“If we want to give a signal to the poorest countries that they will have a chance in the 21st century, the United States, the United Kingdom, France and Germany must make concessions,” he said. “The United States must reduce its agricultural subsidies, and Europe must ease access for agricultural products.”

Lula assured participants during a public presentation at the Annual Meeting that trade officials from the developing world would in turn show flexibility on issues of interest to the rich countries. “Brazil will make concessions to the best of its ability, and I will try to convince the members of the G20 (the coalition of developing world countries led by Brazil, India and South Africa) to do the same. But we have to get the United States and the other rich countries to understand, or there will be no accord.”

On August 18, 2006, the United States Department of Agriculture (USDA) announced that trace amounts of a line of genetically engineered rice (LLRICE601), developed by Bayer Crop Science, had been unintentionally released in long grain rice in the United States.

This rice has been genetically engineered to be tolerant to a herbicide.

At the time of notification, the USDA and Bayer CropScience provided the Canadian Food Inspection Agency (CFIA) and Health Canada with information that allowed Canada to undertake preliminary scientific risk assessments.

These assessments indicate that the presence of LLRICE601 at levels detected in the U.S. is unlikely to pose a risk to human health, the environment or livestock.

LLRICE601 is genetically very similar to another rice line, LLRICE62, which is approved for human consumption in both the U.S. and Canada.

In addition to this very close genetic similarity, one cannot cultivate regular rice in Canada due to the climate in this country.

What is known as wild rice in Canada, is in fact a different species incapable of interbreeding with regular rice. LLRICE601, therefore, poses no environmental concern whatsoever.

The determination of the unlikelihood of risk to humans and livestock animals is underscored by close genetic similarities of LLRICE601 and the fully assessed and approved related LLRICE62, plus the levels of detection of the unapproved LLRICE601 appearing to be at a trace level.

Nevertheless, Health Canada and the CFIA are gathering additional information from Bayer CropScience and from the USDA with a view to completing Canada's risk assessment.

In addition, the CFIA has received the necessary information from Bayer CropScience to develop and validate testing methodology to identify this specific line of rice, should it be inadvertently introduced into Canada.

The Agency is validating this methodology and determining the most appropriate use for testing.

The CFIA has reminded industry that, although LLRICE601 poses no identified health, environmental or livestock safety risk, it is not approved for release into the Canadian market.

The Agency has also clarified industry's responsibility to take appropriate steps to minimize the potential for LLRICE601 to be inadvertently brought into Canada, either as food or livestock feed.

An active verification program, carried out in cooperation with industry, is to begin shortly to ascertain industry compliance.
Copyright © Grainnet

Farm liabilities at the end of 2005 reached $46.8 billion, up 4.6% from 2004, the 12th consecutive annual rise. Current liabilities advanced 4.8%, while long-term liabilities recorded an annual increase of 4.5%.

The debt-to-asset ratio progressed for a 10th consecutive year, rising to 19.6% in 2005. This ratio, which measures the dependence of farm businesses on debt, reached a new record for the 1981 to 2005 period, slightly above the 19.4% reached in 2004. The lowest ratio occurred in 1981 at 12.4%.

After reaching its lowest level in 2003 since 1981, the current assets-to-current liabilities ratio continued to edge up slightly in 2005, reaching 2.170, compared to 2.067 in 2004. The lower levels recorded in the past three years meant that operators within the agriculture sector had a lower ability to pay short-term debts, compared to the 1981 to 2002 period.

The interest coverage ratio, which indicates the ability to pay interest charges and to protect creditors from interest payment default, decreased to 2.710 in 2005, after reaching an eight-year high of 3.434 in 2004. The 2005 level remained slightly below the 10-year average of 2.774 (1995 to 2004).

Return on equity fell to 2.1% in 2005, also after reaching an eight-year high in 2004 (3.0%). The 2005 level remained slightly below the 10-year average of 2.3%.

Program payments reached a record $4.9 billion in 2005. Payments remained well above the previous five-year average of $3.9 billion. Canadian farmers received large payments through the Canadian Agricultural Income Stabilization program and the Farm Income Payment program.

The value of inventory change reached $677 million in 2005, a smaller increase than the $1.8 billion registered in 2004. Lower grain and oilseed prices in 2005 reduced the increase in the value of crop inventories compared to 2004. As well, a drop in cattle and calf inventories moderated the rise in inventory value.

As a result, the total value of agricultural production edged up to $46.4 billion. All provinces recorded increases in the total value of production, except in Manitoba, Alberta and British Columbia.

Net value added, which is the value of production minus expenses on input, business taxes and depreciation, fell 11.0% to $10.3 billion in 2005.

Interest charges and non-family wages each accounted for roughly 23% of net value added, while corporation profits accounted for roughly 16%.

US corn prices will set records for the next few years thanks to the ethanol boom despite a surge in plantings that could exceed 15 per cent by 2008, analysts told the largest US farm group.

Soybean and cotton plantings will fall due to the rush to reap profits from corn (maize). Wheat plantings were expected to rise this year.

Terry Francl, senior economist for the 6.2 million-member American Farm Bureau Federation, said the farm-gate price for corn will average $US3.25 ($A4.18) a bushel for the 2006 crop, $US3.50 ($A4.50) a bushel for this year's crop and $3.60 a bushel for the 2008 harvest. The record is $US3.24 ($A4.16) a bushel for the 1995 crop.

Zooming corn prices worry cattle, hog and poultry producers as well as food makers whether enough corn will be available for their needs. At present, ethanol makers can outbid them for corn.

Private consultant Charles Stenholm said the oil industry would join two livestock industry groups in trying to rein in federal inducements to expand ethanol output.

"That is going to be part of the debate," Stenholm told reporters on the sidelines of the American Farm Bureau Federation meeting. "Let the market be the determiner as much as possible."

One way, Stenholm said, was for Congress to reject legislation that would require larger use of ethanol. Another would be to scale back the excise tax break given to ethanol during lush times. The tax break is 51 cents a gallon.

Corn prices will range from $US3 to $US5 a bushel for up to five years due to heightened demand for corn and limited supplies, said Francl at an AFBF convention session. He forecast corn plantings of 86.5 million acres this year and 91 million acres in 2008, compared to 78.6 million acres last year.

Consulting firm Informa pegged this year's corn plantings at 85.9 million acres. Informa Vice President Jerry Sullivan said the firm would update its estimate in another week or two. It was likely to show corn plantings up slightly more and soybeans unchanged from Informa's current estimate of 70.4 million acres.

Even with larger crops, ethanol distillers would take an ever-larger share of the corn cop - 30 per cent of this year's crop and 38 per cent of the 2008 crop, Francl estimated. Twenty per cent of last year's crop will be used in making the renewable fuel.

The government will make its first estimate in February of how much of the 2007 corn will be used in making ethanol.

Cotton prices are languishing while corn prices are the highest in a decade.

Soybean farmers will reap 2.9 billion bushels of soybeans this year, Sullivan said, a downturn in production that will shrink record-large soybean surpluses to 350 million bushels by fall 2008. Farm-gate soybean prices will average $US6.50 for this year's crop.

Wheat output will be nearly 2.3 billion bushels this year, thanks to plantings of 60.5 million acres, 44 million of it in winter wheat and 16.5 million in spring wheat, Sullivan said.

Hard red spring wheat plantings will fall, mostly in the Dakotas and Minnesota, to make room for soybeans, Sullivan said. Increased double-cropping of wheat and soybeans was possible in the Corn Belt, he said.
© 2007 Reuters

Producers received prices for crops that were 3.5% below levels in October 2005, as lower overall prices were recorded for all crops except potatoes.

Prices for livestock and animal products were 4.7% below the year earlier level. This was the second consecutive decline for the overall livestock and animal products index in six months. Lower prices were recorded for cattle and calves, hogs and poultry.

Prices farmers received for their commodities fell 2.2% from September to October, as declines were recorded in both the overall crops index and the livestock and animal products index.

The Farm Product Price Index (1997=100) stood at 92.0 in October, down from a revised September index of 94.1. This decrease brought the index close to a seven-year low.

The overall crops index was lower in October compared to September as decreases were recorded in all crops except grains.

Grain prices were up in October, finding support from dwindling domestic and worldwide supplies. Poor growing conditions in many of the major wheat producing countries have yielded forecasts of very low ending wheat stocks. Feed grain prices were higher as supplies tighten, despite anticipated near-record United States corn production. The strong demand for corn is being fuelled by the growing ethanol industry.

Overall potato prices were down in October as the 2006 harvest yielded a 14.5% increase in production, despite no change in harvested area. Canada harvested the best yielding potato crop in history.

The overall index for livestock and animal products was down in October from the revised September level, as all prices decreased. The declines ranged from 0.1% for dairy to 4.7% for cattle and calf prices.

The cattle and calf index was at its lowest level since the border re-opened in July 2005 to restricted trade of live animals. Prices for feeder cattle and calves are being pressured by rapidly rising feed grain prices.

Despite falling for the fourth consecutive month in October to 73.8, the hog index was still well above the recent low of 66.1 recorded in April 2006. International exports of hogs reached record levels in 2006 while domestic slaughter slipped.

MONTREAL - After 8 years of development, the world's only farm raised short nose sturgeon crop (Acipenser Brevirostrum), has given its first commercial caviar production. Developed by a Canadian farm based in St John, New-Brunswick, the Acadian Gold also has the merit of being the first farm raised caviar in North America.

From its first harvest, this luxurious golden caviar is something Canadians can be proud about. Typically, the "Gold" variety was mostly found in 10% of the oscetra caviar harvested in the Caspian Sea. Its clean and long taste, its firm texture, as well as its golden shade make it a highly sought-after variety. This little golden luxury is now available here in North America, and fresher than ever. "I have been in the caviar business for 15 years, and I have tasted many different types of caviar, from various origins. As a proud promoter of Canadian products, I am amazed to see the kind of quality that has been reached with this farm raised caviar, now available on our tables within a couple of days of the harvest. We will certainly be the envy of caviar-enthusiastic countries" comments Bruno Marie, President of Marché Transatlantique.

This pioneering opens the door to the possibility, for Canada, to create its very own caviar culture. During its years of development by Mr Donald Breau and his team, the Acadian Gold caviar has generated a lot of anticipation by select tables. It is now possible to enjoy those Canadian "gems" in prestigious restaurants such as Leméac and Queen Elizabeth, in Montreal, Splendido and Canoe, in Toronto, Deep Cove Chalet, in British Columbia, as well as Bish in Nova Scotia. The Acadian Gold is proudly distributed in Canada, to restaurants and individuals, by Marché Transatlantique, as a feature product of the prestigious "Transatlantique Selection ."

TORONTO - on December 12, 2006 CropLife Canada expressed its support for Minister of Health Tony Clement's two new regulations to govern pesticide use as part of Canada's Chemicals Management Plan.

"The crop protection industry has always worked closely with government regulators to ensure that our products are as effective and safe as possible, for both people and the environment," said Lorne Hepworth, President of CropLife Canada. "We have great confidence in Canada's stringent regulatory system for pest control products and we look forward to working co-operatively with the government in terms of implementing these new regulations next spring under the Chemicals Management Plan."

Pest control products are regulated in Canada under the federal Pest Control Products Act. The Act and the Pest Control Products regulations together provide the legislative mandate to regulate pest control products in Canada. Minister Clement's announcement today of two new regulations regarding adverse effects reporting and sales information reporting have been the subject of ongoing consultations.

Health Canada's Pest Management Regulatory Agency (PMRA) administers both the Act and regulations on behalf of the Minister of Health. A new Pest Control Products Act was given Royal Assent on December 12, 2002, and was brought into force with the revised Regulations on June 28, 2006. The new Regulations announced today by Minister Clement are to take effect in the New Year.

Hepworth said CropLife Canada supports Minister Clement's decision to have incident reporting and sales reporting directed to the PMRA, whose experienced scientists are in the best position to use this information in managing risks to the public.

Hepworth also applauds the government's decision to heighten transparency of the regulatory system by posting the results of the incident and sales reports on the PMRA's website. "These efforts not only improve how products are regulated but also contribute to public confidence in the regulatory process," he said.

In announcing the Chemicals Management Plan last week, Prime Minister Stephen Harper acknowledged the role pest control products play "to improve the quality of our lives, to increase food production, to cure illness, and to bring us many of the comforts and conveniences of modern life."

"Health Canada has had a strong program for re-evaluating current pest control products underway for some time. This announcement strengthens these efforts and adds new resources to this important work," Hepworth said.

CropLife Canada is the non-profit trade association representing manufacturers, developers and distributors of plant life science solutions for agriculture, forestry and pest management. Its members are committed to sustainable pest management that benefits not just their industry, but its millions of consumers and the environment in which we all live.

Invasive pests could cause even more damage to Canadian trees as the climate warms, say University of Guelph researchers. They’ve just finished a report linking climate change to the likely spread of pests in Canadian forests and cities.

In the report, Prof. Shelley Hunt of the Department of Environmental Biology maps out areas in Canada that could be invaded by tree pests in a warmer future. She says the predictive maps can help scientists and regulators prepare for new pest invasions.

“We need to be ready for increased pressure from tree pests as the climate warms,” said Hunt. “The maps in our report help by drawing a clearer picture of where, when, and which invasive species will be able to spread because of higher temperatures.”

Hunt’s maps focus on four exotic invaders: the brown spruce longhorn beetle, the European wood wasp, the Asian gypsy moth and the Asian long-horned beetle. Using reviews of scientific literature that have tracked the species’ trends in Canada, Hunt matched each pest’s survival range to temperature models generated using two complex computer programs called the Canadian Coupled Global Circulation Model and the Hadley Circulation Model. These programs predict how high temperatures will rise, based on the expected greenhouse gas emissions in a certain number of years.

In this way, she was able to predict just how each invader might take advantage of temperature increases, mapping survival and habitat ranges for the years 2020, 2050 and 2080.

According to the models, Hunt says increasing greenhouse gases (GHGs) emitted into the atmosphere mean higher temperatures and more treed areas becoming susceptible to attack from pests. Trees normally store carbon for use for energy and growth from carbon dioxide gas in the atmosphere. But when pest damage occurs, trees are less effective carbon “sinks.” For example, when large old trees in a forest are killed by an insect pest, they are replaced with small young trees that store less carbon.

Also, some tree species store more carbon than others. Oak trees, for example, have denser wood and store more carbon than pine trees. If an insect outbreak results in one tree species dying off and being replaced by another, the carbon storage capacity of the forest could change.

The Asian gypsy moth, which feeds on oak leaves, is currently limited by Canada’s cold climate. But Hunt’s report shows that even under a low GHG emissions scenario, the climate will be warm enough for it to spread widely in every province by 2050.

Warmer temperatures don’t just increase the range over which invasive species can survive Canada’s cold winters. They also result in a longer growing season for insects, potentially allowing them to produce more generations each year and increasing their populations.

Hunt says there’s a long list of invasive species that still need more in-depth research. In addition to the mapped species, her report takes a detailed look at pests such as hemlock woolly adelgid, sudden oak death, and emerald ash borer, which recently killed trees lining city streets in Windsor, Ont. She notes that insects are not always the bad guys in forest ecosystems – many native insects have beneficial roles that are still not fully understood.

Ultimately Hunt hopes her research and maps can be used to better understand the effects of climate change on forests, and to help find measures to control invasive pests.

“Understanding which factors limit pest survival, such as natural predators in native habitats, will lead to effective measures to minimize the impacts of these invasive species,” said Hunt.

Other collaborators in this research were Profs. Gard Otis and Jonathan Newman, Department of Environmental Biology. Funding was provided by the BIOCAP Canada Foundation.

For media questions, contact Communications and Public Affairs: Lori Bona Hunt, 519 824- 4120, Ext. 53338, or Rachelle Cooper, Ext. 56982.

Farmers received $23.4 billion in market revenue between January and September, up 0.6% from the same period last year. This total was 3.5% below the 2001 peak of $24.2 billion, and only 0.9% above the previous five-year average between 2001 and 2005.

Crop receipts amounted to $10.1 billion, up 3.9% over the January to September period last year and 1.1% higher than the previous five-year average. Large production in both 2005 and 2006 contributed to increased deliveries of grains and oilseeds. Consult the "Estimates of production of principal field crops" released in The Daily of October 5, 2006.

On the other hand, livestock receipts fell 1.8% to $13.3 billion, as lower hog revenues more than offset higher cattle and calf receipts. However, livestock revenues were 0.7% above the previous five-year average, which included the impact of the bovine spongiform encephalopathy (BSE) crisis.

Farmers received $3.5 billion in program payments during the first nine months of 2006, down 9.4% from the record high set over the same period in 2005. Despite the decline, the total was 18.4% above the previous five-year average.

Total farm cash receipts, crop and livestock revenues plus program payments, were $26.9 billion through the first nine months of 2006. This was 0.9% lower than the record for the same period in 2005, but 2.9% higher than the five-year average.

Provincially, farm cash receipts declined in Nova Scotia, Ontario and Manitoba. They remained nearly flat in Quebec, Alberta, and British Columbia while increasing to record levels in the remaining provinces, except in Saskatchewan.

Farm cash receipts provide a measure of gross revenue for farm businesses. They do not account for expenses such as wages, fuel and feed costs incurred by farmers. Cash receipts can vary widely from farm to farm because of several factors, including commodities, price and weather.

Canola and wheat deliveries boost crop receipts

Deliveries of the two major crops (wheat and canola) boosted crop receipts between January and September. For the most part, farmers drew on record high stocks from the 2005 harvest. Prices started to rise in the third quarter of 2006 in the wake of concerns over lower global production. However, the strong Canadian dollar continued to keep prices under pressure.

Canola receipts increased 37.3% to $1.8 billion, the result of record marketings for the period. Marketings surged by 40.8% between January and September this year, while average prices were 2.5% lower.

Receipts for wheat (excluding durum) rose 10.0% to $1.4 billion. A combination of higher marketings and prices contributed to this growth, while Canadian Wheat Board (CWB) payments declined.

In contrast, barley revenues fell 11.6% to $268 million, as marketings declined 21.7% because of lower production in both 2005 and 2006. Higher CWB payments and a 2.8% increase in prices from what was an 11-year low tempered the drop in barley receipts.

Soybean revenues plunged 23.6%, the result of lower prices and marketings. Despite record production in 2004 and 2005, marketings were down 10.3% in the first nine months of 2006. Farm stocks of soybeans as of July 31, 2006 were at a record high, as reported in the release "Stocks of grain" in The Daily of September 12, 2006.

Producers deferred much less revenue from the 2005 harvest into 2006, due to historically low grain and oilseed prices and increased input costs. As a result, liquidation of deferments fell around 40% in the first nine months of 2006.

Potato receipts rose 14.8% to $642 million, as an increase in prices more than offset an 8.8% drop in marketings. Reduced seeded areas in 2005 effectively lowered production and marketings, contributing to higher prices.

Farm cash receipts for the floriculture, sod and nursery industries rose to $1.5 billion, continuing a long-established upward trend.

Hog prices drag livestock revenue down

The stronger Canadian dollar, and disease in Ontario and Quebec, lowered revenues for hogs producers.

Hog receipts plunged 15.3% to $2.6 billion, mainly the result of lower prices for hogs sold in domestic and international markets. The number of hogs marketed slipped 0.3%, as an increase in the number of live animals sold outside the country failed to offset lower domestic sales.

Slaughter hog receipts, which accounted for about 80% of total hog revenue, fell 16.1%, as prices were 15.5% lower than last year and marketings were down 0.8%. Despite a higher number of live hogs marketed internationally, receipts from hog exports fell 11.5% as prices were lower.

On the other hand, the cattle sector continued to show signs of recovery from the BSE situation with receipts rising 6.1% to $4.7 billion. The resumption of live animal trade on July 18, 2005, was a key factor in this increase.

Receipts from the international export of cattle and calves reached $883 million, up from $239 million a year ago, as the number of animals exported more than tripled.

Receipts from slaughter cattle, which accounted for almost two-thirds of total cattle and calf revenues, declined 11.4%. Marketings for domestic slaughter fell 10.7% as exports of live cattle to the United States resumed. The overall slaughter price was almost flat as more lower-valued cows and bulls were slaughtered, bringing down the average.

Movement of feeder cattle from province-to-province tumbled 17.2%, as producers again had an alternative market for feeders in the United States. Despite a 12.7% gain in prices, revenue from feeder cattle was down 6.7%.

Supply-managed commodities accounted for just over 40% of livestock receipts. Revenue from these products fell for only the second time in the last 10 years, largely because of a 5.6% decline in receipts from chicken. Revenues rose for eggs and turkeys but remained flat for dairy products.

Program payments down from record levels

Despite the 9.4% decline from record levels set in 2005, program payments totalled $3.5 billion for the first nine months this year, $549 million above the previous five-year average.

With the phasing-out of the Farm Income Payment program, payments of $79 million made in 2006 were significantly less than the $724 million distributed between January and September 2005. The winding down of several BSE-related programs also contributed to the decline.

Payments under the Canadian Agricultural Income Stabilization (CAIS) program and the CAIS Inventory Transition Initiative (CITI) totalled $1.3 billion, down 1.7% from the amount distributed during the same period in 2005. Crop insurance payments declined 22.6% to $458 million.

On the other hand, the new Grains and Oilseeds Payment Program (GOPP) delivered $730 million in the first nine months of 2006, cushioning the decline in program payments. This program was designed to provide direct assistance to producers of grains, oilseeds and special crops.

Farm cash receipts
	January to September 2005	January to September 2006p	January–September 2005 to January–September 2006	July to September 2005	July to September 2006p	July–September 2005 to July–September 2006
	$ millions		% change	$ millions		% change
Total farm cash receipts	27,130	26,898	-0.9	8,361	8,805	5.3
Total market receipts1	23,224	23,358	0.6	7,746	7,885	1.8
All wheat2	1,691	1,824	7.9	563	674	19.7
Wheat excluding durum2	1,303	1,433	10.0	435	529	21.6
Durum wheat2	388	391	0.8	128	146	14.1
Barley2	303	268	-11.6	80	93	16.3
Deferments	-185	-194	4.9	-81	-105	29.6
Liquidations of deferments	627	382	-39.1	10	7	-30.0
Canola	1,293	1,775	37.3	470	647	37.7
Soybeans	499	381	-23.6	99	109	10.1
Corn	422	428	1.4	131	111	-15.3
Other cereals and oilseeds	296	331	11.8	93	154	65.6
Special crops	549	498	-9.3	255	227	-11.0
Potatoes	559	642	14.8	184	212	15.2
Floriculture and nursery	1,435	1,513	5.4	339	360	6.2
Other crops	2,225	2,239	0.6	962	984	2.3
Total crops	9,712	10,087	3.9	3,105	3,475	11.9
Cattle and calves	4,417	4,686	6.1	1,669	1,533	-8.1
Hogs	3,037	2,571	-15.3	971	894	-7.9
Dairy products	3,603	3,603	0	1,187	1,176	-0.9
Poultry and eggs	1,878	1,822	-3.0	619	611	-1.3
Other livestock	578	588	1.7	193	197	2.1
Total livestock	13,512	13,271	-1.8	4,641	4,410	-5.0
Net Income Stabilization Account	420	309	-26.4	33	9	-72.7
Crop insurance	592	458	-22.6	184	180	-2.2
Income disaster assistance programs	1,374	2,123	54.5	259	576	...
Provincial stabilization	350	508	45.1	108	139	28.7
Other programs	1,171	142	-87.9	31	16	-48.4
Total payments	3,906	3,540	-9.4	615	920	49.6
... not applicable 0 true zero or a value rounded to zero p preliminary 1. Total market receipts is the sum of crop and livestock receipts. 2. Includes Canadian Wheat Board payments. Note: Figures may not add to totals because of rounding.

Provincial farm cash receipts
	January to September 2005	January to September 2006p	January–September 2005 to January–September 2006	July to September 2005	July to September 2006p	July–September 2005 to July–September 2006
	$ millions		% change	$ millions		% change
Canada	27,130	26,898	-0.9	8,361	8,805	5.3
Newfoundland and Labrador	65	68	4.6	23	22	-4.3
Prince Edward Island	268	291	8.6	80	81	1.3
Nova Scotia	344	339	-1.5	112	113	0.9
New Brunswick	314	333	6.1	96	101	5.2
Quebec	4,674	4,698	0.5	1,565	1,537	-1.8
Ontario	6,657	6,376	-4.2	2,102	2,115	0.6
Manitoba	2,759	2,562	-7.1	830	826	-0.5
Saskatchewan	4,447	4,667	4.9	1,211	1,483	22.5
Alberta	5,891	5,859	-0.5	1,785	1,955	9.5
British Columbia	1,712	1,705	-0.4	556	574	3.2
p preliminary Note: Figures may not add to totals because of rounding

Note to readers

Statistics Canada does not forecast farm cash receipts. These data are based on survey and administrative data from a wide variety of sources.

Farm cash receipts measures the gross revenue of farm businesses in current dollars. They include sales of crops and livestock products (except sales between farms in the same province) and program payments. Receipts are recorded when the money is paid to farmers before any expenses are paid.

Deferments represent sales from grains and oilseeds delivered by western producers, for which payments were deferred until the next year. Because these receipts are based on physical deliveries, any deferred payments are deducted from the farm cash receipts of the current calendar year and included when they are liquidated (see "liquidations of deferments" in the farm cash receipts table).

Program payments include payments tied to current agricultural production and paid directly to farmers. Examples of these payments come under the Canadian Agricultural Income Stabilization program (CAIS), the crop insurance and provincial stabilization programs. The program payments series does not attempt to cover all payments made to farmers nor does it represent total government expenditure under all assistance programs. The new Canadian Farm Families Options Program announced in July 2006, for example, which committed $550 million to help lower-income farm families, has not been included in farm cash receipts since it is not tied to agricultural production and not paid to farm businesses. It will be included in the System of National Accounts as a transfer to persons by the federal government.

Realized net income, the difference between a farmer's cash receipts and operating expenses minus depreciation, plus income in kind, declined 14.2% to $1.9 billion. This figure was 16.4% below the previous five-year average (2000 to 2004).

Newfoundland and Labrador and Saskatchewan recorded large gains in realized net income in 2005. In British Columbia and Alberta, realized net income fell more than 50% and 60% respectively, following strong increases in 2004.

Total farm cash revenue from livestock and crop receipts and program payments rose 0.8% in 2005. Higher revenues from cattle and calves more than offset a decline in revenues from crops and hogs. Crop producers saw their receipts fall 6.9%, largely because of depressed prices.

Meanwhile, farm operating expenses rose 1.7% in the wake of higher costs of machinery fuel, fertilizer and livestock purchases.

Realized net income can vary widely from one farm to another because of factors such as commodities produced, prices and weather. It does not take into account the value of on-farm inventory changes. It is a measure of farm business income, not farm household income. For details on farm cash receipts in the first three quarters of 2006, see today's "Farm cash receipts" release in The Daily.

Higher revenues for cattle push up market cash receipts

Market cash receipts, or revenues from the sale of crops and livestock, increased 0.7% to $31.8 billion in 2005. The main contributor was higher revenue for cattle, particularly during the last half of the year.

Cattle producers led the growth as their receipts surged 25.2% to $6.3 billion. This surge was due, in large part, to the resumption on July 18, 2005 of trade in live cattle, under 30 months of age, with the United States. Cattle receipts, however, are still 2.6% below the previous five-year average which included the BSE period.

Receipts from international trade in live cattle and calves went from zero in 2004 to $624 million during the last half of 2005. This represented 3.4% of total livestock revenues and 9.8% of total cattle and calf receipts. The reopening of the border also helped bolster prices for cattle and calves marketed domestically. Average slaughter prices for cattle rose 8.2%, while the average price of feeder animals rose 25.8% from 2004.

Revenues from hogs fell 7.9% from 2004 to $3.9 billion, driven by lower prices and a decrease in marketings for domestic slaughter and international exports. Despite the decline, hog receipts were still 8.3% above the previous five-year average.

Supply-managed commodities accounted for almost 40% of total livestock revenue in 2005. Receipts for chicken and turkey grew, while revenues from eggs declined. Receipts for milk and cream rose 5.3% on the strength of a 6.6% increase in price.

After rebounding in 2004, crop receipts fell 6.9% in 2005. They were 2.6% below the previous five-year average. Abundant world grain supplies, including lower quality domestic grains from the 2004 harvest as well as a strong Canadian dollar, depressed prices, in some cases to near-record lows.

Receipts from wheat (excluding durum) fell 21.4% to $1.9 billion, as prices plunged 22.7% below 2004 levels and 28.2% below the previous five-year average. Farmers received $1.9 billion for canola, down 13.7% from 2004. Deliveries in 2005 rose 14.2%, while prices fell 24.4%.

Program payments rose 1.7% to a record $4.9 billion, representing 13.4% of total gross revenue. It was the third consecutive year in which program payments hit record highs, and the 2005 level was 25.4% above the previous five-year average.

Farmers received large payments through the Canadian Agricultural Income Stabilization program and the Farm Income Payment program. These offset lower withdrawals from the Net Income Stabilization Account and reduced provincial stabilization payments. Federal and provincial programs have responded to difficulties in the cattle, grains and oilseeds sectors with payments to affected producers.

In total, farmers received $36.8 billion from all three sources, livestock and crop receipts and program payments, up 0.8% from the previous mark set in 2004.

Operating expenses: Soaring energy prices have big impact

Farm operating expenses rose 1.7% nationally. Over the last five years, farm operating expenses have shown average annual increases of 2.7%. Soaring energy prices were the biggest factor. Most other expense items also rose, but a large decrease in feed costs dampened the increase.

Expenses increased in all provinces except in Quebec and Manitoba, where they fell marginally primarily due to reduced feed costs. Elsewhere, the increases varied from a low of 1.2% in Nova Scotia to a high of 4.8% in British Columbia.

Almost two-thirds of the increase in gross operating expenses came from record high fuel costs, which were 17.3% above the levels in 2004.

Cattle and calf prices rose following the reopening of the US border to trade in live cattle, resulting in a 24.0% gain in the purchase costs of livestock.

Cash wages continued their long-term increase, reaching $3.9 billion in 2005, up 2.6% annually compared with a 1.3% increase in 2004.

Higher prices also led to a 3.0% increase in fertilizer expenses.

With both mortgage and non-mortgage debt increasing, interest expenses, at $2.4 billion, climbed 4.3%, the first increase since 2000.

In contrast, lower grain and oilseed prices resulted in reduced feed prices. Feed costs fell 11.0% to $4.3 billion, the lowest level since 2000.

Lower farm inventories reduce total net income

Following two years of increases, total net income fell 35.5% to $2.6 billion in 2005. Total net income adjusts realized net income for changes in farmer-owned inventories of crops and livestock.

Despite an increase of on-farm grain and oilseed inventories to well above 10-year averages, lower grain and oilseed prices in 2005 reduced the increase in the value of crop inventories compared to 2004.

Also, a small drop in cattle and calf numbers on farms moderated the overall increase in farmer-owned inventories.

Note to readers

Net cash income measures farm business cash flow (farm cash receipts minus operating expenses) generated from the production of agricultural goods. Net cash income represents the amount of money available for debt repayment, investment or withdrawal by the owner.

Realized net income measures the financial flows, both cash and non-cash, attributable to the farm businesses, similar to an income statement (net cash income minus depreciation plus income in kind). Realized net income represents the net income from transactions in a given year in that it includes the sale of commodities regardless of the year they were produced.

Total net income measures the financial flows and stock changes of farm businesses (net cash income minus depreciation plus income in kind and value of inventory change). Total net income values agriculture economic production during the year that the agricultural goods were produced. It represents the return to owner's equity, unpaid labour, management and risk.

Farm cash receipts measures the gross revenue of farm businesses in current dollars. They include sales of crops and livestock products (except sales between farms in the same province) and program payments. Receipts are recorded when the money is paid to farmers before any expenses are paid.

Farm operating expenses represent business costs incurred by farm businesses for goods and services used in the production of agricultural commodities. Expenses are recorded when the money is disbursed by the farmer.

GENEVA - The World Trade Organization on Tuesday ruled that European countries broke international trade regulations by preventing imports of genetically modified foods.

Argentina, Canada and the United States — which brought the dispute to the WTO — said the decision proved there was no scientific evidence to justify the ban. The three urged the 25-nation European Union to immediately bring into compliance its laws on genetically modified organisms.

In a somewhat surprising development, the EU did not postpone the decision through an appeal. Environmentalists blasted Brussels for bypassing the chance to appeal Tuesday's decision.

U.S. Ambassador to the WTO Peter Allgeier said, "The findings of the panel uphold the principle of science-based policymaking over unjustified, anti-biotech policies." He added that the EU's policies "have perpetuated an unjustified trade barrier that has impeded both U.S. exports and the global use of a technology that promises great benefit to farmers and consumers around the world."

The EU, however, signaled its intention to ignore the WTO's finding that its six-year moratorium on the products beginning in 1998 violated international rules. It said it ended the moratorium in 2004, when it allowed onto the market a modified strain of sweet corn grown mainly in the U.S., and argued that it had come into compliance with the subsequent approval of further biotech crops.

"As a result, most of the findings of the panel have become theoretical," EU trade negotiator Raimund Raith said. "There's no basis for claiming that the [EU] is maintaining the moratorium."

Genetically modified foods are controversial on both sides of the Atlantic. European governments such as Germany and France, as well as a number of environmental groups in the U.S., contend that many such crops are unsafe for humans and the environment.

The WTO's 1,148-page verdict — the longest ever issued by the Geneva-based body, which sets the rules for global commerce — was confidentially handed out in May after a three-year investigation.

It did not rule on whether current EU legislation was illegal and sidestepped the issue of whether biotech foods were safe. But it concluded that the EU had breached its commitments with respect to 21 products, including types of oilseed rape, maize and cotton. It also said individual bans in Austria, France, Germany, Greece, Italy and Luxembourg were illegal.

Raith asked the complainants for "a reasonable period of time" to work with its member states on their national legislation. He said Brussels had decided not to appeal the decision "despite many reservations" regarding the arguments and conclusions of the report because its biotech regime was now functioning properly.

But Washington has said it will continue with its WTO case until it is convinced that all applications for approval are being decided on scientific rather than political grounds.

Copyright 2006 Los Angeles Times

Significant progress in the way the UK produces and uses bioenergy and renewable materials is highlighted in a report, published today by Defra and DTI.

In particular, there has been a fivefold increase in sales of biofuels in UK between 2004 and 2005, with production of biodiesel increasing at a similar rate between 2003 and 2005.

Creating Value from Renewable Materials, reviews progress two years on from launching the original Non-Food Crops Strategy, published jointly by Defra and DTI in November 2004. It also looks at priorities for the next three years and beyond.

David Miliband, Secretary of State for Environment, Food and Rural Affairs, said :

"There are clear signs that the bio renewables industry is expanding in the UK and this is set to continue. In England, we have seen increases in the numbers of farms and areas of land producing non-food crops, with sustainable and competitive growth across supply chains. There has been significant growth in the consumption and production of biofuels and use of biomass to produce heat and power.

The report also highlights considerable progress in bringing to market a range of other renewable products."

"This useful report sets out ideas for refocusing the Strategy over the next three years, with a view to further expanding the renewables sector and optimising the benefits to both the environment and UK competitiveness. We will study the suggestions in detail and respond within three months."

The report highlights that markets are gradually developing for range of innovative renewable materials and products.

Commenting on the opportunities renewable materials and bioenergy offer for developing innovation and global competitiveness, Alistair Darling, Secretary of State of Trade and Industry said:

"Bio renewables have great potential for the economy and the environment. The growth we are seeing - a 75% increase in land being used for non-food crops in the last two years alone - is very encouraging. Increasingly the farming industry is seizing on its potential.

"We have backed it with £66m through the Bio-energy Capital Grants Scheme. We will continue to support it.

"Whether it is biomass-sourced heat, plant-made pharmaceuticals or renewable chemicals the possibilities are developing by the day. We want to be a world leader in these new technologies, with government support, the excellence of our science base and the commitment of the industry we can be."

Copyright Farming UK

By 2025, the U.S. will require 126.99 quadrillion BTUs of energy (quads). About 9.6 quads of energy will be needed for renewable sources to meet the 25X'25 group's goals.

The UT study examined two scenarios. One was to replace 29.42 quads, or 25% of the nation's expected needs, based on a RAND Corporation study, which estimates that 121 quads will be produced via geothermal, solar, photovoltaic, hydro and wind energy in 2025. That, combined with the 1.87 quads now produced from biomass, leaves a deficit of 15.45 quads needed from the agriculture and forestry industries. This scenario is called the "All Energy Scenario."

The RAND report, incidentally, concludes that renewable energy is shown in simulations to lower total energy expenditures in virtually all cases in which current energy price and technology cost trends continue, says Reid Detchon, executive director of the Energy Future Coalition, which requested the study. "Under many scenarios, renewable energy use would cost less in total than continuing with 'business as usual.'"

The second scenario examines the impact of producing 25% of the nation's electric power and motor vehicle fuel, called the EPT scenario. This would require 9.6 quads from agricultural producers. While overall benefits would be less than with the All Energy Scenario, net benefits to agriculture of this plan would be significant.

A wide range of agriculture products, from soybeans to switchgrass; corn to forest residues and stover to food waste, will be needed to fuel the U.S. appetite for energy.

To put 9.6 quads in perspective, it is the equivalent of 86 billion gallons of ethanol, 1.1 billion gallons of biodiesel and 932 billion kilowatts of electricity from renewable sources. That 86 billion gallons of ethanol will require more than 2.5 times more corn than the 12 billion bushels currently produced in the U.S.

"This is a beautiful opportunity that seldom arises in agriculture today," says Daniel DeLa Torre Ugarte, associate professor of agricultural economics at the University of Tennessee and one of the researchers.

Meeting the 25X'25 objectives would require yield increases in feedgrains, strong contributions from the forestry sector, utilization of food processing waste for ethanol and the use of 50 to 100 million acres for dedicated energy crops like switchgrass. The study uses U.S. Dept. of Energy estimates that the technology needed to produce cellulosic ethanol efficiently and economically will be available in 2012.

The cellulosic ethanol industry will create huge demand for dedicated fuel crops like switchgrass, the researchers predict.

"By 2025, we expect these crops will be grown on 100 million acres or more," De La Torre Ugarte says. "Many acres of soybeans in the Southeast U.S. will be switched to fuel crops. That's where the initial boom of energy crops will happen."

The net effect of renewable fuels on agriculture can be huge. The study estimates that using new and existing sources to provide the feedstock to meet the 25X'25 goal will add $180 billion in net farm inco