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Archive for May, 2013

This report analyses the farm performance data contributed through the OECD Network for Farm-level Analysis. It first compares the distribution of four economic performance indicators across nine participating countries or regions for selected farm types (output and input ratio, and net operating income per unit of labour, land and net worth). The comparative analysis shows significant differences in farm economic performances within countries as well as across countries. It implies that promoting the adoption of existing best practice and improving the resource allocation can lead to a significant improvement in the sector’s performance. The factor analysis found that large farm size is a factor of high economic performance for most types of farms across countries, but it also identified other relevant factors of high performance independent of the farm size factor, such as younger age, higher education, and use of financial leverage.

Kimura, S. and C. Le Thi (2013), “Cross Country Analysis of Farm Economic Performance”, OECD Food, Agriculture and Fisheries Papers, No. 60, OECD Publishing.
http://dx.doi.org/10.1787/5k46ds9ljxkj-en
OECD

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The following three Excel based margin calculators are now available as free downloads at http://www.omafra.gov.on.ca/english/busdev/directfarmmkt/index.html   which allow producers to compare and calculate their margins for selling directly to consumers:

  • The Performance Analysis by Marketing Channel spreadsheet allows users to calculate or compare

margins across six distinct market channels:

  • Roadside stand
  • On-farm market
  • Pick your own/U-pick
  • Farmers’ market
  • Community Supported Agriculture
  • Online store/delivery service
  • The On-Farm Processing Recipe Based Costing Tool allows users  to analyze the impact of changes in recipe, ingredient costs or packaging size on product margin for value added products such as baked goods, preserves etc.
  • The Cost of Meat Processing Tool allows users to calculate the cost of meat processing per meat product by summarizing the costs of animal transport, slaughter, further processing into cuts transport cost for meat pickup.

The Business Management Unit of the Agriculture Development Branch has worked with University of Guelph staff to develop this information resource.

This project was funded through Growing Forward, a federal-provincial-territorial initiative.

Contact: Carl Fletcher, Strategic Business Planning Program Lead, carl.fletcher@ontario.ca

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The Direct Farm Marketing Business Resources publication provides the following information resources for farmers who sell or wish to sell directly to consumers:

  • Six case studies of farmers who sell direct to the consumer through a variety of market channels (e.g. On-farm Market, Farmers’ Markets, festivals and events etc.) explore key problems faced by the farmers and their successes and challenges in addressing these issues.
  • Information sheets addressing the importance and uses of business intelligence and market research, business use of social media, product pricing issues and selecting the right marketing channel.
  • Nine Direct Farm Marketing best management practices are summarized from the case studies, interviews with farmers and other research.
  • Example templates of log sheets that can be used to gather key information for business

The Direct Farm Marketing Business Resources publication are available at http://www.omafra.gov.on.ca/english/busdev/directfarmmkt/index.html  as a free downloadable pdf. 

The Business Management Unit of the Agriculture Development Branch has worked with University of Guelph staff to develop this direct farm marketing information resource.

This project was funded through Growing Forward, a federal-provincial-territorial initiative.

Contact: Carl Fletcher, Strategic Business Planning Program Lead, carl.fletcher@ontario.ca

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MarketView – May 30, 2013

Bank of Canada Keeps Overnight Rate at 1%
As anticipated the Bank of Canada kept the overnight rate at 1% where it has been since September 2012. The longest period of time since the 1950’s. The statement indicated that “considerable monetary policy stimulus currently in place will likely remain appropriate for a period of time, after which some modest withdrawal will likely be required.” Justification for keeping rates the same were a continued slack economy, slower Canadian household debt build up, and a muted outlook for inflation. The statement also noted that Canadian exports will continue to struggle due to competitive challenges with the strength of the Canadian dollar and tempered foreign demand, but that exports are expected to recover over time. The next scheduled date for announcing the overnight rate target is July 17, 2013. The next full update of the Bank’s outlook for the economy and inflation, including risks to the projection, will be released at the same time.

The graph below shows the yearly trend of the prime interest rates impacting Canadian consumers and businesses.

Prime Interest Rate

Disclaimer: This commentary is provided for information only and is not intended as advice

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MarketView – May 29, 2013

USDA Crop Progress Report – May 26, 2013
• Corn planting was 86% complete which is up 15% from last week. This compares to 99% last year and 92% complete on 10 year average. The market expectation was near 85%.
• Soybean planting was 44% complete which is up 20% from last week. This compares to 87% last year and 65% complete on 10 year average. The market expectation was near 40%.
• Spring wheat was 79% complete which is up 12% from last week. This compares to 100% last year and 89% complete on 10 year average.
• Winter wheat condition was 31% good/excellent which is the same as last week

Crop Graph:
• To get your local corn spot price, simply add your local basis
• i.e. new crop future $5.51 + local basis of -$0.75 = $4.76/bu or$187.39/tonne

Weekly Average Corn Futures

Livestock
• US released the final rules to modify Mandatory Country of Origin Labelling (COOL) last week on May 23rd. The two major changes from the initial rule are the required labels are to include information about where each of the production steps occurred and it removed allowances for commingling of muscle cuts. The new labeling requirements go into effect on May 23, 2013 but there is a 6 month education and outreach program which means 100% compliance requirements will be delayed for six months. Both Canada and Mexico have stated they believe the amended rules still violate the World Trade Organization agreements and are prepared to take addition actions.
• Smithfield Foods Inc. (SFD) has confirmed that it has agreed to be acquired by Chinese meat producer Shuanghui Group for about $4.8 billion.

Disclaimer: This commentary is provided for information only and is not intended as advice

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Exporting to the United States – A NAFTA Customs Documentation Seminar

Tuesday, June 25, 2013
Ramada Hotel & Conference Centre
805 Brookdale Ave., Cornwall
8:00 AM – 12:30 PM

Registration Fee – $33.90 (includes HST & breakfast)

Who Should Attend?
Management/Sales/Marketing/Logistics Staff of:

  • Companies recently started exporting
  • Exporting companies with new staff
  • Anyone involved in the export process!!

When Canada, the United States and Mexico signed the North American Free Trade Agreement (NAFTA) in 1994, it established one of the largest free trade areas in the world.  By law, NAFTA requires that each country treats the goods and services of the other two partners as if they were domestically produced.  These rules ensure that preferential tariff benefits are only available for goods substantially produced or transformed in North America.

So, is NAFTA old news?  Not according to the level of audit activity taking place in both Canada and the United States.  Do you understand the risk associated with NAFTA certificates?  Do you know the implications that a NAFTA audit can have on your bottom line?  What will be the cost to your business if your goods are stopped at the US border?  The seminar is designed to help you understand your role and responsibility as Importer of Record as well as the risks associated with poorly documented or completed NAFTA Certificates.

The Ontario Ministry of Economic Development, Trade and Employment, the Cornwall and Area Chamber of Commerce, the City of Cornwall’s Economic Development Office and the Stormont, Dundas and Glengarry Community Futures Development Corporation are pleased to host this seminar.  The seminar will cover the following topics:

·        An Overview of NAFTA, Key NAFTA Chapters and NAFTA Terms
·        HS Classification
·        NAFTA Rules of Origin and Preference Criteria
·        NAFTA Provisions
·        NAFTA Certificate of Origin
·        NAFTA Importer / Exporter Obligations
·        Developing a NAFTA Action Plan

Information on government programs and services to assist your business in exporting will also be provided.

Agenda:

8:00 am –  8:45     Registration and Hot Breakfast Buffet
8:45 am – 12:30    Seminar Presentations 
   
Registration is required. To register, please Click Here.  For additional program information, please call Debbie Walker, Ministry of Economic Development, Trade and Employment at 416-325-6658.

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MarketView for May 17

Global markets are trading higher this morning as investors expect healthy US consumer sentiment data to be released later this morning.

The Canadian dollar has been in retreat overnight following comments from the US central bank indicating that their monetary easing program could cease as early as this summer. Our dollar is currently trading at $.97

Crops:
Corn has some downward price momentum this morning as it is likely that this week will mark a US corn planting record, according to Agrimoney.com Soybeans are trading higher in the early session as yesterday’s USDA export showed that China purchased 79% of the US soybeans sold last week, confirming an increase in demand, and a growing belief that the push in corn plantings will have a negative impact on soybean production, according to a commodities analyst quoted in Bloomberg Financial.

Disclaimer: This commentary is provided for information only and is not intended as advice.

Jennifer Stevenson
Manager (A) Sustainable Livestock Production Unit
Ontario Ministry of Agriculture and Food
Ontario Ministry of Rural Affairs

Email: Jennifer.stevenson@ontario.ca

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