The Manitoba Canola Growers Association (MCGA) won’t increase checkoffs yet, but they are taking a hard look at their future balance sheets.

Financial projections presented by the MCGA to members showed expenses growing faster than revenue, even when modelled spending growth was limited to inflation.

“We’ve got investments that are shoring that up, but as costs continue to increase, the reserves at some point will be exhausted,” said MCGA executive director Delaney Ross Burtnack.

The MCGA has postponed any decision about a checkoff jump until it completes a new strategic plan.

WHY IT MATTERS: Research, advocacy and market development all has to get done, but many of the farm groups and public agencies typically responsible for that work are under pressure to tighten their belts.

The board had sought member input through a recent survey before deciding whether to adjust the $1-per-tonne levy. Survey results on a potential levy jump were split, Ross Burtnack said.

The broad-ranging survey also floated other potential ways to address the funding shortfall.

“Some members suggested exploring future collaboration, including consideration of amalgamation with (the) Manitoba Crop Alliance to assess potential efficiencies and cost savings,” Ross Burtnack said.

The Manitoba Crop Alliance represents five Manitoba crop sectors under a shared administrative structure, including wheat and barley, winter cereals, corn, flax and sunflowers. It was officially formed in 2020.

Canola joining that umbrella model would potentially reduce administrative duplication for farmers who grow multiple crops, proponents argued.

While amalgamation did surface in the survey, the near-term focus remains the levy rate, and Ross Burtnack said the organization needs more time to weigh the options.

Planning sessions are underway to form the MCGA’s new strategic plan, according to Ross Burtnack. A proposed plan, including any levy recommendations, is expected to come back to members at next year’s annual general meeting.

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“This is about fairness and alignment,” said Trevor Welch, chair of the Canadian Beef Check-Off Agency in a June 24 news release.

The rule change applies to all interprovincial sales, including auction markets, dealers and direct farm-gate transactions,t he agency said.

The change also affects remittance chains, especially for auction marts, dealers and processors. These will have to adjust how they identify and apply check-off rates.

The agency said these changes will support compliance, consistency and transparency in the system. It will also ensure “the right amount of producer dollars stay in their home province, supporting provincial priorities.”

“Producers, provincial cattle associations and other stakeholders have been asking for a more consistent system that reflects their home province’s priorities, especially as interprovincial marketing and transport becomes more common,” Welch said.

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SaskCanola and SaskFlax said Wednesday their new “management collaboration” will translate to efficiencies for both commissions with “a full staff complement to support both boards.”

Both organizations will now operate out of the current SaskCanola office at Innovation Place, a research and technology park next to the University of Saskatchewan campus in Saskatoon.

SaskCanola’s current executive director Tracy Broughton will manage both organizations as their new exec.

The two organizations emphasized they maintain their separate boards of directors and governance structures under the new collaboration, and canola and flax levies will still be collected separately.

“Finding administrative and operational efficiencies within our industry ensures that growers’ levy dollars are put to the best use,” SaskFlax board chair Greg Sundquist of Watrous said in a joint release.

“Our commissions were created with similar mandates and key focus areas — research, extension and market development. We are excited about the opportunities this arrangement brings to oilseed growers.”

“A lot of flax growers in our province are also going to have canola in their rotation, so it makes sense,” SaskCanola board chair Charlene Bradley of Stranraer added in the same release.

The new arrangement removes a question mark over the management of SaskFlax, which in late August put out a call with the Flax Council of Canada seeking a joint executive director for SaskFlax and president for the council, with a deadline of Oct. 21.

A SaskCanola representative said Thursday the Flax Council of Canada is not involved in the SaskCanola/SaskFlax arrangement.

SaskCanola, set up in 1991, is a farmer-led, levy-supported organization backing research, advocacy and market development work, while SaskFlax, operating since 1996, supports research and market development through checkoffs on flaxseed and flax straw. — Glacier FarmMedia Network

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The checkoff amounts are unchanged to what was in place with the five amalgamating organizations, and remains refundable.

The MCA also announced Pam de Rocquigny will serve as MCA’s chief executive officer. De Rocquigny is currently the general manager of the Manitoba Corn Growers Association and Manitoba Wheat and Barley Growers Association.

Darcelle Graham, is MCA’s chief operating officer.

Graham is presently the executive director with the National Sunflower Association of Canada and Winter Cereals Manitoba.

De Rocquigny started with both organizations in February 2017. Before that she worked for Manitoba Agriculture.

Graham brings 14 years of experience in financial and project management.

Both de Rocquigny and Graham graduated from University of Manitoba’s faculty of agricultural and food sciences.

“In addition to their experience and dedication serving Manitoba farmers, Pam and Darcelle each bring a passion for agriculture, strong leadership and management skills to Manitoba Crop Alliance,” Robert Misko, MCA vice-chair, said. “MCA’s board of directors and crop committees look forward to continuing to work with them in their new roles.”

Checkoff funds collected by MCA will be invested in three main areas — research and production, market access and development, and communication and advocacy initiatives — accounting for 86 per cent of MCA’s total budget.

Each dollar spent in these areas is an investment from Manitoba farmers which helps to make wheat, barley, sunflower, corn, and flax profitable for Manitoba farmers, the MCA said.

“We extend our gratitude to the Manitoba Farm Products Marketing Council and Manitoba Agriculture and Resource Development for their guidance and support throughout the process,” said Doug Martin, secretary of MCA’s interim board. “It is an exciting hurdle to clear as we move towards Manitoba Crop Alliance becoming operational August 1, 2020.”

The MCA also unveiled its new logo developed by Think Shift.

Think Shift also designed MCA’s new website, which goes live Aug. 4.

“The shield speaks to the strength and stability that comes from the word alliance,” said MCA chair Fred Greig. “Communication with membership and industry stakeholders is a key mandate for the Manitoba Crop Alliance. We look forward to continuing to share the other communication efforts that have been developed for farmer members in August.”

The MCA was created after members of the Manitoba Wheat and Barley Growers Association, Manitoba Corn Growers Association, Manitoba Flax Growers Association, National Sunflower Association of Canada and Winter Cereals Manitoba Inc. voted in favour of amalgamating at their respective annual meetings in February.

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The Manitoba Crop Alliance (MCA) announced Monday it now has its designation under the provincial Agricultural Producers’ Organization Funding Act. The designation allows the new organization to collect mandatory-yet-refundable checkoffs on all sales of spring wheat, winter wheat, barley, sunflowers, corn and flax.

The amounts of the checkoffs are “unchanged to what was in place with the five amalgamating organizations” — the National Sunflower Association of Canada, Manitoba Corn Growers Association, Manitoba Flax Growers Association and Manitoba Wheat and Barley Growers Association and Winter Cereals Manitoba.

MCA applied in February for the designation regulation from the Manitoba Farm Products Marketing Council, following votes by the five groups’ memberships during annual general and special meetings at the CropConnect Conference in Winnipeg.

Also effective Aug. 1, Manitoba Corn Growers Association and Manitoba Wheat and Barley Growers Association general manager Pam de Rocquigny will be the MCA’s CEO, and National Sunflower Association of Canada and Winter Cereals Manitoba executive director Darcelle Graham becomes the new group’s chief operating officer.

MCA said its new checkoffs will be invested in three main areas, making up 86 per cent of MCA’s total budget: research and production; market access and development; and communication and advocacy.

“Each dollar spent in these areas is an investment from Manitoba farmers which helps to make wheat (spring and winter), barley, sunflower, corn, and flax profitable production choices for Manitoba farmers,” MCA said in a release.

Checkoff-funded initiatives “will also work to maintain and continuously improve the competitiveness of these crops both domestically and internationally.”

MCA also said Monday that its new website will go live Aug. 4. — Glacier FarmMedia Network

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KAP members voted unanimously for the fee hike at their advisory council meeting here July 30.

They also unanimously passed a motion in favour of increasing membership fees by five per cent effective Nov. 1, 2021 and Nov. 1, 2023, and then reassessing the policy.

“Part of the reason (for the increase) is KAP carried a deficit budget the last two fiscal years and a loss in 2018,” KAP general manager Patty Rosher told the meeting.

why it mattersKAP is Manitoba’s designated general farm organization, which under Manitoba law, allows it to collect a refundable checkoff on farm products at the point of sale. KAP’s mandate is to advocate in the interests of Manitoba farmers.

“This should result in an increase of $240,000 (in fiscal 2019-20) in membership revenue assuming the same membership levels.”

The additional money will “shore up” the deficit in KAP’s Farm Safety Program, cover higher staff costs following the filling of four vacant positions, and cover increased per diems for KAP directors (see ‘per diems’ further down).

“And if there is any money left over I will be asking for an increase in our training budget and research budget, which has been zero (increase) in the last few years,” Rosher said.

KAP’s last membership fee increase came in 2012 when it went up $50 or 33 per cent to the current $200, Rosher said.

The Manitoba Farm Products Marketing Council has to approve the fee increase, she said. If KAP presents its request to the council by the end of August or early September the council should have enough time to change the regulation governing KAP’s checkoff before KAP’s new fiscal year starts Nov. 1.

Several members, including Starbuck farmer Reg Dyck, said KAP needs to have a long-term membership strategy because as farms get bigger there are fewer farmers and therefore fewer potential members.

“That’s a reality and I think we should have a long-term strategy to help deal with reality,” he said.

KAP has been working on that, including by reaching out to farmers whose checkoff falls short of the $200 annual fee and asking them to leave their money in KAP, Rosher said.

KAP is also preparing to do a new strategic plan and membership will be part of it, she said.

Rosher is confident KAP’s membership will not decline due to a fee increase.

“Membership levels in KAP have more to do with the quality of the crop than necessarily with the increase in the fee,” she said.

For example, KAP memberships declined in 2011 and 2014 following widespread flooding.

“Also, a factor is a decreasing number of farmers in Manitoba, but if you look going back to 2001 we have seen a decreasing trend in KAP membership, but at a flatter level than the actual decrease in farmer memberships.”

Last fiscal year KAP had 4,757 members. As of June 30 it had 3,608 paid members, up from 3,307 and 3,477 at the same time in 2018 and 2017.

(Since the checkoff is collected incrementally as farmers sell products over the year, the number of members peaks at the end of its fiscal year.)

Farm safety program

In addition to the normal steady rise in operating costs, KAP’s budget has been pressured by changes in cost sharing its farm safety program, which requires KAP to contribute $600,000 over five years.

Under the current Canadian Agricultural Partnership the Manitoba government provides 50 per cent of the funding, down from 75 per cent under the Growing Forward 2 program.

If the province approves KAP’s request for a five per cent fee increase in 2021 and 2023, KAP will be able to budget better, Rosher said, adding, the rise will be similar to the average rate of inflation.

Higher per diems for KAP executive, directors and advisory council members, while doing KAP work, will cost the organization an estimated extra $18,800 a year, Rosher said.

KAP’s 2019 budget is an estimated $1.6 million, with a projected net loss of $32,375. With four months left in its 2018-19 fiscal year, KAP had spent $991,248 and had a net operating surplus of $54,483.

KAP’s board of directors did a lot of research before recommending an increase in fees and approving an increase in per diems, KAP president Bill Campbell said after members voted.

“It was not taken lightly and we acknowledge your unanimous support and we will do our best to carry on the best that we can,” he said.

The higher fees, if approved by the Manitoba government, will not be wasted, Campbell said in an interview later.

“It’s gratifying to see the acknowledgment (from advisory committee members) that we need funds,” he said. “It costs a fair bit to run this organization and to be an effective lobby group and to get things done.

“There are still some ongoing issues with participation. We need to get young farmers engaged. We are seeing farm sizes get a lot bigger. We’re providing a lot more services and validity to big farms now.”

KAP’s new per diems

After comparing remuneration for farmer-executives with other commodity groups, the Keystone Agricultural Producers’ board of directors approved a $25-a-day increase in per diems for its executives working for KAP.

“Moving those rates up actually brings us in line with other commodity groups that are out there,” KAP vice-president Jill Verwey told KAP’s advisory council meeting July 30.

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Farmers can calculate their total checkoff contribution by referring to their wheat and barley sale receipts. Individual farmers can claim to a maximum of 15 per cent while corporations can claim up to 35 per cent. You file a T2038 (IND) for farm proprietorships or a T2SCH31 for farm corporations.

A farmer may not claim investment tax credits (ITCs) on any portion of checkoff that has been refunded by the MWBGA.

The credit earned may be used to offset federal tax owing in the current year; or if you do not owe federal tax in the current year, a portion may be refunded to you as an individual or all may be refunded if you are a corporation (CCPC). Other options include carrying the credit forward up to 10 years to offset federal tax or carried back up to three years. All checkoff investment tax credit applied against taxes payable or refunded must be reported by the producer as income in the subsequent year.

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Producers at the Beef Farmers of Ontario (BFO) annual meeting in Mississauga on Wednesday voted 87 per cent in favour of the plan. A similar plan was rejected at last year’s annual meeting. As a constitutional change was needed, a two-thirds majority had to approve of the change.

Why it matters: The beef sector has been stagnant or declining in Ontario for years. It is hoped an increase in marketing, tied to the Ontario Corn Fed Beef Program’s successful history, can change that.

Joe Hill, who was returned as chair of the BFO at the annual meeting, said the proposal was well thought-out and was the best hope of increasing value in the Ontario beef sector.

“Today is the day to fund it and bring it to life,” he said in making a plea for the approval of the increased checkoff.

Producers heard his request, but it was not a new story for them. After last year’s failure to fund what was called the Regional Marketing Initiative, BFO staff and directors provided extensive opportunity for beef farmer delegates to learn about the proposal during numerous meetings across the province.

That extra explanation seemed to work as the mood in the room at the annual general meeting of the organization was more positive towards the proposal than it was a year ago. That showed in the questions and statements of support before voting.

“We have to try it. I have to trust the people that the people who have been appointed will do their best,” said Stewart Cressman, a Waterloo County beef farmer.

The proposal was different this year with more details on how the program will be managed. A marketing committee has been formed of members of BFO and the Ontario Cattlemen’s Association, led by OCA executive director Jim Clark.

The OCA’s 20-year-old Corn Fed Beef Program now accounts for 30-40 per cent of all cattle processed in the province and has achieved market penetration into many major supermarket chains and also into targeted markets in Asia and the Middle East.

The goal is to use the branding experience of the CFBP to drive more demand and eventually grow the sector, especially the number of cow-calf operations in the province.

“Outcomes have to benefit our beef producers from top and bottom,” said Clark at the BFO meeting. “BFO and Cattle Feeders have to develop a process that works.”

Beef farmers in Ontario have challenges others in Canada do not, such as being the landing place of 85 per cent of imports from the U.S. and with ready large markets nearby. Cow numbers have declined over the past 10 years, with a stabilizing of numbers in the past three years.

— John Greig is editor of Farmtario at Ailsa Craig, Ont. Follow him at @jgreig on Twitter.

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That’s the message organizers delivered at the first consultation meeting on two new proposed royalty options in Winnipeg Nov. 16.

“Cereals are necessary in crop rotations to prevent pest and disease pressures from emerging,” a government slide presentation said. “However, due to declining profitability relative to other crop types, acreage for wheat and barley has been declining in favour of other crops — e.g. canola.”

Only eight per cent of the money invested in Canadian cereal variety development is from private companies. The rest comes from tax dollars and farmer contributions.

In contrast private companies cover 90 per cent of the variety development costs for corn, soybeans and canola.

“Private sector activity in cereals research and variety development… has been minimal due to high rates of farm-saved seed,” the presentation said.

Why it matters: Lack of investment has long been blamed for falling wheat acreage but the productivity growth numbers don’t paint a picture of a failing crop.

When farmers save seed they are not paying royalties to breeders. Less money, means fewer new varieties are developed.

Most corn and canola is hybridized, forcing growers to buy new seed every time they plant and earning seed companies more money.

One farmer said a lack of private investment in wheat has resulted in poorer genetics making the crop less profitable for farmers to grow.

But several other farmers challenged that. One said wheat was one of the most profitable crops on his farm, accounting for a third of his seeded acreage.

That farmer also said he sows certified wheat seed every year, paying a $3-a-bushel royalty.

“I don’t mind paying that because of the results I’ve seen on my farm,” he said. “It has driven my profitability.

“I’m willing to pay to play.

“If you love growing wheat like I do… what can it hurt sitting at a table and making a deal (with seed companies)… and saying I am going to get a return, you’re going to get a return. Let’s just make sure we’re both in check.”

Boissevain farmer Mitch Janssens said average canola yields on his farm over the last 20 years jumped 64 per cent, but the percentage increase has been even higher for wheat.

That fits with crop insurance yield data from the Manitoba Agricultural Services Corporation.

Over the most recent 10 years, 2017 to 2008, spring wheat yields for varieties in the top milling quality Canada Western Red Spring class averaged 51.3 bushels an acre, up 28.6 per cent from the 2007-1998 average of 39.9.

During the same time periods canola averaged 37.8 and 30.2 bushels an acre, respectively, for a 25.2 per cent average yield increase.

Statistically both crops have seen yields increase by similar percentages.

Some of it is believed to have come from improved agronomy.

During those two 10-year periods wheat plantings in Manitoba declined 7.5 per cent, while canola jumped 39.6 per cent.

Stonewall farmer Bill Matheson suggested canola is more profitable because there’s more demand for it than wheat.

Garth Patterson, executive director of the Western Grains Research Foundation, made the same point during a panel discussion on attracting more investment to wheat Nov. 23, 2016 during the 3rd Canadian Wheat Symposium in Ottawa.

“The markets aren’t treating wheat as favourably as some of the other crops,” he said, alluding to the impact of supply and demand.

He said a Food and Agriculture Organization (FAO) report on demand for commodities such as corn, vegetable oil and sugar are driven by a growing world population and poor people earning better incomes, but wheat demand is driven only by population growth.

Between 2002 and 2004 world food prices were up an average of 73 per cent. Meat (much of it produced by feeding corn and soybean meal) went up 63 per cent, while vegetable oil and sugar jumped 68 and 215 per cent, respectively. Cereal prices, up 43 per cent, were well below the average, Patterson noted.

Average annual world corn consumption was up three per cent the last five years, but wheat consumption rose 1.8 per cent a year, International Grains Council figures showed. It projected in the next five years corn consumption will see an average increase of 1.8 per cent a year — almost double wheat’s expected one per cent annual rise.

“It makes sense because as people upgrade their diets they usually lower consumption of cereals for the other foods,” Patterson said in an interview Dec. 8, 2016. “The point I was making was, we shouldn’t expect high growth rates in cereal consumption.”

Farmers respond to market signals, Patterson said. They plant what they think will make them the most profit.

But that doesn’t mean investing in wheat innovation is a waste. Increasing wheat productivity through improved varieties and agronomic practices is what farmers need to make growing the crop more profitable, Patterson said.

Canadian Seed Trade Association president Todd Hyra made the same point in response to Matheson’s comments.

Canadian wheat yields have been rising slightly faster than the world average, Agriculture and Agri-Food winter wheat breeder Rob Graf said during that panel discussion two years ago. Between 1991 and 2012 they rose an average of 0.7 per cent a year, even though wheat hasn’t been genetically modified to resist herbicides or insect pests.

In 2016, 95 per cent of the Canada Western Red Spring wheat grown in the West were public varieties.

“From the standpoint of… yield increases, largely from the public sector, I would say we have done a really good job,” Graf said.

On-farm increases were double that due to improved agronomy.

“Long-term, stable, well-funded programs have been an effective strategy… (due to) WGRF (Western Grain Research Foundation) funding… ” Graf added.

Most of the foundation’s money came from farmers through provincial wheat checkoffs.

There are the equivalent of 11 publicly funded wheat breeders in Canada and four with private companies — one breeder for about every two million acres of wheat, Graf said.

“So I would say there is ample room for the private sector,” he added.

“My question would be… how long patience lasts in the private sector if there is no product?

Graf bred wheat for Saskatchewan Wheat Pool until it pulled out after several years.

A Bayer Crop Science official said at that same meeting five years ago Bayer decided to invest $1.9 billion into worldwide wheat over 10 years.

To encourage frank discussion AAFC asked reporters not to name or photograph participants at the royalty consultation. Some, however, later gave the Manitoba Co-operator permission to report what they said.

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Out of 1,874 votes cast, 962 votes, or 51.3 per cent, fell in favour of a refundable service charge model, with 908 for a non-refundable model and four ballots spoiled, according to the preliminary figures from the Alberta Agricultural Products Marketing Council, which conducted the vote.

Alberta Beef Producers (ABP), which collects a checkoff on cattle sales in the province, has been required to refund producers’ checkoff funds on request since 2009, when Ed Stelmach’s Tory government required any Alberta agricultural commission to refund checkoff dollars to a member upon his or her request.

The current NDP government last year blunted that legislation’s effect when it granted each of the province’s 13 ag commissions the ability to determine whether their respective checkoffs should be refundable or non-refundable.

“Our government felt it was important to empower producers to make this choice for themselves,” Agriculture Minister Oneil Carlier said in a statement Monday.

The AAPMC this fall held plebiscites for the Alberta Beef Producers and Potato Growers of Alberta on the refundability of their respective service charges. In the PGA plebiscite, 82 per cent of votes favoured of a non-refundable service charge model, Carlier noted.

The ABP plebiscite, which originally was to run from Oct. 19 to Nov. 13, was later extended to Nov. 27, as producers cited “challenging” weather conditions which led to delays in harvesting and other fall farm work.

ABP, in a release Monday, noted the results of the plebiscite can be contested by challenging the voting process to the returning officer before Dec. 11 — but the organization also said it “intends to abide by this decision of producers.”

“In a democracy, decisions are made by the people who participate and as we’ve said all along, (ABP) will honour the decision made by producers and the service charge will remain refundable,” ABP chair Charlie Christie said.

“While we wish the results were in favour of a non-refundable service charge and would have liked to see a higher voter turnout, (the Alberta Cattle Feeders Association) respects the decision of producers that voted,” ACFA chair Ryan Kasko said in the same release.

“We will continue to work hard to strengthen industry collaboration and create efficiencies regardless of the outcome.”

If Dec. 11 passes with no contests, the results of the vote will then be made official, the province said Monday.

Since 2009, ABP said, it has received “many” resolutions from producers at fall meetings and ABP delegates at general meetings pressing for a non-refundable service charge.

ABP and ACFA had reached an agreement earlier this year to support a checkoff plebiscite, on the condition that part of a non-refundable checkoff would go to create an industry development fund. A non-refundable checkoff had been expected to make $1.4 million available for such a fund.

As it is, producers will continue to pay service charges but retain the ability to request refunds. It’s recently been estimated that from what it collects each year in service charges on cattle sales, ABP refunds about a third, or $2 million, mainly to cattle feeders. — Glacier FarmMedia Network

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