive economic growth. In 2020, the UK was Canada's fourth-largest export destination within Europe for agrifood products. Trade opportunities exist for established commodities such as Canadian wheat, dried legumes, corn and soy, and valueadded products like wine, craft beer, and spirits. A key trend in the UK is the growing demand for plant-based foods, making Canada's protein supercluster more significant and relevant. Market Development
We have given ourselves two years to complete negotiations. Canada, however, will always emphasize concluding a highstandard agreement over speed. How will the new trade agreement differ from the Trade and Continuity Agreement (TCA)? The UK is a mature market with close to 70 million consumers with lots of choice. UK consumers are highly sophisticated and view Canadian products favourably — a trend we expect to continue. The Trade Continuity Agreement gave us a good starting point to work from, but we are looking to secure an even deeper and stronger relationship through the new agreement. Agriculture is always a key issue in any trade negotiation, and many Canadian commodity exports are very important to the UK's domestic food production. Highgrade Canadian wheat is widely used and blended with UK wheat in the baking process and is an example of a win-win situation for farmers in both countries. We will be spending considerable time over the coming months looking at how Canada can help support the UK, Europe, and the rest of the world as they deal with the fallout from the Russian invasion of Ukraine and its expected impacts on food supplies across Europe, Africa, and elsewhere. Canada's ability to help fill gaps in supply chains will be crucial over the months ahead. l ONTARIO GRAIN FARMER 15 JUNE/JULY 2022 The Canadian Trade Commissioner Service helps Canadian businesses of all sizes succeed in international markets and make better, timelier, and more cost-effective decisions. Agri-food is a priority sector. JOIN US! CELEBRATE & SUPPORT AGRICULTURAL EXCELLENCE TICKETS ON SALE NOW June 24, 2022 in Guelph
16 An update on Grain Farmers of Ontario news and events YOUNG LEADERS WANTED! Grain Farmers of Ontario seeks applicants for the American Soybean Association Corteva Young Leader program. This program provides a two-phase training program that engages in leadership training that will enhance your farming operation and your service in other organizations, gives you tools to better enable you to tell your story, and provides an opportunity to meet and learn from agriculture industry leaders and other farmers. One soybean farming couple or individual will be selected as the Ontario representative for the Class of 2023. Training takes place in Iowa in November and in conjunction with the Commodity Classic in March 2023. Applications will open in early June at www.soygrowers.com. For more information, read about the experience of Kevin Vander Spek, the 2022 Ontario Young Leader, at www.ontariograinfarmer.ca; or contact Rachel Telford, manager of Member Relations, at rtelford@gfo.ca. YOUR GRAIN FARMERS OF ONTARIO TEAM Here is our next installment of profiles of your Grain Farmers of Ontario Staff to help introduce you to the team. SANKALP SHARMA, SENIOR ECONOMIST Sankalp Sharma joined Grain Farmers of Ontario in January 2022 as the senior economist. He holds a PhD in agricultural economics from the University of Nebraska — Lincoln and an MA in economics. He has worked at Kent State University (Ohio), the Food and Agriculture Organization (United Nations, Rome, Italy), the Nebraska Department of Agriculture, and the Council of Social Development. His research includes work on risk analysis, crop insurance, grain markets, and land acquisition policy. He is proficient in applied econometrics and frequently uses machine learning tools to address economic problems. Sharma has published articles in peerreviewed journals and has been invited to present papers at the Agriculture and Applied Economics Association, American Economic Association, Canadian Economic Association, International Water Resource Economics Consortium, and International Conference of Agricultural Economics conferences, the annual Land and Poverty conference held at the World Bank, and other applied economics conferences. MARY FELDSKOV, MANAGING EDITOR/ EDITORIAL SPECIALIST Mary Feldskov joined the Grain Farmers of Ontario staff in January 2022 as the managing editor of the Ontario Grain Farmer magazine. Feldskov, who grew up on a dairy farm in Huron County, has a BA from the University of Guelph. She has spent the past 20 years working in marketing and communications roles in the postsecondary education, not-forprofit, and agricultural sectors, including the Ontario Soil and Crop Improvement Association and the Universities of Guelph and Waterloo. Before joining Grain Farmers of Ontario, she worked as a marketing and communications consultant focusing on the agriculture industry. As a volunteer, Feldskov is active in several organizations, including roles as secretarytreasurer of the Eastern Canada Farm Writers Association and a board member of the Canadian Farm Writers Federation. She lives in Elmira, Ontario, with her husband and four children. FROM THE CHAIR A Q&A with Brendan Byrne, chair of Grain Farmers of Ontario. What is Grain Farmers of Ontario doing to mitigate the negative impacts of the war in Ukraine? The Russian invasion of Ukraine is horrific, and our hearts go out to Ukrainians, as well as their families here in Canada, who are suffering and fighting to survive. In April, Grain Farmers of Ontario donated $15,000 to the Canadian Red Cross to support the Ukraine Humanitarian Crisis Appeal. International conflicts, like the one in Ukraine, can have far-reaching impacts. Ontario grain farmers are impacted by fertilizer shortages and astronomical price increases due to Canadian sanctions against Russia. Since February, the Grain Farmers of Ontario Board of Directors and staff have been engaged in advocacy on this issue. We continue to push the government for actions that will help offset these rising costs and help Ontario grain farmers access the tools we need. We have, with partners, hosted a briefing for MPs and MPPs, reached out directly to the Prime Minister and the Premier of Ontario, and joined an Agriculture and Agri-Food Canada roundtable. We have also done media interviews, press releases, and letter campaigns. We need our governments to have our backs as we take neverbefore-seen risks to produce food for Canada and the world. We are also looking at 2023 and beyond to find long-term solutions that work better for Ontario farmers. • Do you have a question for our chair? Email GrainTALK@gfo.ca.
Scott will be working in the Kemptville office. She brings relevant experience working as a field crop agronomist with Harvex Agromart in eastern Ontario for the past three years. She is a graduate of the University of Guelph with a BA from the Department of Food, Agriculture and Resource Economics. SIGN UP TODAY FOR GRAINTALK E-NEWS Get the latest farm news and important Grain Farmers of Ontario updates delivered to your inbox each week! GrainTALK is Grain Farmers of Ontario’s weekly e-newsletter that highlights the organization’s latest activities, breakthroughs in research and timely production information. Sign up today and get your weekly dose of Grain Farmers of Ontario in a concise email. Go online to www.gfo.ca and click on the button. MAGAZINE SUBSCRIPTION CHANGES Farmer-members and industry associates who have changes to their mailing address or wish to cancel their subscription to the Ontario Grain Farmer magazine can contact Phaedra McIntosh, Grain Farmers of Ontario fee collection and reporting specialist, at pmcintosh@gfo.ca or 519-767-4130. MARKET COMMENTARY by Philip Shaw War in Ukraine has redefined our grain market pricing environment into something we haven’t seen before. Violent volatility and price levels not seen since 2012 have been the result. In the April 8 United States Department of Agriculture (USDA) WASDE report, Ukrainian corn exports were reduced by 4.5 MMT to 23 MMT, but these estimates were very fluid in wartime. At the same time, USDA reduced domestic corn ending stocks to 1.44 billion bushels, and soybeans stocks were reduced to 260 million bushels. In Ontario, the Canadian dollar fluttering at the 78 and 79 cents U.S. level continues to add even greater stimulus to Ontario cash prices with these inflated futures prices. Resting standing orders for grain in this volatile market environment can help manage this risk. NEW EDUCATIONAL TRAILER Grain Farmers of Ontario launched a new Good in Every Grain educational trailer at the 2022 March Classic. The 26-foot trailer replaces the 52-foot Growing Connections trailer used since 2014, and features a virtual reality 360 degree tour of a grain farm and interactive components, including trivia games and video consoles. The trailer will be featured at consumerfacing events across the province this year, including the Canada Day celebrations on Parliament Hill, the Honda Indy, the Canadian National Exhibition, the International Plowing Match, and the Royal Agricultural Winter Fair. The trailer will also be part of the Good in Every Grain educational program. It will visit schools across Ontario to teach elementary school students how grains are grown, what grains are used for, and how farmers care for the environment. The Grain Discovery Zone trailer will continue to visit smaller fairs and exhibitions in Ontario. NEW OMAFRA FIELD CROP STAFF Grain Farmers of Ontario welcomes Sophie Krolikowski, cereal crop specialist, and Laura Scott, cropping systems specialist, to the Ontario Ministry of Agriculture, Food and Rural Affairs. Krolikowski, who will work from the Stratford office, has more than five years of experience as an entomology lab technician with Agriculture Agri-Food Canada in London, Ontario. She has an M.Sc. in Environment and Sustainability from the University of Western Ontario. 17 Discover other ways to join the GrainTALK conversation: E-News, Webinars, Podcasts, Radio, Research Days, and events. Visit www.gfo.ca/ GrainTALK. ONTARIO GRAIN FARMER JUNE/JULY 2022
18 ONE OF THEworld's largest beverage alcohol companies will soon be breaking ground in St. Clair Township, the future home of a $245 million distillery that will source local corn for whisky production. Diageo, an international leader in spirits and beer, announced that the facility will be their first original carbon-neutral distillery in Canada and will supplement the existingmanufacturing operations of the Crown Royal Canadian Whisky brand. The new distillery is a "significant milestone" for the brand, the company's North American operations and global footprint, Perry Jones, Diageo's president of North America supply, says in a news release. Corn will be the primary crop used at the distillery. A company spokesperson confirmed that Diageo intends to source most of the crop locally as part of their supply strategy. PRODUCTION PLANS The St. Clair facility will sit on 400 acres near Moore Line and will include a distillery and blending and warehousing operations. The distillery is expected to be operational in 2025 and will have the capacity to produce up to 20 million litres of absolute alcohol or 10.5 million proof gallons each year. While Diageo cannot share further details of its supply strategy until the planning phase is complete, Dana Dickerson, manager of market development at Grain Farmers of Ontario, believes it will be good news for Ontario agriculture. "I think this will be a good opportunity to sell grain into the distillery and build on the strength of the existing distillation cluster we have in southern Ontario," she says. "Diageo is giving growers another option of where they can deliver grain, and this will increase the competition for corn in the area, which is really good." The new location will support momentum and growth ambitions for Crown Royal. It will not replace the brand's main production distillery in Gimli, Manitoba or Diageo's operations in Amherstburg, Ontario and Valleyfield, Quebec. CARBON FOOTPRINT Diageo's sustainability action plan, Society 2030: Spirit of Progress, will shape the design and building of the St. Clair facility. The distillery will operate with 100 per cent renewable energy to ensure the distillery is carbon neutral and zero waste goes to landfill. The company is committed to reaching netzero carbon across its direct operations by 2030, but they are also working to achieve net-zero carbon across the entire supply chain by 2050 or sooner, with an interim goal to achieve a 50 per cent reduction by 2030. Achieving carbon neutrality in Scope 1 and Scope 2 emissions is currently the focus for the St. Clair location, but in a future stage, Corn makes whisky CROWN ROYAL DISTILLERY BRINGS MARKET OPPORTUNITY Rebecca Hannam Diageo will be working with their supply chain in Canada to contribute to this goal, a company spokesperson said. When extending to Scope 3 emissions, the company may introduce certain requirements for the grain they source, or they may do something like plant trees to offset the emissions they're not able to reduce, predicts Dickerson. Last year, Diageo opened its first carbon neutral facility to distill Bulleit Bourbon in Lebanon, Kentucky. They recently announced plans to build another new carbon-neutral whisky distillery in China. LOCAL IMPACT In the County of Lambton, the announcement of Diageo's investment has created a buzz. The company says the facility will "provide dozens of jobs in the local community" once it is operational but local leaders expect the three-year construction plans to support many Ontario businesses and workers. Emery Huszka, Grain Farmers of Ontario director for District 3 (Lambton), is proud that Diageo saw value in his community. "Lambton farmers welcome the mutual benefits that this impressive facility will offer farm families in both utilizing our products and employing our next generation in its construction, servicing, and operations," he says. Market Development SCOPE 1, 2, AND 3 EMISSIONS • Scope 1: GHG emissions directly from operations that are owned or controlled by the reporting company. • Scope 2: Indirect GHG emissions from the generation of purchased or acquired electricity, steam, heating, or cooling. • Scope 3: All indirect emissions (not included in scope 2) that occur in the value chain, including both upstream and downstream emissions.
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