It doesn't matter if you don't have a spare $10,000 to spend on a yield monitor and a Global Positioning Systems satellite beacon for your combine, or even if you don't have the $150,000-plus to buy the combine in the first place. Satellite technology is going custom. More farmers and more companies think yield mapping is the future of agriculture, and they're finding ways to make it available to just about every farmer in the province.
Eastern Ontario cash cropper Cecil Butler invested $4,000 in a yield monitor last summer and got hooked. For this fall, he's installing GPS so he can take the yield data from his combine monitor, plug it into a computer with the satellite feed, and produce maps to show exactly how much crop he's getting from each part of every field.
For this fall, the Osgoode farmer will also be telling the farmers where he does custom combining that for a few extra dollars an acre, he'll give them yield and GPS data for their own yield maps.
"This year I think about half the farmers I work with will want to get into mapping, especially the younger ones," Butler says. "In a couple years it will be 90 per cent."
Bruce county-based Canadian Agra is insisting that all the farmers who do custom combining of its 16,000 acres have yield monitors.
"If you want to do business with us, you have to supply the monitor," says Helen Warren, controller of farm operations. Warren says Canadian Agra has been working with the technology for the past three years, and last year worked with custom combiners to get yield data for a number of fields.
"It's part of modernization," Warren says. "It's the way of the future." The custom operator must supply the yield monitor, but Canadian Agra will supply the GPS equipment, as well as the card that records the yield monitor output.
Canadian Agra also owns the computer software, and will produce yield maps internally.
But Canadian Agra won't pay farmers an extra fee for supplying the monitor, Warren says. Instead, the monitor is being built into the standard cost of custom combining, not as a separate item.
Across the province, custom operators are tacking an extra $2 to $3 an acre onto their fees for providing the yield mapping service, says Doug Aspinall, Guelph-based precision farming specialist for the provincial agriculture ministry.
Aspinall says farmers who buy the maps will get the same benefits as farmers with their own combines, and also face the same constraints.
Corn growers, for instance, will be able to plant hybrid comparisons, and then rely on the monitors for accurate reports instead of waiting at the end of the field with a weigh wagon.
The yield maps could also set off alarm bells if a field has a suspiciously low yield spot that may be more related to a broken drain, for instance, or a localized pH imbalance, than yield capability.
Aspinall warns, however, that farmers should get at least three years of yield data, including a wet year and a dry year, before they make major changes to their fertility programs based on yield readouts.
"We have to be careful," Aspinall says. "When we do a strip trial, having a monitor will make it easier to get the yields, but it won't make them any more meaningful if the trial is poorly designed."
Aspinall still sees the technology spreading rapidly throughout the province. "It's going to change life on the farm."
But some farmers are balking, and point out that a yield map's usefulness is limited if farmers can't respond with variable on-the-go fertilizer applicators and planters.
Aspinall says, however, that those farmers could get left behind. "The equipment makers are working on this," he says. "By the time you've got enough yield data to start making changes in your management, the machinery you need will be on the market."
Other companies are helping farmers make sense of the yield maps. Growmark is offering satellite-based soil sampling and fertility reports through co-ops across the province.
For $11 an acre, explains Cottam manager Murray Beggs, the co-op will use satellite equipment to map a field and divide it into 2.5 acre grids.
Co-op staff will be guided by computer to pre-selected locations to take soil samples, and then produce a report showing the farmer how phosphorus, potash, pH and organic matter levels vary across the field.
When the farmer wants the field re-sampled, usually in about three years, the satellite system will allow the sampling crew to return go to the exact spots, making first report comparisons more accurate.
"It will help a farmer with a yield monitor understand the yield variations he's seeing," Beggs says. "It will be just as much help to farmers who aren't using monitors yet by helping them maximize their fertility management."
Beggs started the year with a 3,000-acre target. "We're already at 3,500 acres, and there's a lot more interest all the time," he says. "In a couple of years, we're going to wonder how we were ever able to farm without it."
Ciba plus Sandoz equals titan
With a handshake in a Swiss boardroom earlier this month,
international giants Ciba and Sandoz agreed to merge into a
new company called Novartis.
The deal makes Novartis the world's biggest pesticide maker, as well as the world's number two seed company.
Ontario farmers are still trying to figure out whether they're going to pay the bill. "If it means less competition, it will also mean higher prices," says Hugh Zimmer, Oxford county corn and tobacco grower.
On the other hand, Zimmer says, Novartis may be big enough to save farmers from being dominated by Pioneer.
"The only thing we know for sure is that we don't have an effective anti-trust policy in this country," Zimmer says. "We've only got three major equipment manufacturers left. Now we're only going to have a handful of companies for crop inputs, yet nobody in Ottawa is looking at the effect on farmers."
Based on 1995 sales of Sandoz and Ciba, the new Novartis Corporation will boast annual sales of US$25.7 billion. Most news reports have called it a marriage of pharmaceutical giants, and indeed the new company expects to make 59 per cent of its sales in the health care field, selling everything from medicines to eyeglasses.
Novartis, however, will also earn 27 per cent of its income, about US$7 billion a year, from selling pesticides and seed to farmers.
With US$5 billion in pesticide sales, Novartis will be almost twice as big as its nearest rivals, AgrEvo and DuPont, which earn US$2.7 billion each from farm chemical sales. Lower down the list are Monsanto and Bayer, tied at US$2.6 billion, Rhone Poulenc at US$2.3 billion and DowElanco at US$2.1 billion. In seed sales, Novartis will combine Ciba Seeds and Northrup King, along with vegetable breeders Rogers and S&G Seeds, to earn US$900 million a year in sales.
The merger leaves Novartis trailing Pioneer, with its sales of US$1.5 billion a year, but well ahead of other rivals, including Limagrain at US$500 million, Cargill at US$400 million and DeKalb at US$300 million.
Novartis sources say the new company will intensify the activity of the two former companies in agriculture. Novartis has set up an agriculture division led by Wolfgang Sarno, who also sits on the powerful four-member executive committee. Novartis says it will develop new herbicides, including Peak for corn, Dual S for corn and soybeans, and four new post-emerge weed killers for the two crops.
Novartis says it will also expand its effort into biotechnology to breed corn and oilseeds with higher yields and genetic resistance to insects and diseases. In Canada, employees at Sandoz and Ciba were shocked by the March 6 announcement. "My job security has just gone down the toilet," a Sandoz representative told Farm & Country.
But a week later, employees for the two companies were more optimistic. "We've gone from being owned by a company that mentioned agriculture on page 24 of its annual report to joining forces with a company that talks about agriculture on the third line of its front page," said Bob McAuley, eastern Canada marketing manager for Sandoz.
Ciba sources said that, while Swiss negotiators had little concern about the Ontario farm market, the move does make sense. "It's a good fit," one employee said. "The current product list, with Sandoz bringing Banvel and Ciba bringing Dual and atrazine makes a good strong line-up."
Ciba and Sandoz employees hope to learn exactly how the companies will be merged following an April 28 meeting of shareholders in Switzerland.-TB
High prices make contracts a hard sell
By TOM BUTTON
This could be the best chance for more soybean growers to get in on the ground floor of the new premium-paying, identity-preserved soy industry.
More companies are offering contracts. Established companies are contracting more acres and more varieties.
And several companies say they're having a hard time finding enough high-quality farmers.
"That's our biggest challenge," says John O'Brien, manager of W.G. Thompsons. The company is contracting natto soybeans, as well as three high-protein tofu beans for which it will pay farmers $4 over the November or March futures.
Thompsons wants to boost its identity-preserved market by 10 per cent, and has had to turn to the airwaves and print ads to find the 200 farmers it needs to grow it. Most years, there's a waiting list.
"They're telling us that with good prices for commercial beans, all of a sudden the premiums don't sound so great," O'Brien says, "especially because it takes more work to meet the quality standards."
O'Brien says the company needs dependable supply. "It's a case of integrity," he says. "If the Japanese buyers find that we aren't dependable suppliers, it will open the doors to the industry in the U.S."
The key is loyalty and dependability. O'Brien says farmers who stick with identity-preserved soybeans in 1996 will be the first to get called in 1997 and beyond.
Ivan Warriner, manager of Renk Seed, is working with Maple Leaf Foods to find a Japanese buyer for the new Renk variety RS 1493 grown under tight, high-quality conditions.
RS 1493 has topped the soybean trials with over 45 per cent protein, and a test sale of 10,000 bushels this winter to a Pacific Rim soymilk maker has paved the way for a long-term supply arrangement.
The premium may be only 40 cents per bushel, Warriner says. "For most growers, that just doesn't ring the bell, not when they can get between 65 and 80 cents a bushel right now for the white hilums."
But the Renk premium is guaranteed, Warriner says. "The only time you can get a decent white hilum premium is if you don't have any. If the supply is good, as it seems to be more and more, you'll be lucky to get 10 or 20 cents."
Gary Lannin, marketing manager for First Line Seeds, says the company will double its identity-preserved contracts for 1996, and plans to double them again for 1997.
Lannin says, for instance, that First line will pay a 60-cent-a-bushel premium for Secord soybeans if stored on farm, and 30 cents if delivered to the elevator in season. Secord, he points out, has a 102-per-cent yield index in provincial government trials, and he calculates that the combination of high yield and premium will give farmers three to six-per-cent more net income per acre.
"One of the reasons the premiums might not be as high is because the yields of the new varieties are so much better," he says.
"We're getting as many farmers as we need to grow the crop, but they're asking us the same questions about premiums," Lannin says. "We're trying to keep the focus on income per acre."
A half dozen other companies are also contracting export-quality soybeans, ranging from Wheatley Elevators to Hazzards and Hensall Co-op.
Still, more companies want to get a piece of the pie. Dan Brown, manager of Inwood Grain and member of Advantage Seed Processors, is screening American varieties looking for a winner that could be sold through Maple Leaf Foods to a specific Japanese soy processor.
"We have access to four or five breeding companies in the U.S." Brown says. "We can also bid on new varieties from Ottawa, Guelph and Harrow."
Brown says export contracts could add a new level of stability to Ontario's growers, processors and traders by becoming the year-in, year-out preferred supplier to major Pacific Rim buyers.
"We haven't got a variety yet, but we hope to have one soon," Brown says. "We think there's going to be a lot more growth in identity-preserved production."
Thompson's O'Brien agrees. "Within 10 years there won't be a white-hilum market. It will be all identity preserved," O'Brien says. "If we don't supply it, somebody else will. We want it to be us."
More farmers renege on contracts
More soybean and corn growers have walked away from their
forward contracts this year. A couple will end up in court.
Some will be blacklisted. Others will work out some kind of
deal with their elevator.
"It's going to cost elevators about $1 million," says Mike Snobelen, owner of Snobelen Farm elevators at Lucknow and Ripley, and chairman of the Ontario Grain and Feed Association's grain section.
"It's hard to get accurate numbers...elevators don't like to make it too public when they're having trouble with a farmer," Snobelen says. "They don't want to get an image for being too tough."
Snobelen figures farmers have turned their backs on between 0.5 and one per cent of the forward contracts they negotiated last spring. That's about double the normal rate.
What's got the elevators worried is that most years farmers miss their delivery commitments because of crop failure, or sometimes because they contracted too much in a bid to save the farm. This year, they think some farmers simply wanted to truck their crop down the road to take advantage of rising prices.
Corn and soybean groups are standing behind the elevators, not the farmers.
"A forward contract is a commitment," says Gerry Wallis, Perth county cash cropper and director on the Ontario Corn Producers Association.
"There's no question...some people have circumvented the system," Wallis says. "I don't think it's happened a lot, but if it's just because of price, it shouldn't be happening at all."
Snobelen says he's owed grain by two farmers. "With one guy I don't really have any hope of getting my money," he says. "With the other one, we'll probably end up in court."
Snobelen says elevator operators are also talking more among themselves. "In past, if a farmer didn't meet his contract, his name would go in the bottom drawer and that would be that - we wouldn't accept any more contracts with him," Snobelen says. "Now, elevators are starting to exchange names. Some of these guys are going to have trouble doing business anywhere." Ian Carter, manager of London Agricultural Commodities, says "we've had a couple cases, the same as most years."
Carter says it's expensive for elevators, because once the farmer commits to delivery, the elevator forward-sells the expected delivery.
If the delivery doesn't show up, Carter says elevator operators have to go into the cash market and buy crop to meet delivery commitments.
If farmers renege on their contracts because the harvest price is higher than the contracted price, the elevator gets stuck with the loss. "Most farmers are very good to deal with," Carter says. "There's always some concern about running into some who aren't."
Fred Brandenburg, manager of the Ontario soybean board, says elevator operators have called the board this winter hoping to find ways to recover their loss. "This is the first time we've had dealers call us," Brandenburg says. "There isn't a lot we can tell them, except that the board strongly believes growers should honour their contracts."
Ontario farmers forward contract about 20 per cent of their corn and soybeans. -TB
Apple growers aim for export markets
By COLLEEN MELLOR Special to Farm & Country
World apple production is soaring and there's no reason why growers here can't have a piece of the pie, says an international apple expert.
World production has doubled over the last 30 years, Ellen
Terpstra, president of the International Apple Institute, a
Virginia-based grower lobby, told the recent Ontario
Horticultural Crops Conference in Mississauga.
The U.S. industry has experienced a similar "explosion of exports", she said, with exporters earning $1 to $3 more per carton as demand strengthens. World production has jumped from 18 million tonnes in the 1960s to more than 40 million tonnes in the late 1980s. In 1984, 155 million cartons were exported around the world. In 1989, 170 million were exported, and 223 million in 1994.
U.S. Department of Agriculture data shows that over the past five years, U.S. production rose five per cent, but U.S. exports grew by 82 per cent. Value of exports has risen from US$225 million in 1990 to US$423 million in 1994. U.S. exports have grown from about 20 to 25 per cent of annual fresh production, Terpstra said.
Canada's apple exports have increased, but not on the same scale, said Crosby Mitchell, statistician for the Ontario Apple Marketing Commission. Canada has consistently exported about 10 per cent of its production.
Fresh apple exports rose from about $35 million in 1990 to about $50 million last calendar year, according to Agriculture and Agri-Food Canada statistics.
Major world trends such as higher incomes in developing countries, allow a shift from subsistence diets of grains and starch to fruit and vegetables. Moreover, the population in these countries is growing, and exporting firms have launched aggressive marketing campaigns.
Top quality is crucial to building repeat sales in the export market, Terpstra told growers. In an institute survey, 100 per cent of successful U.S. apple exporters said that quality is critical to their business. But quality is in the eye of the beholder, Terpstra said. "Exporters stressed the need to pay attention to what different markets want."
Growers should try to identify the market for which they are growing and tailor choice of variety and cultural practices to it, she said.
When it comes to choosing a variety, it's difficult to generalize. In a comparison of the top 10 U.S. varieties in 1983 and 1993, the institute found increases in Granny Smith (849 per cent), Idared (74 per cent), Red Delicious (38 per cent), Rome Beauty (15 per cent) and Golden Delicious (10 per cent). Fuji and Gala production also rose, and have grown even more dramatically since 1993, Terpstra said. McIntosh, Jonathon and York production fell.
Exporters surveyed were optimistic. They said the market would absorb future increases in U.S. production; but they expected more world competition to lower margins. The market will remain volatile and risky, making higher quality even more critical, Terpstra said.
Given a list of quality factors, exporters ranked condition first, followed by bruising, colour, size, finish and shape. "There was overwhelming consensus that you had to have condition and no bruising before you could even try to export," Terpstra said.
Shipping apples to distant countries could take three weeks, she said. "This delay requires good condition from the very start."
Size and colour depend on markets. In markets where price isn't a consideration, the criteria are colour and size. Price-sensitive markets are willing to take smaller apples with less colour.
Exporters surveyed urged growers to track production costs, quality, and packout by block, and evaluate each block's profitability. The stress should be on harvest management and apple maturity, seeking the right variety mix, sufficient labour and labour supervision.
"The key to future profitability for growers is producing a high packout that achieves high quality grades," Terpstra said.