Montreal-based Saputo announced last Thursday it has construction underway on a new $240 million cut-and-wrap cheese plant in the Milwaukee suburb of Franklin, to be up and running at capacity by the third quarter of 2025 (all figures Cdn$).

When the new plant is ready, Saputo said it expects to transfer other packaging operations there. To that end, the company said it plans to close its plant at Big Stone City, S.D., about 200 km south of Fargo, in the third quarter of next fiscal year, and another Wisconsin plant at Green Bay in its 2025 Q3.

Also, another Saputo plant at Tulare, California previously slated to be shut down will now get $75 million in renovations to convert to string cheese packaging, to be up and running at capacity by Q3 of 2025.

After that, a Los Angeles-area string cheese packaging plant, at South Gate, will be closed and its work transferred to the converted Tulare site, about 300 km north.

Saputo said the investment at Tulare “will help support the company’s growth ambitions and sustain its leadership position in the string cheese product category.”

In all, Saputo said, while the new Franklin plant alone is expected to take on about 600 people, about 720 positions will be affected in the pending plant closures. Affected workers will be offered opportunities to relocate to other Saputo plants and, if no spots are available, the workers will get “severance and outplacement support.”

The projects announced last Thursday “aim to solidify our ability to meet current and future customer demand and further improve our cost structure,” said Saputo CEO Lino Saputo said in a release.

Improving its capacity to produce goods in its higher-margin value-added categories will “fuel our aspirations to further enhance our value proposition as a high-quality, low-cost processor” in the U.S., he said.

The plant consolidations and investments are expected to improve Saputo’s bottom line by up to $74 million per year ($55 million after taxes) by the end of its fiscal 2027, the company said.

Saputo’s U.S. dairy division makes, sells and distributes a “vast assortment” of cheeses, including mozzarella, American-style and specialty cheeses, among other products. In its fiscal 2022, ending last March 31, U.S. revenue made up 43 per cent of the company’s total.

During that fiscal year, the company said in its annual report, its U.S. dairy division was its “most challenged platform,” up against “substantial commodity volatility” as well as “labour, inflation and supply chain pressures.”

The company’s U.S. arm in fiscal 2022 booked gross revenue of $6.41 billion, up from $6.12 billion the previous year, but the U.S. arm’s EBITDA (earnings before interest, taxes, depreciation and amortization) came in at $288 million for 2022, down from $567 million.

Saputo’s U.S. sector has since booked improved revenue and EBITDA in each of its first and second quarters for fiscal 2023, for combined EBITDA of $199 million on revenue of $4.1 billion, up from $163 million on $3.039 billion in the year-earlier first half. — Glacier FarmMedia Network

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Canada is the world’s second-largest ginseng exporter after China, with most of its exports shipped to Hong Kong on their way to mainland China, Singapore and Taiwan.

The pandemic has devastated the niche trade, however, in another example of the virus’s disruption to the global food and agriculture supply chain. Outbreaks have also stopped fruit shipments, shut down meat plants and sickened migrant farm workers.

Farmers in the U.S., the fourth-largest exporter, are suffering too.

A ginseng crop can take up to five years to grow. But even as he starts this year’s harvest, Remi Van De Slyke at Norfolk County, Ont., has a barn full of last year’s ginseng.

The problem is that travel restrictions have stopped Chinese buyers from visiting to check the crop, which has depressed sales.

Canada’s diplomatic strains with Beijing haven’t helped, said Van De Slyke, chairman of Ontario Ginseng Growers Association.

“Everyone is locked down and that’s causing us a big problem,” he said. “We’re hit in all directions here.”

Across Canada, as much as 1.8 million pounds, or 20 per cent of last year’s crop, remains unsold, said Rebecca Coates, executive director of the Ontario growers association.

Canada shipped 354,305 kg worth $11 million to Hong Kong from May through July this year as coronavirus infections peaked in Canada, one-third of the value from the same period a year earlier.

Lately, some buyers have been “circling like sharks” to see if they can purchase for less than the production cost, Coates said.

Health awareness rising

Demand in China looks strong.

A Chinese medicine trader who is a long-time Canadian ginseng importer based in Xiamen city, Fujian province, says health is an even greater concern after the pandemic.

“After COVID-19, people’s awareness for health care may rise more than before (and) we may increase our imports as well,” the trader said.

Sales of Chinese-grown ginseng have spiked recently as a substitute for costlier imports, said a salesperson at a Chinese medicine shop in Baotou, Inner Mongolia.

Wholesale importers have been known to purchase as much as 100,000 pounds of ginseng individually at Ontario-based Great Mountain Ginseng, which was forced to shut its retail stores, including one at Niagara Falls, during spring lockdowns.

The stores have reopened, but the buyers and tourists have not come back, said general manager Schelling Yeh.

“We’ve been hit hard,” Yeh said. “If you’re unable to see the product are you willing to buy it?”

Canada’s agriculture ministry is trying to help the ginseng sector diversify to other markets, spokesman James Watson said.

Across the border, most U.S. ginseng is grown in Wisconsin. President Donald Trump, who is running for re-election on Nov. 3, noted farmers’ pain as he announced a new round of pandemic aid in the battleground state.

But Trump’s conflicts with Chinese leadership over trade issues have done more to discourage U.S. sales to China than the coronavirus crisis, said Wisconsin farmer Mike Burmeister.

“Chinese trade is so important to my industry. The world really is a small place when it comes to ginseng.”

— Reporting for Reuters by Rod Nickel in Winnipeg and Farah Master in Hong Kong; additional reporting by Shivani Singh in Beijing and Reuters’ Beijing newsroom.

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Canada’s dairy sector is protected by high tariffs on imported products and controls on domestic production as a means of supporting prices that farmers receive. It is frequently criticized by other dairy-producing countries.

“We’re also going to stand up for our dairy farmers,” Trump said in Kenosha, Wisconsin. “Because in Canada some very unfair things have happened to our dairy farmers and others.”

Trump did not go into detail about his concerns, but promised his administration would call the Canadian government led by Prime Minister Justin Trudeau and demand an explanation.

“It’s another typical one-sided deal against the United States and it’s not going to be happening for long,” Trump said.

Trump also reiterated his threat to eliminate the North American Free Trade Agreement with Canada and Mexico if it cannot be changed.

Canada’s dairy farmers agreed last year to sell milk ingredients used for cheese-making to Canadian processors, who include Saputo and Parmalat Canada, at prices competitive with international rates. The pricing agreement was a response to growing U.S. exports of milk proteins to Canada that missed Canada’s high tariffs.

Industry groups in New Zealand, Australia, the European Union, Mexico and the U.S. complained that the new prices for Canadian milk ingredients undercut their exports to Canada.

“President Trump’s reaction is not surprising. He is defending his domestic dairy industry,” said Jacques Lefebvre, CEO of Dairy Processors Association of Canada. “We believe that further communications with the Canadian government will broaden his perspective.”

In a statement, the Dairy Farmers of Canada industry group said it is confident that the Canadian government will “continue to protect and defend” the country’s dairy industry.

Representatives for Canada’s trade and agriculture ministers could not be immediately reached.

Heritage Minister Melanie Joly, speaking to CTV, said about the dispute that “any form of restriction (on) trade will hurt workers on both sides of the border.”

— Reporting for Reuters by Rod Nickel in Winnipeg; additional reporting for Reuters by Steve Holland in Kenosha, Ayesha Rascoe in Washington and David Ljunggren in Ottawa.

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A strain of low-pathogenic H5N2 avian flu has been discovered in a flock of 84,000 turkeys in northwestern Wisconsin’s Barron County, the U.S. Department of Agriculture (USDA) said in a report posted on the website of the Paris-based OIE.

USDA said the turkey flock was tested after birds showed signs of depression and the infected premises were quarantined.

The new outbreak comes after the detection of highly pathogenic H7 bird flu last week in a chicken breeder flock in Tennessee farm contracted by U.S. food giant Tyson Foods.

As opposed to highly pathogenic strains which can cause high mortality rates among poultry, low pathogenic ones typically cause few or no clinical signs in birds.

In 2014 and 2015, during a widespread outbreak of highly pathogenic avian flu, primarily of the H5N2 strain, the U.S. killed nearly 50 million birds, mostly egg-laying hens. The losses pushed U.S. egg prices to record highs.

Wisconsin is generally within the Mississippi flyway for migratory birds, which in Canada runs through Ontario and areas of Manitoba, Quebec and Nunavut.

USDA said tests had shown that the H5N2 virus detected in Wisconsin was of North American wild bird origin and distinct from the H5N2 viruses found in 2015.

The risk of human infection in poultry outbreaks is low, although in China more than 110 people died this winter amid an outbreak of the H7N9 virus in birds.

The detection of a first case of bird flu in the U.S. this year prompted several Asian countries, including South Korea, Japan, Taiwan and Hong Kong, to limit imports of U.S. poultry.

— Reporting for Reuters by Sybille de La Hamaide and Gus Trompiz. Includes files from AGCanada.com Network staff.

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On July 10, the National Oceanic and Atmospheric Administration (NOAA) announced that Lake Erie’s algal bloom will be “more severe in 2015” due to “historic rains in June.” On a scale of 1 to 10, forecasts NOAA, this year’s bloom will be 8.7, far higher than 2014’s mark of 6.5 “when Toledo suffered its drinking water problem.”

The problems don’t stop in Ohio.

Iowa’s water war — you may recall that the Des Moines Water Works sued three, hog-heavy Iowa counties last spring for high nitrate levels it said contaminated the city’s drinking water — began to boil anew July 7 after the Des Moines Register published an op-ed by Dennis Keeney, the now-retired, first director of Iowa State University’s Leopold Center for Sustainable Agriculture.

Keeney, a plain-spoken native son as well as a distinguished agronomy professor at Iowa State and the University of Wisconsin, chides “Midwest agricultural leaders” and Iowa’s politicians for choosing “to ignore the warning signs” of the state’s worsening water quality problems for decades.

He then lists the names of those he says have chosen to “issue a stream of denials” instead of using their leadership positions for “embracing and forwarding solutions” to address Iowa’s deteriorating water quality over the last 30 years.

The list includes long-serving Republican Gov. Terry Branstad, the “Farm Bureau,” former Iowa ag secretary Patty Judge, “agricultural industries,” and two previous Democratic governors, Chet Culver and Tom Vilsack, now the U.S. secretary of agriculture.

“Where were these leaders when action would have helped create an environmentally sustainable agriculture?” asks Keeney. “(W)eak leadership,” he asserts, “crosses political lines” and “… responds not to the need of the residents of Iowa, but to the need to keep Iowa agriculture humming along on its pathway to industrial domination.”

So, Keeney writes, the Des Moines Water Works lawsuit was a long time coming.

What wasn’t a long time coming was a smoking-hot reply from Secretary of Agriculture Vilsack. The Register posted his response on its website less than 24 hours after Keeney lit the fire under the water kettle.

Vilsack noted that as governor, then as secretary, he had “made water quality a state priority.” In fact, he had established Iowa’s first “comprehensive water-monitoring program,” sponsored its first “Water Quality Summit,” and helped shepherd $2.2 billion in federal money to “Iowa alone” for conservation programs since taking over the U.S. Department of Agriculture in 2009.

Right, and the result — like that of most local, state, and federal water quality programs aimed at farms and ranches for decades — has been that “Iowa’s water quality has continued to deteriorate,” four prominent Iowa ag leaders wrote in reply to Vilsack. “We cannot expect different results if we continue to do the same thing.”

What these four leaders (Francis Thicke, a farmer and soil scientist; Fred Kirschenmann, former director and distinguished fellow of the ISU’s Leopold Center; Kamyar Enshayan, director of the University of Northern Iowa’s Center for Energy and Environmental Education; and Keeney) propose is a “middle ground”: farm-level water quality plans — much like today’s mandated, farm-level soil conservation plans — backed by federal dollars to initiate the use of local “practices that fit (Iowa’s) own farms.”

And, suggest the four, “A good place to pilot (or test) farm-level quality plans would be in the Iowa drainage districts being sued by the Des Moines Water Works for discharging nitrate into the Raccoon River.”

That’s a rock-solid idea that could get farmers and municipalities to work together to begin to address today’s big-and-getting-bigger water quality problems while pre-empting lengthy, costly and — like the just-confirmed American Farm Bureau-financed Chesapeake Bay appellate defeat — losing lawsuits.

Mr. Secretary, your turn.

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Now, it appears, you could add manure to the list.

A new study suggests it might be possible in Manitoba to send 60 million gallons of liquid hog slurry a year through a buried pipeline up to 35 miles long.

The purpose would be to transport nutrients from municipalities with surplus manure to places that could use it, according to the study by the Winnipeg firm DGH Engineering for the Manitoba Livestock Manure Management Initiative.

The project, while technically feasible, would be enormously expensive, costing close to $43 million. It would also face significant hurdles, such as securing rights of way and alleviating public opposition to manure flowing underground past people’s homes.

But the fact it is being considered at all suggests alternatives to transporting manure in Manitoba may eventually have to be considered, said Mike Teillet, sustainable development manager for the Manitoba Pork Council, which helped fund the study.

“We didn’t really think it was going to be viable, but we thought we needed to look at it,” Teillet said.

The project is in response to surplus soil phosphorus in southeastern Manitoba’s livestock alley, where many of the province’s hog farms are located. In particular, hog manure in the municipalities of La Broquerie and Hanover sometimes exceeds local soil nutrient capacity, creating the need to transfer manure farther west where it can be safely used.

“We knew it was technically feasible. We wanted to get a costing on it,” said Teillet.

The study develops a concept design for a 14-inch-diameter high-density polyethylene pipeline buried along public road allowances. The design includes a two-million-gallon surge tank and a pumping station at the starting point with two booster pumps along the way. Three storages, each with a two-million-gallon capacity, are at the end.

The capital budget calls for a $42-million mortgage with annual payments calculated for both 10- and 25-year paybacks. The cost to pump manure through the pipeline would be 11 cents and seven cents a gallon for 10 and 25 years respectively, dropping to two cents a gallon after the mortgage expires. It would cost another 1.5 to four cents a gallon to pump manure from hog farms into the pipeline and from the pipeline to receiving fields at the other end.

The project, which would operate only during the application season, would require a general manager, a maintenance technician and a support worker.

Despite the cost, transporting manure through an underground pipeline could work, the report concludes.

“The use of a pipeline to transport manure a distance of 35 miles appears to be technically feasible, notwithstanding a manure pipeline of this scale appears to be unprecedented,” says the report.

But it adds that public concerns about potential spills could make it hard for the project to receive an environmental licence.

“An extensive environmental assessment will be required and it is recommended that a comprehensive public consultation program be implemented to address public concerns and gain public acceptance.”

The report also says the support of municipal governments on whose property the pipeline might cross “would be paramount.”

Teillet said because the idea of a manure pipeline is foreign to people, they might object to it despite the fact that sewer lines are common.

“Even though we have sewer lines all over the place, people would probably object if they had one of these things running down in front of their house.”

A current provincial moratorium on new hog operations, plus tougher regulations on manure handling, could render the idea moot anyway, said Teillet.

But if the industry ever starts to expand again, it may have to look at other ways of transporting manure besides trucking it, which is hard on roads and carries the risk of accidental spills, he said.

“When you run a bunch of trucks, things happen. As careful as people can be, things happen.”

Because the project would be so expensive, Teillet suggested it could be funded through a local co-operative or a consortium of producers in the area. Some government funding might also be available.

The idea of transporting manure by pipeline is new in Canada but not unheard of elsewhere. DGH engineer Charles Liu, who prepared the study, said he has spoken to a company in Wisconsin trying to develop a commercial project. Some hog operations in Europe pump liquid manure from a lift station through a pipeline to a digester.

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As today, antibiotic resistance resulting from its use in livestock feed was a concern, and EU scientists were recommending a phase-out. Above that story was one about Prince Charles and his concern about the safety of genetically modified food.

Insect resistance to pesticides was also in the news — an Agriculture Canada scientist said 90 per cent of the potato beetles tested in Manitoba were highly or totally resistant to at least one chemical family.

We reported on yet another barn fire with a large loss of hogs, and our editorial called for action — over the previous five years there had been an average of 46 barn fires per year with an average loss of $4.2 million.

The boom-bust U.S. dairy market was back into a boom phase, and U.S. producers were scouring the Canadian countryside for replacement heifers. Manitoba livestock broker and now-MP James Bezan said he had been selling more than 100 animals per month into Minnesota and Wisconsin.

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The infected Iowa birds were being raised near the city of Harris by Sunrise Farms, an affiliate of Sonstegard Foods, the company said.

The facility houses 3.8 million hens, according to the company, which sells eggs to food manufacturers, government agencies and retailers.

“We went to great lengths to prevent our birds from contracting AI (avian influenza), but despite best efforts we now confirm many of our birds are testing positive,” Sonstegard said in a statement.

The flock has been quarantined, and birds on the property will be culled to prevent the spread of the disease, the U.S. Department of Agriculture said. The virus can kill nearly an entire infected flock within 48 hours.

The Agriculture Department said the Iowa flock numbered 5.3 million birds. The larger figure likely represents the capacity of the farm, while the company number was the actual number of birds on site, said Bill Northey, Iowa’s secretary of agriculture.

A loss of 3.8 million birds represents more than six per cent of the egg-laying hens in Iowa and more than one per cent of the U.S. flock, meaning “there definitely will be some customers that will be impacted by this,” Northey said.

Iowa was already among 12 states that have detected bird flu in poultry since the beginning of the year. The other states are Arkansas, Idaho, Kansas, Minnesota, Missouri, Montana, North Dakota, Oregon, South Dakota, Washington and Wisconsin.

USDA has spent at least $45 million responding to the U.S. outbreak, including costs for testing, quarantines around infected facilities, and compensation for producers whose birds have been killed by the virus or culled. The figure does not include the cost to producers from the months of downtime in barns after infections have been detected.

The infections also have hurt the US$5.7 billion U.S. export market for poultry and eggs.

For producers “in the back of their head is how greatly they could be impacted by this disease,” Northey said. He did not know the monetary value of the 3.8 million birds.

Avian flu is a viral disease that infects birds. Officials believe wild birds are spreading the virus but they do not know how it is entering barns.

In Wisconsin, Governor Scott Walker on Monday declared a state of emergency after three poultry flocks became infected in the past week, according to his office. The infected birds, more than 326,000 in all, were chickens at an egg-laying facility, turkeys and a backyard flock of mixed-breed birds.

Walker has authorized the state’s National Guard to help contain the disease, citing “thin” resources available from the federal government. A state spokeswoman said guardsmen would disinfect trucks exiting infected premises.

A spokeswoman for the U.S Department of Agriculture did not respond to questions about federal resources. The agency has deployed about 60 people to Minnesota, the top U.S. turkey-producing state, which has found more infected flocks than any other state.

The U.S. Centers for Disease Control and Prevention considers the risk for human infections to be low, and no human cases have been reported.

— Tom Polansek reports on agriculture and ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by P.J. Huffstutter in Chicago.

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The Canadian Food Inspection Agency on Tuesday announced new restrictions on such products from North Dakota, Wisconsin and Iowa, following confirmed cases of H5N2 avian flu this week at commercial poultry farms in those states.

The U.S. border states of Minnesota, Washington, Idaho and Montana are already on the same list, as are California, Kansas, Arkansas, Missouri, Oregon and South Dakota.

Prohibited items include all raw poultry, eggs and poultry products and byproducts that are not fully cooked, if sourced, processed, or packaged in those states. “You may not bring these items into Canada,” CFIA said in its statement.

Commercial imports are restricted from “specific quarantine zones” within the affected states until further notice, CFIA added.

Travellers’ live pet birds from affected areas may be brought into Canada, if they’re coming with official certification from the U.S. Department of Agriculture’s (USDA) Animal and Plant Health Inspection Service (APHIS), CFIA said.

CFIA, which is also now overseeing quarantines in southwestern Ontario associated with an H5N2 outbreak at a turkey farm near Woodstock, again emphasized there’s no food safety risk associated with the restricted products.

Rather, the agency said, the bans are in place prevent avian influenza from spreading into other parts of Canada.

Examples of specific restricted items from the affected states include live birds, eggs, yolks, egg whites (albumen), hatching eggs, poultry meat (except for “fully cooked, canned, commercially sterile meat products”) and raw pet foods containing poultry products.

Feathers, poultry manure, poultry litter and laboratory materials containing poultry products or byproducts are also on the restricted list.

Wisconsin and Iowa are both in the Mississippi flyway, a flight path for migratory birds which also includes Manitoba, Saskatchewan, Nunavut and Ontario. North Dakota is in the Central flyway, which mainly runs through Saskatchewan and the Northwest and Yukon territories.

The Iowa case, confirmed Tuesday, involved a flock of 27,000 turkeys in Buena Vista County, in the state’s northwest; the North Dakota case, confirmed Sunday, involved a flock of 40,000 turkeys in Dickey County, in the state’s southeast.

The Wisconsin case, confirmed Monday, marked the first U.S. case of high-path H5N2 in commercial chickens — in this case a flock of 200,000 birds in Jefferson County, between Milwaukee and Madison. — AGCanada.com Network

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The Canadian Food Inspection Agency (CFIA) on Sunday announced it has set up an avian flu control zone, which so far includes all properties in a 10-kilometre radius around the affected turkey farm west of Woodstock, Ont.

Turkeys on the Oxford County farm were confirmed last Wednesday to have highly pathogenic (“high-path”) H5N2 avian flu. The farm, which had almost 45,000 turkeys, was completely “depopulated” of birds effective Friday, the agency said.

As of Sunday, the CFIA has quarantined and is “closely” monitoring 29 premises considered to be at risk for avian flu stemming from their assorted contacts with the Woodstock-area farm. The agency emphasized only the one infected farm has so far shown any sign of illness in its birds.

The control zone — which restricts outbound movement of captive birds, eggs and/or poultry products, as well as feed, equipment and/or work clothes exposed to captive birds– is part of an “internationally accepted practice” that’s meant to allow trade to continue from a country’s “non-infected” regions and limit any market access restrictions on those regions, the agency said.

U.S. trade, U.S. cases

The U.S., for one, recognized the 10-km radius zone as of Saturday, CFIA said. The U.S. government had moved two days earlier to temporarily ban imports of birds, hatching eggs, raw poultry meat, raw eggs and egg products, raw animal products and byproducts from all of Ontario.

Trade with the U.S. outside the Woodstock-area control zone resumes as of Monday (April 13), CFIA said Sunday.

Canada’s National Centre for Foreign Animal Disease (NCFAD) in Winnipeg has also completed tests to sequence the virus of the H5N2 strain in the Ontario case, CFIA said Sunday.

The strain in this case is “nearly identical” to the strain identified on 12 farms in British Columbia’s Fraser Valley in December, the agency said. Those farms have all since been depopulated, cleaned and disinfected and their federal quarantines have been lifted.

H5N2 has also been confirmed in commercial and backyard poultry in 11 states; North Dakota and Wisconsin both joined the list as of Saturday. North Dakota’s case was at a commercial turkey farm in Dickey County, in the state’s southeast.

Wisconsin’s new case — found in Jefferson County, between Madison and Milwaukee — marks the first U.S. case of high-path H5N2 at a commercial-scale chicken farm. Previous cases in chickens in other states were at “backyard”-sized operations.

CFIA as of Monday hadn’t yet announced restrictions on cross-border imports of live birds, eggs, raw poultry products and raw pet foods from North Dakota or Wisconsin. Given the bans imposed on such imports from other states with confirmed avian flu cases, those bans are likely to be announced soon.

Show won’t go on

The H5N2 outbreak at the Woodstock turkey farm has also led organizers of the London Poultry Show to cancel the major annual event, which until now was scheduled for April 22-23.

Ontario’s Poultry Industry Council and the event’s host, the Western Fair District, announced the cancellation Friday, based on a recommendation from the province’s Feather Board Command Centre (FBCC), the emergency response office for Ontario’s poultry and egg boards.

London’s Western Fair District is outside the new control zone, but organizers said Friday the show could present a “potential vector” for the spread of avian flu.

The show, they said, would otherwise be an “important educational opportunity,” but the risk to the industry “outweighs any potential benefits” as well as any consequences from cancelling it. — AGCanada.com Network

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