The Canadian challenge

Fuerty’s Michael Geraghty recently got to see at first hand the huge challenges and opportunities facing farmers in Canada, who have to battle the consequences of a severe drought, market restrictions due to BSE and cheap imports. Michael was one of 30 farmers who took part in an IFA/FBD scholarship tour to Canada. The tour visited farms and met with cooperative representatives and farms leaders across the state of Ontario which alone is ten times the size of Ireland. Dairy farmers appear to be doing best with strong milk prices (€0.42+/ litre net) and plenty of opportunity for farmers to expand, with an exodus from the industry, of the smaller operators, attracted by an extremely high price for milk quota. Like Europe, Canada has a quota system for milk and this supply management control appears to be working very well for those involved. Without quota you can’t expand and while quota is available freely to any farmer regardless of size, to acquire extra quota is extremely expensive, e.g. To buy quota for a two thousand-gallon cow currently cost about €20,000. Beef producers are experiencing the very same problems as we in Ireland with cheap imports driving down prices and high feed costs putting the future viability of the industry at risk. There is an excellent beef industry in Canada with all the main European breeds prevalent on farms with a bias towards the Angus breed. The industry was knocked to its knees with the closure of the American border following an outbreak of BSE a couple of years ago. Farmers are only now looking forward to the re-opening of their vital American market in the near future. Cheap imports from America have caused beef prices to drop from €1.15 per pound to €1 per pound in the last three months and many of the feed lots are currently losing money. It also appears that Canadian beef processors have lost significant money in the last couple of years and the only winner is the retail sector, which is enjoying huge margins. The level of husbandry on Canadian beef farms is excellent and bureaucracy and paper work a lot more practical than in Ireland. For example farmers only have to tag their beef animals when leaving their farms.  Canadian tillage farmers have had mixed fortunes this year. Maize and Soya bean yields have been very poor on many farms due to the severe drought and prices have not increased proportionally to compensate. GM seed technology is widely used and even the most sceptical Canadian farmers now admit to the benefits. Their view is clearly that GM technology benefits them by at least €70 euro per acre and no farmer expressed concerns regarding environmental risk or on commercial grounds. They simply reported that GM seed reduced workload and costs by reducing sprays. Some farmers were growing non-GM maize and soya to meet the EU demands for same and they could not understand the resistance to the use of the technology in Europe. Canadian wheat growers fared much better with significant price increases rewarding growers even where severe drought restricted yields. Canada is a vast country and Ontario, the state where we spent most of our time, is ten times bigger then Ireland and the potential to increase agriculture output is immense with the main restricting factor being water and very harsh winters. They see the development of GM technology to produce more drought and cold resistance seed can result in higher yields into the future. Canadian farmers are very hard-working and very committed family people. Their ambition is to expand and develop and leave their farming business in a strong position for the next generation to take over and continue their way of life in farming. ‘Canada is a country that has lot in common with Ireland with a huge influx of immigrants over the years a proliferation of small industry and massive inward investment from companies such as Toyota. This was a tremendous trip and I would like to thank FBD Trust and the IFA for giving me the opportunity of experiencing first hand the friendliness of the Canadian people and the potential of their agriculture.’