He noted the Corn Belt didn’t quite get the heat in July and so far in August that had been forecast and with rain to come he said, “everything is just ideal.”

“Anyone catching some rain from this point on to the end of the month, that’s going to be beneficial to corn and soybeans,” Capinegro added.

In turn, that played into the recent downward trend for soybeans and corn futures at the Chicago Board of Trade. The broker said the increases both commodities had on Aug. 14 were most likely a ‘dead cat bounce’ and the declines would soon resume.

Capinegro said the August supply and demand report from the U.S. Department of Agriculture pegged soybean ending stocks for 2024/25 at 560 million bushels, up from July’s estimate of 435 million.

“We’re in the camp that’s going to go to 600 million just because they’re overstating exports,” he stated, which would be well above the 2023/24 carryover of 345 million bushels.

However, Capinegro theorized the USDA could be factoring in an assumption that soybean prices are going to fall further and in turn that would generate greater exports.

He also suggested that soybean futures could feel more pressure should Brazil’s next crop get off to a good start. He said it’s likely there will be more soybean acres planted in Brazil for 2024/25, but not to any great extent.

The broker noted the Pro Farmer crop tour is set to begin Aug. 19, with the trade keeping an eye on the results.

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The measure, part of this spring’s federal budget, essentially gives grain shippers a choice in which railway they deal with (as long as the competitor’s line is no more than 160 kilometres away). It means a railway would have to pick up the rail cars loaded by a shipper and ‘hand off’ the cars to the other railway.

“Extended interswitching is a vital tool for Canadian shippers that is proven to increase competition while lowering costs to shippers and consumers,” Alberta Wheat tweeted in support of the Flip The Switch campaign.

The wheat commission, along with Alberta Barley and Alberta Pulse Growers, has joined a dozen other commodity groups and industry organizations in the lobbying campaign. They want the budget pledge of an 18-month trial extended to five years, and the maximum distance for interswitching upped to 500 km, so it applies to the Peace region and the Carrot River growing region of northeastern Saskatchewan.

“Extended interswitching is one of the only policy tools that has historically created competitive options for shipper business,” Wade Sobkowich, head of the Western Grain Elevator Association, said in a release.

“It offers an alternative service provider for single-served shippers which balances negotiations in a way that encourages better service or pricing for the benefit of entire supply chains.”

The railways disagree.

“Extended regulated interswitching is inherently inefficient because it introduces more operational complexity to the movement of railcars as it unavoidably requires additional hand-offs for railcars between carriers, which in turn causes increased cycle time,” CPKC, the railway formerly known as Canadian Pacific Railway, said in a response to the interswitching proposal.

“Overall, this slows down the entire rail supply chain and reduces capacity because it introduces inefficiencies that could otherwise be avoided.”

It typically takes an additional 24 to 48 hours for interswitching, the railway said, adding a move to 160-km interswitching in 2014 (that lasted four years) caused “significant harm to Canada’s supply chains.”

The alliance of grain groups calls this a “myth” on its website, arguing it actually improves efficiency.

“Extended interswitching will reduce congestion by moving traffic from a full capacity railway to a railway with excess capacity,” the website states.

And bringing a measure of competition to the country’s rail duopoly has been shown to cut freight bills, it contends.

“Data is clear that the increased competition from extended interswitching reduces costs for shippers who are using the rail network.”

The farm groups’ website also has an e-letter that producers can send to their MP. In addition to backing a five-year pilot and a 500-km interswitching distance, the letter urges the federal government to “invest in rural rail infrastructure that can accommodate larger trains to expand the use of interchanges.”

— Glenn Cheater is editor of Alberta Farmer Express.

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“The contract is the best of its kind and presented unprecedented gains in this time of economic and political uncertainty,” United Food and Commercial Workers (UFCW) Local 401 said Saturday in a statement.

“A victory has been won and this is a day to celebrate.”

Last month, the 2,000-plus employees at the High River facility south of Calgary voted heavily in favour of going on strike and the union had set Dec. 6 as their planned strike date. The workers later voted to reject an offer from Cargill that prompted the company to issue a lockout notice, also due to take effect Monday.

However, a new agreement was hammered out after “marathon” negotiations and the union recommended that its members voted in favour.

The UFCW-represented workers voted 71 per cent in favour of the new agreement, the company and union said in separate statements Saturday.

In addition to a 21 per cent wage increase (a $5/hour hike) over the life of the contract, the union also said many workers would receive more than $6,000 in bonuses — up to $4,200 in retroactive pay, a $1,000 signing bonus, and a $1,000 “COVID-19 bonus.”

The virus overshadowed the negotiations, which followed in the wake of two major outbreaks at the High River plant. The first in April 2020 resulted in a two-week shutdown, with half of the workforce reportedly infected by the virus. Two employees died after contracting COVID-19.

“As the site of North America’s largest COVID-19 outbreak, it has been a challenging time for the workers and their families,” UFCW Local 401 said in its statement. “The Cargill High River plant saw hundreds of workers grow ill, suffer, experience terror, and even die.”

The plant has capacity to slaughter about 4,500 cattle per day, about 36 per cent of Canada’s domestic beef processing capacity.

“We are pleased to have reached an agreement that is comprehensive, fair, and reflective of (the employees’) commitment to excellence at Cargill and the critical role they play in feeding families across Canada,” Jarrod Gillig, the company’s business operations and supply chain president for its North American protein lines, said in an emailed statement after the ratification was announced.

“As an organization that leads with our value to put people first, we truly believe this ratification is in the best interests of our employees and we are eager to move forward to build a stronger future — together.”

As for UFCW, it said it will now focus on the country’s other big processing plant, the JBS facility at Brooks.

“In Brooks, 2,500 employees who process beef at the JBS plant are watching the Cargill precedent carefully,” it said. “In the New Year, we head into bargaining for their new contract.”

— Glenn Cheater is editor of Alberta Farmer Express. Includes files from Glacier FarmMedia Network staff.

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“We need to think as an industry, not just as sector components,” said marketing specialist Kim McConnell, one of a trio of respected industry veterans who have spent the past year consulting players in the sector from across the country.

McConnell, along with Alberta cattlemen David Andrews and John Kolk, was asked to undertake the initiative in the wake of a stinging critique by the Canadian Agri-Food Policy Institute, which slammed the Canadian beef sector for being complacent and lacking a strategy to succeed.

The institute highlighted a number of troubling issues, including that in 2011, Canada received $3.74 for each kilogram of beef it sold in the U.S., while Americans sold us their beef, often from Canadian-raised cattle, at an average of $6.55 a kilogram. It also found American beef exports, on a value basis, have increased six times faster than Canadian ones since 2005.

The report from the Straw Man Beef Industry Initiative, released Dec. 30, calls for the creation of a new beef council and a step-by-step “results-based” strategy to make the industry more profitable, grow the national herd, and make Canadian beef the “preferred” choice at home and abroad.

BIXS 2.0

Among the recommendations are a call for more checkoff dollars for marketing and research, and creating a “BIXS 2.0” that would drive improvements in beef quality and profitability. But the key to the whole effort will be how well industry leaders work together, said McConnell.

The report recommends creating a “Council of Beef Leaders,” with its members capable of ensuring their “individual sector and association interests are parked at the door.” The group would meet twice a year and the focus would be on driving change, not creating yet another association, said McConnell.

“We do not need another organization in this industry, but (we need an) industry forum where senior representatives from all sectors of this supply chain can meet and share insights and ideas and then work together to solve them,” he said. “This is a case of where the sum is greater than the parts.”

But whether the industry sectors will be able to bring down their “many silos” to collaborate remains to be seen, he added.

“This is an industry that takes great pride in its independence, and working collectively on those areas that will advance the whole industry is going to be a challenge,” said McConnell.

The call to create BIXS 2.0 (short for Beef InfoXchange System) is another key recommendation. It would “collect, input and store all data (from genetics to production to carcass)” with the goal of improving both beef quality and profitability. Although this type of data is routinely shared between packers and feedlots, individual producers often don’t know how well their cattle rate unless they’re getting that information from a feeder to whom they regularly sell.

The current version of BIXS needs to be revamped by March and has to meet the needs of all users, the report says.

“It is imperative that the common repository be operational, efficient and sustainable,” it states.

The report calls on government to help fund and promote BIXS 2.0, saying the system needs to cover two million calves annually. It should also include information on production protocols, notably antibiotic use, and cattle genetics.

Increased national levy

To fund promotion of the system and to ramp up beef marketing, the report proposes several possible funding models, including an increase of the national levy from the current $1 per head at time of sale to up to $5. It also says a packer checkoff should be considered, but doesn’t suggest a figure.

Ultimately, it will be up to industry leaders to determine how they wish to proceed with the recommendations.

“We offered some thoughts on what should be in the plan, but the industry’s the one that needs to put that in place,” said McConnell.

The report recommends the new leaders council be led by an “independent” chair and have two reps each from the Canadian Beef Breeds Council, Canada Beef Inc., the Canadian Cattlemen’s Association, and the National Cattle Feeders Association. As well, it recommends there be two youth reps (the president of the Young Cattlemen’s Council and one other) and a “senior representative” from the packing industry.

Colin Jeffares, who recently retired as Alberta’s assistant deputy minister of agriculture, has been retained to convene the first meeting of the leaders council.

— Jennifer Blair is a reporter at Red Deer and Glenn Cheater is an editor-at-large in Edmonton for Alberta Farmer Express.

Related stories:
Co-operation key to improving Canadian beef industry (blog), Dec. 31, 2013
BIXS reboot expected to ease access to carcass data, Aug. 28, 2013

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