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From Statistics Canada

Equity in Canada's farm sector totalled $522.2 billion on December 31, 2018, up by $18.1 billion (+3.6%) from the same date a year earlier. This follows a 6.4% year-over-year increase from 2016 to 2017 and continues a slowdown in the growth of farm equity following the double-digit gains of 2012 and 2013. The slowdown in equity growth in 2018 occurred against a backdrop of sharply lower farm income (realized net farm income fell 45.1% in 2018).

Farm equity rose in eight provinces, ranging from 1.8% in Prince Edward Island to 5.0% in Alberta and British Columbia. Ontario's increase was 2%. Farm equity was unchanged in New Brunswick and fell 4.3% in Nova Scotia, as the value of total assets in the province decreased 1.3%, while liabilities grew 6.5%.

Farm asset values increase as a result of gains in farmland values

The value of total farm assets rose 4.4% to $623.0 billion in 2018. Almost all of the increase came from a $24.2 billion gain in the value of farmland (+6.1%), which has been rising since 1993. Farmland values rose in every province except Nova Scotia (-4.9%). According to the Farm Credit Canada "Farmland Values Report," weakness in the blueberry sector as lower prices continued into the first half of 2018, reduced fruit and vegetable production in the wake of a June frost, and reduced dairy quota volumes contributed to a decline in demand for cultivated land in that province.

Decrease in value of crop inventories slightly moderates the increase in farmland values

The increase in farmland values in 2018 was partially offset by a $1.1 billion decline in the value of inventories (-3.2%), mainly due to a $834.8 million decrease in the value of crop inventories (-4.3%), led by lentils in Saskatchewan (-24.2%) and dry peas in Alberta (-27.8%). The imposition of duties by the Indian government in late 2017 on imports of lentils curtailed exports, sharply lowering prices. These duties also applied to dry peas with similar results.

Liabilities increase, resulting in a higher debt-to-asset ratio

Total liabilities increased by 8.7% or $8.0 billion to $100.8 billion at the end of 2018. The debt-to-asset ratio, which measures the percentage of total assets that were financed by debt, rose from 15.5% in 2017 to 16.2% in 2018. This was the highest debt-to-asset ratio since 2011, slightly above the previous 10-year average of 15.9%.

Interest coverage ratio falls to lowest level since 2007

The interest coverage ratio, which measures the ability of the farm business to meet its interest payments (net income, before interest and taxes, divided by interest expenses), fell to 2.4 in 2018 from 4.1 a year earlier—its lowest value since 2007 (1.7).



After a choppy week of trading, corn and wheat prices were down while soybeans were up from the previous week. Profit-taking in the middle of the week pressured the prices in Chicago, with lower ethanol futures weighing further on the corn market. On Thursday, soybean futures led a rebound on more rain delaying an already sluggish planting season. The prices declined on Friday on the news that total U.S. export commitments for corn and beans were well behind last year’s pace. Also, forecasts for drier weather in the Midwest this week weighed on the markets.

For old crop corn, the Chicago future closed at $4.42 on Friday, down 11 cents from June 14. The new crop future (Dec.19) closed at $4.54, down 10 cents.

In Ontario, basis values were mixed as corn bids improved, including 10 cents for new crop. Soybeans and wheat were mostly lower. The Chatham-Kent (CK) high cash corn price was $5.82, down 6 cents from the previous week. The new crop high price was unchanged at $5.79.

At the same time last year, the CK high old cash price was $4.57, and the new crop was $4.68.

The old crop soybean future was up 6 cents from the previous week, at $9.03. The new crop (Nov. 19) future gained four cents, at $9.28.

The CK old cash price on Friday was $11.33 up 11 cents from the previous week. The new crop price was down 2 cents at $11.38.

Last year, the CK high old crop price was $11.41, and the new was $11.62.

For wheat, the July future in Chicago was down 13 cents from the previous week, closing at $5.26. The Grain Farmers of Ontario (GFO) Soft Red Winter Wheat cash price was down 29 cents at $6.80. The new crop (Harvest 2019) price was 16 cents lower at $7.07.

Last year, the GFO Soft Red Winter Wheat cash price was $6.21; the new crop price was $6.42.



From the Ontario Soil and Crop Improvement Association

Four tile contractors were installing innovative drainage tile at Huron County’s Huronview Demonstration Farm near Clinton, Ontario on June 15 and 350 people came out to see it. Farmers, drainage contractors and members of the public attended the Drainage Innovation Field Day. Visitors came from across Southwestern Ontario and from other parts of Canada as well as from the United States (even from California) to take part in the day. The drainage demo day included field tours on wagons, workshops, soil and water education activities, and an industry trade show.

Attendees during the day included the Honourable Ernie Hardeman, Ontario Minister of Agriculture, Food and Rural Affairs; as well as Hon. Lisa Thompson, Huron-Bruce MPP; and Ben Lobb, Huron-Bruce MP; county and municipal representatives; and other dignitaries from agricultural, drainage, and conservation organizations.

The event was run by Huron County Soil and Crop Improvement Association (HSCIA), a volunteer board of farmers who are passionate about improving soil and water quality. HSCIA has a fifteen-year agreement with the County of Huron to farm on the 47-acre Huronview Demo Farm field with cover crops, no-till, and best practices. “We knew we needed to invest in field drainage there to control erosion and we took this opportunity to try the most innovative system out there,” said Doug Walker, President of HSCIA. “By partnering with Ausable Bayfield Conservation Authority (ABCA), we’re able to use it for research.”

Organizers of the Drainage Innovation Field Day thanked the hundreds of people who attended as well as all the funding partners and other partners in the project and the volunteers who organized and ran the day.

“It is an unprecedented partnership,” said Melisa Luymes, Project Coordinator. “We brought agricultural, drainage, and environmental stakeholders together to align on innovation and research to improve soil and water quality,” she said.

This is the first time in Ontario that controlled drainage has been installed on a slope, according to Luymes. An Illinois-based drainage design company, AGREM, made plans for the site and the designers, Jeremy and Bob Meiners, worked with the contractors last week and presented their work to the crowd last Saturday.

Drainage is essential for farming, but it needs to be designed well to reduce the potential for impacts downstream, according to Luymes. “Essentially, we’re trying to ‘shut off’ drainage systems with underground control gates at certain times of the year,” she said. “It works on flat fields in Ontario, but the key to making it work on a slope is that lateral tiles need to be installed on contour at a very precise grade. Conventional tile lines usually run straight, but these curve around the field. It is quite a sight.”

The demonstration farm site features a side-by-side-by-side plot of contoured/controlled drainage, conventional drainage, and an area that remains undrained. Water quality and quantity will be measured, along with yield and soil data. The site also features a research plot comparing 15-foot and 30-foot tile spacing and a demonstration of surface drainage with terraces and a grassed waterway.

The workshops at the drainage demo day featured speakers including Kirsten Grant (University of Waterloo); Sid Vander Veen (Land Improvement Contractors of Ontario); Lynne Warriner and McKenzie Smith (Fertilizer Canada); and Dr. Jeremy Meiners (AGREM). In the soil pit, Anne Verhallen (OMAFRA); Peter Johnson (LICO); and Ross Wilson (ABCA) showed participants how field drainage works and the importance of soil health for water infiltration.

The Huronview Demonstration Farm drainage innovation project was funded and supported by dozens of partners, including the Huron County Clean Water Project, the Land Improvement Contractors of Ontario (LICO), Ducks Unlimited Canada, and Ausable Bayfield Conservation Authority (ABCA). This project was also funded in part through the Canadian Agricultural Partnership (CAP), a federal-provincial-territorial initiative. The Agricultural Adaptation Council assists in the delivery of the Partnership in Ontario.



Christian Farmers Federation of Ontario Commentary
By Brenda Dyack, CFFO Executive Director and Acting Director of Research & Policy

This past week, CFFO called on government to set higher standards for soil testing on excess soil from urban brownfields sites. Government is proposing changes in order to ease red tape for developers.

CFFO has strongly supported brownfield development because it helps to protect farmland. But we are worried that loosening up the rules could harm farmers who accept excess soil on their property. Many farmers have seen first-hand how improperly tested soil has contaminated their fields. Human health is put at risk, and farmland is permanently removed from food production.

CFFO has offered a number of recommendations to government.

First, CFFO has asked the government to enforce a tracking system for excess soil testing and transportation. Ontario has a soil evaluation tool called the Beneficial Reuse Assessment Tool (BRAT). Unfortunately, its use is not legislated or monitored. The result is that the whole excess soil sector seems to run on what is basically the honour system.

Secondly, CFFO has recommended standardized soil testing across multiple loads of excess soil leaving the brownfield. Taking soil samples from random parts of truckloads could prevent contaminated soil from being mixed in with healthy soil. We also asked for legally enforceable liability. If someone is clearly held responsible for any future soil or water contamination from excess soil, it’s more likely that rules will be followed.

Finally, CFFO noted that there are no specific protections for farmland listed in the regulations. This, despite the fact that farmers are major takers of excess soil. We asked for regulations to ensure that any excess soil placed on farm fields is of higher quality than the soil already there. We want to ensure that farmland is not degraded.

The stakes are too high here. Government is working to make the rules around testing soil for contaminants more “flexible.” In the short term, yes, these changes would make building on brownfields more attractive to developers. But in the long run, there’s no knowing how much-contaminated soil could slip through the cracks.



Ontario Federation of Agriculture Commentary
By Steve Brackenridge, OFA Director

Canada finally has a road map for a more sustainable food system with the federal government’s unveiling of its Food Policy for Canada on June 17. This is good news for all Canadians and the agri-food sector. The national policy’s broad vision sets out to ensure all Canadians have access to enough safe, nutritious and culturally diverse food, and that our food system is resilient and innovative to sustain the environment and support the economy.

The Ontario Federation of Agriculture (OFA) has worked together with the Canadian Federation of Agriculture (CFA) to develop a food strategy and has used that collaborative document to make recommendations on this policy. Although not as comprehensive as we had hoped, we are glad the new food policy has finally come to fruition.

The federal government consulted with more than 45,000 Canadians to develop the new food policy, resulting in an announced investment of $134 million to achieve the key objectives. OFA is pleased to see that some of the elements the agricultural industry has recommended have been included – addressing food access and affordability in rural and remote communities, developing local food infrastructure and promoting a Canada brand are initiatives that we can all agree on.

A central part of the policy calls for the creation of a Canadian Food Policy Advisory Council. This is a critical feature to drive the roll-out of the new policy and one that has been in the discussion from the outset of developing strategies.

Ontario is blessed with a vibrant and diverse agri-food sector – but addressing the issues of food access and food security will be key to the success of the new policy. We will continue to advocate with the government that an economically sound and sustainable agri-food industry is a pre-requisite for delivering on food security for Canadians.

OFA and CFA have also identified food literacy as an important element in a food strategy – something that is not specifically addressed in the new policy. We have been raising awareness on the importance of food literacy through our Six by Sixteen program for the past several years, and will continue to remind all governments of the need to teach future consumers how to make healthy food choices and learn lifelong food skills.

The new Food Policy for Canada is good news, and our agri-food sector is at the heart of this initiative. OFA looks forward to working with government and industry as this policy evolves and delivers economic growth, nutrition and food security for all Canadians.

Read the full Food Policy for Canada at the Government of Canada website.