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HomeMy WebLinkAboutClinton News-Record, 1977-10-20, Page 9• Record corn crop drops cattle prices • r t • • Speculation that this year's corn crop could reach a record 140 million bushels is putting a continued down- ward pressure on beef cattle prices, Graeme Hedley, secretary -manager of the Ontario Cattlemen's Association said in Hensall on September 7. With corn prices depressed at the $1.70 -a -bushel lel and considerable North American stocks left over from 1976, many farmers are feeding their corn to cattle rather than selling it, he told a joint meeting of the Huron and Middlesex cattlemen's associations. One positive influence is the recently -devalued Canadian dollar which is making it more economical for large - volume purchasers to buy cattle here rather than in the U.S. he said. "At this time last year our dollar was at par, or slightly. above par," Hedley said in an interview. "That seven per cent decline in the dollar means about $3.50 a hundred -weight higher price pn our cattle, which are now running about $47 a hundredweight." If the U.S. and Canadian dollars were at par now, the Canadian price paid farmers would be about $43.50 a hundredweight, he said. At present, U.S. producers are getting only $40, he said. But with transportation costs, duty charges and the dollar exchange rate, it is generally un -economical at this time to import U.S. beef. "A big concern now -is the impact this cheap corn will have on bringing a lot 'of cattle onto feed faster than normal, therefore keeping the down -pressure, on price probably until late next spring," he said. There are corn surpluses both in, Canada and the U.S. U.S•: analysts are predic- ting increased downward pressure on American cattle prices in December, January and February but he doesn't think the pressure will affect the Canadian price. In Ontario, where con- sumer beef prices continue to run lower than in other provinces, he doesn't foresee much change in prices. Because of an ongoing supermarket price war, beef in Ontario is being' sold at a markup only half that of some other provinces, a survey by the cattlemen's association shows. "The reason the markups (by the chain stores) are so low in the Ontario market is that we have so much com- petition," Hedley said. In Saskatchewan, the Safeway chain controls 70 per cent of the retail food market while in Ontario, four major chains and several smaller chains are fighting it out, he said. Retail markups on beef in Ontario run between 25, to 35 percent, he said, and this includes overhead, but- chering and packaging costs. "At the 25 per cent level, fellas are making no profit," he told the 130 producers attending the meeting. United Breeders to support 4-11 In a letter sent out to the 4- H co-ordinators in its service area, United Breeders Inc. *has offered beef 4-H'ers "A competition,' in four parts, designed as a test of in- telligence, self expression, showmanship and knowledge". The 4-1-1 Beef Silver Dollar Competition, as -it will be known, scheduledis for 19_7 $ , and will be open to senior 4- H'ers in the 15 southern Ontario counties serviced by the breeding„ unit'. The silver dollar reference is to the prizes - 75 silver dollars of- fered for the Grand Cham- pion, 50 to the Reserve Champion, 25 for Honorable Mention, all on engraved - silver trays. Winners of the four divisions will also receive 25 silver dollars...for the best answered senior level quiz, for the best essay on a • challenging topic of beef interest, for best showman and for best calf. This competition parallels an already existing program sponsored by United Breeders, which each year brings together top Dairy 4- H'ers from Central and Midwestern Ontario. The beef 4-11 Silver Dollar Competition is unique in being centered around a heifer calf project. Most existing senior beef com- petitions are steer shows. Dr. C. R. Reeds, General Managerand beef specialist at United Breeders explains the philosophy behind the Silver Dollar competition this way..."Since there are already many opportunities for 4-H'ers to enter steer shows, we feel it is logical for United to sponsor ..a com- petition involving breeding animals which may become for the 4-H'er an ongoing project. We want to challenge the inherent abilities of these 4-H'ers and to do everything we can to encourage and reward them." With the show scheduled for the fall of 1978, potential competitors will be selecting their heifer calves this fall and winter. ZURICH ABATTOIR Phone: 236-4939 262-2815 PHONE LORNE VINCENT, 462-2815 (RESIDENCE) "The Custom Processing Specialists" SLAUGHTER DAYS WEDNESDAYS AND FRIDAYS, FOR EITHER BEEF OR HOGS? PROCESSING PRICES BEEF: '9.00 KILLING, 9° LB. PROCRSSING, HAMBURG PATTIES LB. HOGS: '6.00 KILLING; 9' LB. CUTTING; CURING 15° LB.; SAUSAGE 12° LB. LARD 8° LB. Wholesale & Retail Cuts of Beef and Pork PRICED TO FILL YOUR FREEZER �,��'���, FREE PICKUP �`i for first-time customers � PHONE ZURICH 236-4999 11 Vlost farmers have given up on getting the white bean crop off, but are going full speed at the corn harvest, many working all night. Bumper yields are reported in many fields, h('causc of a very long growing season, despite a bad start in the spring. Here Bob Allan of 'LR. 1, Bruccfield works in a 100 acre field that is yielding 140 bushel§ to the acre of wet torn (120 dry). (News- Record photo) Farmers may lose on corn By Don Shaughnessy, CA Members of the Institute of Chartered Accountants of Ontario answer your questions in Dollar Sense. Mr. Shaughnessy is with G.H. Ward and Partners, Cobourg. Farmers growing corn this year are facing the prospect of receiving extremely low prices, and it is possible that Government subsidies will not compensate them for the cost of raising their crop. One large buyer anticipates that corn will sell for $1.40 a bushelin mid -harvest, compared to a cost of at least $2 a. bushel to produce corn. The federal government attempts to' compensate farmers in such cir- cumstances by paying them the difference between the average price of farmers received for their crop, and a floor price. This year the floor price will:be about $2,35 a bushel. If the average price for which the entire crop is sold is about $2 a bushel, the subsidy will be around 35 cents a bushel. The farmer who sells at $1.40 will receive no more of a subsidy, however, than one who sells at a higher price. He will receive the same 35 cents a bushel which, while reducing some of the pain, means he operated at a loss. The farmer who is for- tunate enough, or patient, enough to sell for more than the average price of $2 a bushel will still' receive .the full subsidy. - -A farmer with a sound market awareness will be able to avoid selling when the market is glutted and the prices depressed. Under these circumstances, it is important to avoid being part of the crowd for the contrary thinker will likely do better than the rest. It will also be important, to keep meticulous records of your crop -- what varieties were grown, what fields were used, where the corn was sold and for how much -- as sup- port yor a claim to a subsidy. Availability of the subsidy suggests that people who sold '1976 corn in the 1977 crop year might try to claim it unless the government policed farm records strictly. In the case of a farmer who raises corn in order to feed it to his cattle, a curious anomaly will probably arise, where it will actually be more profitable to sell hi's own corn and collect the subsidy, and While Supplies Last! CLEARANCE SALE BUY ONE 2 LB. CONTAINER -GET ONE FREE! COOPER DRI.KIL KILLS LICE on Cattle, Hogs, Horses, Poultry, and Ticks on Sheep --FEATURES: 1. Time tested, reliable. 2. 'Long lasting residual action. 3. Fine texture for coat penetration, superior adherence. 4. Active ingredients a) Rotenone (0.15 percent) b) Sulfur c) 5..15 percenhalene t) non toxic to be u Y� young animals. Dri-Kil is available in 2 Ib. shaker cans, 10 Ib. and 25 Ib. pails. ...for the modern farmer sM� A�A�N� animal health products Hummel's Feed Mill 35 Mary St., Clinton 482..9792 • OPEN: Mon. -Friday 8:00-6:00 pim. Saturday 8:00-12 noon then buy someone else's corn to feed his cattle. This is a technicality which most farmers would not try to exploit, and rests on the fact that no subsidy is paid unless the grain is sold in an authorized way. Even with the low price,of corn, however, there is only a remote possibility that it would be profitable to buy cattle and.feed them "cheap" coras a way of making more money. • However, cattle- prices have been rising lately, and it appears that some farmers have this prospect in mind. A similar situation that oe- curred in the late 1960s upset the cattle market for a number of years with the result that neither.: the corn producers nor the cattle farmers made money. Smile Most of us are loyal when we reach a certain age we like to stick to it. • CLINTON NEWS -RECORD, TI UIISDAY, ()MBE?), ), 1977„k,pA,Q r 9 As a major crop 1 Flax maybe back By Doug Williamson The Windsor Star Windsor's new vegetable oil mill and refinery could, help spark the revival of an agricultural commodity which at one point nearly disappeared from ' Ontario fields. The plant, to be completed in the fall of 1978,by the Maple Leaf Monarch Co., will process oilseeds, andcom- pany officials hope the new refinery capacity and' relatively steady commodity prices will bring Ontario's flaxseed pro`1c uction near the level it enjoyed just after the Second World War. In 1948, there were 72,000 acres of flaxseed planted in Ontario, mostly in an area stretching from Kincardine to Orangeville. By 1972, that acreage dwindled to 1,000, but is now up to 15,000 because of higher oilseed prices due to a world-wide shortage of oilseeds. The main reason for the severe drop in acreage was because flaxseed enjoyed lower prices than other commodities, like corn, even though flaxseed ' is better suited as a cash crop in that part of Ontario. in Essex and Kent Coun- ties, soybeans are more economical for farmers to grow because that crop is better suited to this area's warmer climate. Maple Leaf officials hope that the stronger prices and the Windsor plant's higher capacity will encourage even more flaxseed production. .Agricultural experts agree that flaxseed is a better crop for the poorer soils of South- western Ontario than corn or some other cereal grains. r)on Wright, oilseeds purchasing manager for Maple Leaf, said the com- pany is confident that flax- seed prices which are now at the $7 -per -bushel mark, will remain fairly steady for some time. "We look for the returns to the grower to be such that it'll he worthwhile to grow flax. With the (Windsor) plant going in. , .1 think that'll help increase production,'' Mr. W right said. Maple Leaf has been promoting higher flaxseed production to growers in parts of Bruce, Huron, north Lambton Grey, Perth, Uufferin and Wellington counties, where the soil and growing season are barely adequate for many other cash crops. Traditionally, livestock production has been intense in those areas,• but many farmers are looking towards cash 'cropping as a better living. "We know that the acreage has been there and we're sure it can be built up again. I think we'll look to Ontario to supply as much (flaxseed) as possible," Mr. Wright said. All Ontario flaxseed is purchased by Maple Leaf, which processes it for oil and meal at its Toronto plant. That site was expropriated by the federal government in 1972 and the new Windsor plant will have more than triple the capacity. The middleman between growers and Maple Leaf are two companies - Top Notch Feeds of Milverton, and Anderson Flax Products of Lucknow. They buy and store most of the crop until Maple Leaf buys it. Flaxseed prices are determined by the Winnipeg Futures Market, and it is generally believed that a dramatic increase in Ontario production won't bring prices down because most Canadian production is in the West. In 1976, Canadian production was I1.7 million bushels grown on '875,000 acres, and 246,602 metric tons. worth $66 million were ex- ported. Spokesman for Top Notch and Anderson said their flaxseed seed sales have increased dramatically this year - double for Anderson and 40 percent for Top Notch. But the Top Notch spokesman said flaxseed production will only increase if prices stay high, and not just becaude Maple„ Leaf is building a new plant. Milverton branch manager Andrew Storey said the crop represents a good alternative to low Corn prices. "There could be a lot more acreage grown from London north. It is one more alter- native. We have enough elevators., . .that it could be handled without too much additional elevator space being put up," Mr. Storey said. "The fact that Maple Leaf 'has the facilities . . I don't think is going to persuade the farmer to grow flax on that strength alone. The company would like to see more flax, and I would like to see more flax. "A lot of this farmland could return the farmer more with flax than with corn,".he said. However, a University of Guelph crop scientist pointed out that flaxseed traditionally On page 8 R. K. PECK APPLIANCES' "In The Heart of Down Town Varna" • Vacuum Cleaners - Sales and Service of most makes • C B Radios and Accessories - • Speed Queen Appliances • • Moffat Appliances • Smoke Sensors • Insect Lights and Fly Killing Units • Handcrafted Gifts Varna, Ont. 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