The Rural Voice, 1993-04, Page 65News in agriculture
Jack Vermeeren: dollar value likely biggest parr of any price increases.
More of the same
for Ontario farmers
in 1993 — economist
Things will slowly improve for the
economy as a whole but it will be
more of the same for farmers in 1993,
an economist with the Royal Bank of
Canada told the bank's outlook
conference in Chesley, February 17.
Jack Vermeeren, Senior
Economist with the bank noted that
last year the food and beverage
component of the cost of living index
dropped for the first time in 30 years
as retailers battled for their share of a
declining consumer market. This year
it may go up by four per cent, he said,
"I can't guarantee to you that four per
cent will appear at the farm gate." He
said the dropping value of the
Canadian dollar might account for the
only increases in many farm
commodities this year. Still, he said,
any increases in prices will likely be
offset with declines in farm income
from government cutbacks in support
levels.
Vermeeren said many areas of the
economy are undergoing structural
changes that will take years to work
through. Large cities like Toronto, for
instance, have a large surplus of
commercial real estate space that will
take years to work off, he said.
Consumers are expected to be
dragged along with the recovery, not
lead it. "If you have one in 10
neighbours out of work and three or
four others worried about being out
of work, you're not going to spend
much," he observed. Wage increases
will probably be well below normal,
probably in the three per cent range,
he predicted.
The good news, according to John
Murphy, vice-president for
agriculture with the Royal Bank, is
that farmers are in relatively good
shape by comparison with the past,
and with their neighbours in the U.S.
Non-performing farm loans (those
which haven't paid interest for 90
days) dropped from $69 million in
1989 to $19 million in 1992. "The
agricultural community has treated
the Royal Bank really well."
Loans to farmers have been going
up through this period, from $3
billion in 1988 to $3.2 billion in
1992. "While we are probably more
cautious than 10 years ago, our
appetite for a good farm loan is as big
as ever," Murphy said.
Murphy used tables from U.S.
banks that judge the health of farm
accounts on a ratio of net revenues to
gross income and interest as a
percentage of gross income, to show
that Canadians farmers as a whole are
as healthy, or more so, than U.S.
farmers. Canadian supply -managed
commodities are particularly strong,
his charts showed.
Murphy stressed the importance of
working capital for farmers. "The
more of your own capital you have,
the more flexible you are," he said.0
No -till on clay soils
works too
For those who say no -till doesn't
work on clay soils, David Ainslie
provided living proof at the
Progressive Farming workshop of the
Maitland Valley Conservation
Authority in Brussels March 10, that
no -till and clay can mix.
Ainslie farms 650 acres of clay soil
in Essex County. The land had been
in soybeans for decades and there
was a lot of soil degradation and
crusting of the clay soil when he
decided to try no -till in 1989 on 25
acres of his toughest ground. "Within
a year we were 100 per cent no -till"
he told the farmers present.
He has a 15 -foot no -till drill and the
tractor that pulls it hasn't been
unhitched in three years. That
illustrates the lack of significance the
tractor plays on a no -till farm, he
said, because it doesn't have to be
used except in the spring when the
planting is done.
He uses liquid fertilizer on wheat
(he finds no benefit on soybeans) but
that's the only fertilizer he's used in
the last four or five years. On clay
soil, he says, it's important to make
sure the residue is evenly distributed
over the soil. "No -till might look ugly
for a month or so (in the spring) but
by the end of the year I don't have
any reason to complain," he says.
He credits Don Lobb with helping
establish interest in no -till in Kent
and Essex. The first workshop held in
the area had 15 farmers. Now there
are regularly 50 at meetings, and at a
demonstration day there were 200.
Like Lobb, he has moved from no -
till to other conservation projects. He
has grassed waterways and
windbreaks (he planted white cedar
several years ago but would plant
native red cedar or deciduous trees if
he was doing it today). He plans to
retire some non-productive wet spots
and turn them into frog ponds, trying
to provide a home to the increasingly -
rare leopard frog.
Ainslie has become more and more
interested in things natural since
switching to no -till. He has
introduced growing clover for seed as
part of his rotation and keeps bccs as
a hobby and to pollinate the clover .0
APRIL 1993 61