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Grim 2010 farm forecast


May 19, 2010
By The Canadian Press

Topics

May
17, 2010, Regina, SK – By his own description, Norm Nordgulen is “just a poor
cowboy” trying to adapt and survive on the farm.

May
17, 2010, Regina, SK – By his own description, Norm Nordgulen is “just a poor
cowboy” trying to adapt and survive on the farm.

The
Saskatchewan man says he’s made a lot of changes to save money. Nordgulen grows
his own hay because it’s a cheaper way to feed about 125 head of cattle he has
in his operation near Assiniboia.
About a decade ago he switched to organic farming of lentils, peas, wheat,
durum and flax.

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“One
of the big reasons I’m still here is I’m organic farming,” says Nordgulen. “I
don’t have the chemical inputs. My biggest input is fuel (to run machinery), so
I save tens of thousands on chemical inputs.

“I
would not have been able to survive this long without that.”

Nordgulen’s
feeling that “everybody’s got to adjust” seems fitting in light of the latest
farm income forecast from Agriculture Canada.

The
agency quietly released its 2010 predictions in late April, two months later
than usual. It said realized net income for farmers across Canada is expected
to total $291.5 million – a 91 per cent drop from 2009.

“Canada’s
farm sector was not immune to the global economic downturn. In fact, global
economic conditions have a far-reaching effect on farm income,” the forecast
reads.

“The
global recession has left producers facing lower consumer demand for their
products – red meats in particular.”

The
agency says the livestock sectors will continue to struggle.

Cattle
farms are expected to lose an average of $5,195 in 2010 – a drop largely blamed
on country-of-origin labelling regulations for meat products in the United
States and a strong Canadian dollar.

In
Manitoba, Quebec and Ontario, net operating incomes for hog producers are
expected to be below historical averages this year, mainly because increases in
expenses are outpacing higher receipts and program payments.

And,
after record income years in 2008 and 2009, the net income of the average grain
and oilseed farm is expected to drop, “having an impact on the overall farm
income outlook.”

Some
provinces will feel the hit more than others.

Agriculture
Canada
forecasts that realized net income for farmers in Alberta will be
negative $516.3 million this year _ a 254 per cent drop from $334.9 million in
profit in 2009. In Saskatchewan, the realized net farm income is expected to
total $980 million – a 55 per cent drop from the $2.2 billion forecast in 2009.

While
numbers are expected to be down across the country, it’s still fixing to be a
better than average year. The forecast drop for 2010 appears worse because 2008
and 2009 were record income years.

Greg
Marshall, president of the Agricultural Producers Association of Saskatchewan,
says the forecast is disappointing.

“Nobody
likes to be staring a decrease in income in the face, but actually it’s no real
surprise,” says Marshall. “I guess we all kind of expected that this was coming
with the increase in input costs and lower commodity prices and the lack of
support from existing safety net programs.”

Marshall
says he was astounded at Agriculture Canada’s predictions.

“We’re
providing sustenance to people, producing food, and when you see a 91 per cent
drop right across the nation, that's scary.”

The
Canadian Cattlemen’s Association says the recession caused a big drop in demand
for high-value cuts of beef in North America and the rising dollar also hurt
producers. Association president Travis Toews said producers have faced several
difficult years. He noted some have left the industry and others are working to
keep costs down. But Toews is trying to look on the bright side.

“Given
the tightness of cattle supplies in North America, there is some agreement that
when we do begin to emerge from this recession that we’re going to see a real
improvement in pricing,” he said.

“So
I am cautiously optimistic that we’re going to round this corner at some point.
I think we’re seeing some signs in the market today that could point to the
fact that it may not be that long in coming.''

Nordgulen
says he’s taken “a good hit” in the past, but he also expects prices to
increase this year.

The
Saskatchewan farmer says he’ll ride it out and keep working the same piece of
land that has been in his family since 1907.

“What
else is there to do? This is what I like doing. We’ve been here now 103 years.
I really don’t want to be the last one here to turn out the lights so I’m doing
whatever I can to stay here.”