Barrick Gold (ABX) was a recent example. The company wrote off $3.8 billion to deal with the drop in market value of the copper mine it bought for close to $8 billion some time ago. ABX has a billion shares, so the write off was close to $4 per share. 


Kinross (K) was another example of a company that had to take big write down after a mine it bought had to be re-priced. It had over $6 billion of goodwill on its balance sheet and has written down about $4 billon so far.


Cliffs Natural Resources (CLF) likewise recently wrote down over a billion of impairment charges related mostly to the mining company Consolidated Mining that CLF bought some years ago. 


These are not cash costs in the proper sense of the word. But the cost has to come out of recent profits. Banks often set aside money for bad loans during times of stress. However banks also often bring back some of that money as income after they collect on those bad loans. Mining companies likely are not so lucky.


Natural gas writedowns


We might see the same sort of write downs in the natural gas business so we need to be careful with natural gas companies that paid high prices for land that is supposed to have a lot of natural gas. 


This might not have happened recently; natural gas has been cheap long enough to hold down prices for new purchases. But there could be some stinky fish somewhere on the books for some companies. As, or if, they discover that the land is producing much less gas or oil than they estimated, or if the wells depreciate too quickly, or they run into some dry holes, and if the price of natural gas stays down too long, we could see impairment charges on some natural gas and oil companies. 


I think streamer stocks like Silver Wheaton Corp. (SLW), Franco-Nevada Corp. (FNV) and Sandstorm Gold Ltd. (SSL) are much safer resource-related stocks to own. I own SLW and FNV and sold SSL some time ago. Other companies that should not have write downs likely include pipelines, drillers and service providers.


What brought on these losses or writedowns? Over the past few years, the big cry in the boardrooms and among investors was growth. I have never been too close to the corporate world so I can only guess about some of the chats management had. Why can’t management be happy with a good year? But no, the idea seems to be that we take last year’s success and look for ways to grow. “Just take last year’s good number and add three or five per cent and we’ll be happy” seems to be the way things go in the corporate world.


Where there are takeovers, there are buyers and sellers. Some buyers are overoptimistic or have poor judgment when it comes to the value of an asset. 


Whatever the reason, it looks like some resource stocks face or have faced big writedowns 


Another significant recent turn of events has, in my opinion, helped to drop the value of our resource stocks. A number of companies have now said that they will be less aggressive on growth and more likely to reward shareholders. 


The goal of growing a business can do funny things to executives. Some get excited and pay dearly for their next purchase (I suppose it’s like some farmers paying dearly for the next quarter section of farmland.) 


However, these past few years, as commodity prices dropped and demand slowed, suddenly companies discover that they cannot grow their businesses as planned. So they announce that growth will slow down.


We haven’t heard much news on the after effects of that slowdown in growth but I suspect some investors have run the numbers. If a company expects lower growth, its shares should be worth less. How much less? I compare it to an elevator going down a floor or two. So might our stocks.


For First Majestic Silver Corp. (FR), I paid $18 for some share and have collected $5 per share selling calls at an $18 strike price. Now the right strike price might be $15 or $16 or $17. Of course if the price of silver jumps up, optimism might return. 


Seasonality


Some investors think seasonality doesn’t affect the price of stocks. I think there is lots of evidence to say it does. Not 100 per cent of the time but often enough to encourage me to think about when a stock is in season. 


Take gold (and silver usually follows gold). In India, farmers grow crops with the monsoon season. If the season is friendly, crops will be good. In India, farmers don’t pay income tax on money they make from farming. Storing crops is trickier than here in Canada so most of the crop is sold after harvest.


Indian farmers pay their bills, set some money aside for future expenses and then usually buy gold and or silver with the rest of their money. That is one demand that matches the seasons.


Weddings in India often happen in the fall. Jewelers need gold and silver two or three months before wedding season to make jewelry for weddings. Silver and gold prices often drop going into summer so why would a jeweler buy the precious metal before July?


That’s another seasonal effect.


After wedding season comes Christmas, Chinese New Year and Valentine’s Day. All of these cause people to buy gold and or silver in various forms. Seasonality. 


The peaks and rollovers don’t usually come on the same day every year. In 2010 gold rolled over around April 15. In 2011 it was around April 1. In 2012 the price of gold fell $80 per ounce on Leap Day, February 29. It was called the Leap Day Massacre.


In 2013 the price of gold looks to have touched bottom in the first week of March. Time will tell. There might be a price rally for a short time until out of season kicks in. However, the price of our gold and silver stocks might have trouble going up if the market suspects the rally will be short and if growth is going to slow down.


Besides, these days there are other good stocks to own. 


Learn two charts


I’ve been studying charts for years. In my opinion, we only need two: the one with the price performance, the $SPX and the 10- or 20-day moving average chart. The $SPX gives us a ratio which we can use to help us buy right, and the 10-day moving average could help us sell near tops. 


Here’s how to view these charts on the Internet. Go to www.stockcharts.com and click on “Free Charts.” Type in the name of the stock in the “symbol” box in the middle of the page (for example, Disney, “DIS”) and a chart will show up with DIS in the symbol box on the top left of the chart. 


Deep below the body of the chart find the word “Indicators.” Click on the menu arrow on any of the three boxes listed below “Indicators,” find the words “price performance” on the drop-down menu and click on that. 


The symbol $SPX should pop into the “Parameters” box. Put your cursor in that text box, to the left of $SPX and enter the symbol for Disney. You should have dis:$SPX in that box. Then click to get a chart. Be sure to put the colon (:) after the symbol DIS.


Now click update (near the top of the page). On the main body of the chart you should see what is called a candlestick chart. White means the price went up that day. Black means down. These days the candlestick chart has been heading up. Now look below to find the price performance chart which shows a ratio of the price of DIS and the S&P index.


As I’m writing, the ratio chart for DIS is heading up. That shows the price of Disney is going up faster than the S&P index. This is not foolproof. If the $SPX was falling and the stock price was falling slower then the chart would still be up, so do look at what the market is doing. 


Not too many stocks have a rising chart these days. Most of the resource stocks I own have falling charts. So yes I proved once again that selling when the daily price crossed the 10-day moving average would have been a good thing to do. (I have written about this before.) 


On that chart if you want to see how the price of a gold stock is doing compared to the price of gold, instead of $SPX type in $gold and then type in the symbol of the stock to the left of the $gold. For example, Barrick Gold would be ABX.to:$gold. If you have problems call or email me. 


As I’m writing on March 5, the Dow Jones Index hit a new high at 14,257. The old high was around $14,100 in October 2007. 


The main question is “Are we nearing the end of the old bull market or are we starting a new bull market?” I don’t know. But it looks like the market wants to be bullish at least until the sell in May and go away kicks in this spring. 


A reader sent me this statistic: In October, 2007 the 30 stocks on the Dow were priced at 4.6 times book value. These days the 30 stocks are priced at 2.75 times book value. That is 60 per cent of the old book value. I think it suggests the market has room to go up. In steps, and with setbacks, yes, but more up than down. I guess we’ll see.


I don’t often buy in to predictions like this. To me all that really matters is “What are my stocks doing?” If the price is going up and the price has not crossed the 10-day moving average going down, then I think it’s quite safe to keep owning the stock. If that price performance ratio is still heading up, then it should be another sign to think about. Keep in mind that indicator is not foolproof — the chart would be going up if the stock was dropping less than the $SPX index. 


I also look at three other indicators: the MACD, full Stochastic and the RSI index, all of which you can find on Stockcharts. If you have questions or comments send me an email at sirski@mts.net or call me at 1- 204-453-4489. † 


Prevention is paramount to minimize the number of cases or decrease their severity.


Three main causes


Three very important contributing causes are:


1. weak calves from prolonged calving or poor nutrition of the dam.


2. poor hygiene (dirty calving areas and overhandling the navel when weighing).


3. inadequate colostral intake (need at least 1-1/2 to two litres in first eight hours).


When evaluating your own operation carefully look at these three causes. Calving with contractions evident should result in a calf born in no longer than 1-1/2 to two hours. If not make sure she is assisted. REMEMBER, a slow gentle pull in time with the cow’s contractions is far better than rapidly pulling, and it is also much less damaging. Make sure mineral status especially selenium, vitamins E and A is adequate for a pregnant cow in order that calves get up quick and suckle. Proper bull selection especially for heifers minimizes birth weight resulting in livelier offspring.


Start calving on a fresh area with bedding, which has not been used since last year. Straw is still ideal. I have encountered more problems with wood chips causing trauma to the navel area and the chips harbour more bacteria. Evaluate the source of bedding material saving the very best for the calving season — the newborns deserve it.


Your maternity area, calf puller, chains, and sling ideally should all be disinfected regularly.


I see far too many badly contaminated pullers, especially the breech area and producers using no gloves on obstetrical cases. This all serves as a source of contamination to the calf. For producers, especially purebred operators who often weigh their calves shortly after birth, be especially diligent on cleaning the sling. This area has much contact with the navel area. I’ve even had operators cut out a large circular area in the sling to prevent this contact. 


Another idea is to weigh at 24 hours of age when the umbilicus has started to dry up somewhat. Some larger producers even use walk-on scales to avoid contact totally.


TO DIP OR NOT TO DIP


With disinfection arises the controversial topic of navel dipping. Most veterinary practices don’t encourage it for several reasons.


1. Navels are often over handled by unclean hands resulting in further contamination.


2. The disinfectants can be over harsh such as creolin or high concentrations of iodine, which greatly inflame the area.


3. The disinfectant itself may become contaminated when applicators such as teat dip containers are used.


4. Often calves are not treated till one day of age when any contamination would have already occurred making treatment a futile effort.


Most veterinarians would NOT recommend any navel treatment at birth, in fact as stated, it may even be harmful. Producers who might be inclined to treat the navel, and have a low incidence of infection, are probably looking after calf health, colostral intake and hygiene and most likely could stop the process with no detrimental consequences.


BEWARE OF DIFFICULT BIRTHS


There is definitely an increased incidence of navel infection found in both backwards and caesarian derived calves. This occurs because the umbilicus rips off abnormally short with these deliveries exposing the area. Some veterinarians are now purposely ripping the navel shroud long on C-section deliveries to try and minimize the possibility of navel infection developing.


If infection is anticipated, prophylactic, long-acting antibiotics may be prescribed. We also experience a higher incidence where calves are more likely to be cycled through a warm (above freezing) barn in early spring. The warm temperatures allow bacterial multiplication. These herd managers again may be advised to give prophylactic antibiotics during this period. Bull calves appear more susceptible as well since the prepuce is in close proximity keeping the area moist with urine.


Even with all these precautions the odd navel infection may still result. Pulling off the old cord if still present to allow drainage cleansing and long-term antibiotics may prove successful. Surgery can be done in severe cases to remove the infected stalk. Purebred breeders need to be cautious of any yearling bulls with a past history of navel problems as these may seed out into the internal secondary sex glands rendering them infertile.


Hopefully these suggestions will help you avoid any navel problems in this springs calf crop. †


For the last seven or eight years, researchers with the University of Saskatchewan and Agriculture and Agri-Food Canada have been using rotary hoes to control broadleaf weeds. Eric Johnson, a weed biologist based at the Scott Research Farm, has been testing the implement on pea and lentil crops. He’s found that pulse crops can tolerate multiple passes with the rotary hoe at any crop stage. Rotary hoes have also been used successfully in cereal crops.


Dalhousie University recommends using the rotary hoe before the crop emerges and at a later date. Farmers shouldn’t use a rotary hoe in cereals between crop emergence and at least the two-leaf stage. The rotary hoe works well in corn up to the four-leaf stage. When farmers are making a second pass, Dalhousie University suggests travelling in the opposite direction of the first pass.


Steve Shirtliffe, a University of Saskatchewan professor, says that a second pass with the rotary hoe is often needed to control broadleaves. 


“The key thing with rotary hoeing is timing. You have to be out there when the weeds are just emerging. This may only be a couple of days,” Shirtliffe says. 


The rotary hoe works best on weeds that are still in the white thread stage, as the roots aren’t able to anchor the weeds against the tines. Iowa State University suggests digging through trash to scout for newly emerged weeds. If the weeds are beyond the cotyledon stage, they are likely too far along for the rotary hoe to work well.


Because the weeding window is so small, a rotary hoe needs to cover many acres quickly. The rotary hoe is designed for speed, between eight to 25 kilometres per hour. Going fast doesn’t hurt weed control — in fact, going too slow renders it less effective. Field scale models of up to 60 feet are available.


Shirtliffe says the rotary hoe also works best when soil conditions are dry, but not too hard. Hot and dry post-treatment conditions are also best.


Farmers who practice no-till may be concerned about residue plugging the tines. But min till rotary hoes have two separate tines that prevent plugging. Crop residue remains on the soil surface after multiple passes.


Shirtliffe has created a video demonstrating the rotary hoe. To see one in action, visit youtube.com and search “rotary hoe weed control.” †


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This disease was first described in Britain in 1930, associated with magnesium deficiency and calcium deficiency (“milk fever”) and excess potassium in the blood of affected animals. During cool, wet conditions or regrowth after frost or drought damage, sodium levels in certain forage plants plummet, while nitrogen and potassium levels spike. The dead cattle have high levels of potassium in their eye fluid.


Recommended prevention has been supplemental dietary magnesium. Standard treatment has been to give affected cows oral and/or intravenous magnesium.


After examining cattle lost in 2001 following spring frosts in the Midwestern U.S., and analyzing the pastures, Dr. Thomas Swerckzek (a veterinary pathologist in Kentucky) found clues about the cause and prevention of grass tetany.


“Each spring, farmers were advised to get magnesium into their cattle when pastures were growing fastest,” he says. “Producers tried this, but it didn’t work.”


Then nutritionists said farmers should start four to five weeks before peak pasture growth. “That didn’t work either,” says Swerckzek. “By the 1980’s they advised year-round supplement, to get it into the animals’ bones.” Theoretically, cattle could pull it out of bone storage when blood levels dropped due to sudden pasture changes.


Post-mortem mystery


As a pathologist, Swerczek did diagnostic necropsies on livestock until the early 1970s. Then for 15 years he worked as an equine diagnostic research pathologist. In 1986 he continued his necropsy research on all classes of livestock. When he resumed doing necropsies on cattle, he was shocked to see how much worse the grass tetany situation had become. 


“The dead cattle were arriving in a wasted condition I’d never seen before,” he says. “When I’d stopped doing cattle necropsies in 1971, the dead cattle were in good shape, so I noticed how much they’d deteriorated.” After coming back to cattle necropsies in 1986 he hated to be on necropsy duty after a cold spell because so many dead cattle were coming into the lab.


“By 1995 I started seeing adult cattle with salmonellosis, coccidiosis and other calfhood diseases, which didn’t make sense. Perhaps the cows were eating something the calves were not,” he says. He began looking at diets and mineral mixes, because that’s what had changed over the years.


He collaborated with a bovine veterinarian, Dr. William McCaw, who was working with several purebred herds trying to find answers. McCaw thought there was something related to diet that was causing wasting and opportunistic diseases. Although reluctant, they found a few producers who agreed to stop feeding minerals to help them in their research.


When Swerczek started looking at herds throughout the state, he found a farm with very healthy Hereford crossbreds. The owner was feeding loose salt rather than mineral mixes. Most farmers in that area fed mineral mixes and salt/mineral blocks instead of loose salt. Cattle often overate mineral mixes, to get the little bit of salt that was in them.


The farmer with the crossbred cattle had a salt house in every pasture. “He wasn’t feeding any magnesium. He’d been in the cattle business more than 40 years and hadn’t had a case of grass tetany,” says Swerczek.


Not a magnesium issue


“This was a hint that maybe it wasn’t necessary to feed magnesium to prevent grass tetany. Later, when I got several herds off the mineral mix, they quickly started to turn around. Most of the cows had been suffering from diarrhea, wasting away, and within 24-48 hours they improved, after giving them plain loose salt instead of mineral.”


He was working with a herd of about 1,000 Angus and driving through that farm with the manager. “We came across a cow that had been down for several days in spite of multiple treatments with magnesium and calcium.”


Swerczek had some sea salt, and put it in front of that cow. After ingesting a couple handfuls of salt the animal got up and was able to rejoin the herd.


There were other cattle in the herd showing signs of grass tetany and going down. “I told the manager to put a handful of salt in front of them. Those cows came out of it. I asked if he’d be willing to take away all the minerals and just feed salt. He was afraid to do that, but agreed to put a small group in a different pasture and try it. The next cold spell, cows in the pasture where he had the salt were not affected.”


“We had massive losses in Kentucky one year, due to an unusual winter with many warm spells. Grass and clover grew early. Then we had a hard freeze in April. Cattle went down by the thousands with grass tetany and bloat. People were using bloat blocks but this didn’t help. Cattle were actually dying while eating those, because they didn’t have salt,” he says.


“We’d been taught for many years (and people still believe) that nitrate is not toxic — that nitrite is the problem. In the 1940’s when nitrate was discovered as the cause of corn stalk toxicity, it was nitrites causing shortage of oxygen in the blood. But I found that nitrate is 100 times more important in grass tetany syndrome than nitrite,” Swerczek says.


Body looks for salt


The body must get rid of the nitrate and it does this through the cations, especially sodium. “When there isn’t adequate salt in the blood, the body grabs onto the most available cation, which would be magnesium and then calcium,” Swerczek says. When the spike of nitrate occurs — when the cow consumes frost-damaged forage the body immediately uses magnesium in the blood to get rid of the nitrate, which depletes the body, and this is why the cow goes down.


“If there’s enough salt available the body can grab onto the sodium and cows don’t go down with grass tetany or milk fever. If you don’t have salt out on the day this hits, they go down. It has to be there all the time and it can’t be hard salt blocks because cattle can’t eat enough when they suddenly need it.”


The body usually has the ability to keep sodium levels within normal range, but when it drops lower, you only have a few hours before that animal dies. “If you feed salt, however, and the animals eat it, they’ll be fine—as long as they have plenty of water,” says Swerczek. “British scientists in the 1930’s noticed that salt could prevent grass tetany, but no one put it all together. Grass tetany should be called nitrate toxicity/salt deficiency leading to hypomagnesia/hypocalcemia.” †


Last Saturday Rick and Sam came down on the four-wheeler to help me feed the cows. Sam enjoyed riding around in the feed truck. Lynn was doing better that morning, so the heart doctor in Missoula released him from the hospital mid-day, and Andrea drove him home. He was very tired and went to bed early.


He had a little chest pain in the night but it eased off, and he slept almost all day Sunday. Andrea used the tractor to load another big bale onto our feed truck, and brought a couple of big bales around for the heifers.


Monday there was no school, so Charlie came down with Andrea and drove the feed truck for his first time. The snow was still deep and crusted (very cold that morning). Charlie had to go a little faster than he should have, to not get stuck. Andrea and I were feeding the big bale off the back, so we had to hang onto when the truck lurched through the snow.


It reminded me of when our kids were small and used to drive the jeep for Lynn to feed; he had to be very agile and balance himself over the bumps and lurches, and try to land on his feet when the kid popped the clutch and threw him off. We were a lot more agile back in those days! Our current feed truck (a 1973 Chevrolet) is an automatic, which makes it a little easier for a young driver. Charlie actually did very well driving it, considering the challenging conditions.


Wednesday we let Lynn drive the feed truck. He was starting to get restless and frustrated not being able to help with chores and feeding. But he’s not supposed to lift anything heavy or do strenuous things for awhile yet.


Thursday Andrea took Lynn to town to have a checkup with his doctor here. When they got home, Andrea took a big bale up to Carolyn’s place on our feed truck for their old horses, and Carolyn unloaded it with their tractor.


Then we noticed that our neighbour had put all his cattle in the little field right below our place. Andrea and I quickly moved our heifers because he still has bulls with his cows. We didn’t want bulls right through the fence from our heifers. Andrea and I called the heifers; they followed us up out of the field and we put them into the orchard and horse pasture.


That afternoon Lynn and I drove around to visit our new Amish neighbours and get better acquainted, and take them two sets of my dad’s books. They had found one of his old books in the local library and wanted to buy some — one set for themselves and one set for a relative. Dad’s little books of short sermons (he called them “meditations from the high country”) have been popular ever since they were first published many years ago. He used simple stories from the ranch and from his many other experiences to illustrate God’s love. A few years before my father died, I helped him get those books reprinted (By the River of No Return, Wild Rivers and Mountain Trails, Sagebrush Seed, and The Open Gate), and I still have some available for people who want them.


Carolyn was sick a few days with a nasty infection she picked up at the vet clinic where she works, after helping treat several young calves brought in with serious diarrhea. In spite of intensive care, the vet couldn’t save those calves. The young man who works there cleaning kennels also got sick, and had to be in the hospital for IV fluids. Yesterday Carolyn needed to go to town to pick up Michael’s prescription medications to send to him, but still didn’t feel well. So Andrea got the medications for her and packaged them up to send with one of the other truck drivers who is heading back to North Dakota today.


MARCH 3


Our neighbour finally moved his cattle (and bulls) out of the little field next to ours, so it was safe to put our heifers back. Andrea and Rick are still feeding our cows, and Lynn drives the truck. Last weekend Emily drove the truck, then helped with the fillies. She held Dottie while I trimmed her feet, then Andrea and Em led Willow and Dottie for a short walk to the end of the driveway and back. We need to start leading them again, now that the road is not so icy — and get back to their lessons.


Last Monday Lynn drove the tractor to load big bales, for the first time since his heart procedure. He also brought another big bale around for the bulls in the corral. He’s also been driving the four-wheeler around to check on things, especially where the snow is too deep for hiking.


Carolyn is doing much better. She talked to Michael a few days ago and told us he’d had some wild experiences with the bad roads in North Dakota. One shortcut the dispatcher told him to take was just a jeep track, and very slippery, steep, and narrow, but he managed to get safely down that hill.


Andrea took Emily to the doctor on Friday and discovered that Em is borderline diabetic. She needs to start watching her diet and get some regular exercise besides hockey (which is only a winter sport here).


That afternoon Em and a friend, Andrea, and I took the fillies for a long walk down the road and back, more than a mile. Yesterday we all went for a hike again. Willow and Dottie are feeling silly and frisky and need to get back into regular lessons and good manners again.


I was watching Breezy most of the day. She was dull, lying around. When I fed her in the evening she wasn’t interested in eating. She just took a few bites of hay, and lay down again. By dark she still hadn’t touched her hay. Andrea and I gave her an injection of Banamine and put her in the pen next to the house where I could watch her during the night — under the light on my hay shed. It shines into the calving pens by the house.


Breezy was feeling better within 20 minutes after the injection, and began eating hay. I checked on her several times in the night (looking out the window) and she was fine. This morning I put her back in her pen; she had no more episodes of discomfort. 


MARCH 12


Last week Michael and other truckers in North Dakota were stranded at their truck yard in a blizzard, with four-foot snowdrifts. The man trying to plow them out made one pass but the blowing snow immediately filled that slot. So Michael stayed in his truck all night with the motor running; it was too cold to shut it off or it would never start again. He hoped he wouldn’t run out of diesel before they got plowed out. The wind quit the next day, so they were able to get the trucks free.


Andrea and I took the fillies for longer daily hikes last week. We went down the road a couple miles and back, then up the road 1-1/2 miles and back. We thought the mud had dried up in the jeep track to the low range, so one day we tried to lead them up that “road” but didn’t get very far. It was wetter and deeper than we thought, with gooey mud sticking to our boots, so we didn’t go very far.


Saturday Andrea and I took the fillies on another long walk up the road, then trimmed Rubbie’s and Veggie’s long feet when we got home. Those old horses’ feet hadn’t been trimmed since last fall. I trimmed off the extra hoof growth with hoof nippers and Andrea smoothed them with the rasp.


Our weather warmed up yesterday — the first time it hasn’t been freezing at night. The snow is settling, and if it stays warm we’ll have flooding. Lynn checked the ditch above our calving pasture and maternity pen to make sure the little headgates he put in last year were shut off. We don’t want those pens and pasture flooding just before we put the cows in there for calving! Our little herd is due to start calving in early April, but the bull we’ve been using sires calves with short gestation. His calves last year came a week to 10 days early, on average, so we’ll probably be sorting out the heavies to bring down here fairly soon. †


She had a very interesting series of slides with global beef cattle numbers, trends and markets. As Canadians we pride ourselves on our beef, but we are pretty small potatoes when you look at cattle numbers in places like the U.S., Brazil and even China. Another interesting point she made was that Canada is nearing a neutral or negative balance of trade in beef. This may not be particularly surprising given the fallout from the last decade and the fact that all of us are 10 years older than we were a decade ago. It is surprising given the fact that with a relatively small cattle population, we used to be an export powerhouse.


It is easy to focus inward and convince ourselves we are the centre of the universe, but at some point we need to look outward and make some decisions in the industry as to the direction we are going to take. This discussion occurs at the national level in groups such as the Canadian Cattlemen’s Association (CCA) and the federal government, and even provincially with commodity groups and provincial governments, but the reality is the industry is made up of the individuals on the ground with the cows, and any real direction is going to come from that level.


Canada is a big country and there are different production methods and markets across this country, and the same is true of potential customers.


Changing patterns


Certainly signals are coming from the processing end, as a large percentage (well over half) of the cattle processed in this country are sold off the cash market, through grids or other prearranged contracts. These contracts often contain direct incentives to produce to a specific target. The percentage of calves being sold directly off the farm has been growing as well. 


While this does create new challenges for value discovery, it also provides some real incentive and traceback to these cattle. Add BIXS (Beef InfoXchange Service) and other similar programs to the mix and it is probable that at some point the number of calves sold direct off farm will outweigh those that are sold through auction.


I would argue this desire to purchase off farm is driven by packer contracts (which in turn are driven by retail contracts). In an effort to optimize cattle meeting the contract targets, improved health status is a good start for a lot of feeders. Additionally, knowing the source of the cattle allows feeders and their suppliers to get back to the level of genetics.


In my opinion this is where we have to make some serious decisions as an industry and where one of the real opportunities lies. The interesting thing about genetics to me is the answer to what is “right” is really and truly “it depends,” and the opportunity may lay not so much in changing genetics, but identifying and streaming them into the correct marketplace.


The definition of insanity


Currently the business model for many packers is to process enough animals that the law of averages will allow them to fill their contracts. There are preferred markets for lean meat, well-marbled meats, and other specific cuts/types of product and packers sign contracts to reduce their risk and try to lock in profits. 


The current business model in essence relies on putting through enough animals in a day so high-priority orders can be filled with high-quality product. Occasionally a retailer may get lucky and get higher-spec product at a discounted price if the kill happens to be heavy in high-quality product. Conversely, a packer may get unlucky and not have enough of a specific product to fill orders. The best example of this may be lean beef/trim imported from Southern Hemisphere countries if there is not enough lean product to fill orders for lean grind.


It is relatively straightforward to say this model is somewhat absurd. Cattle feeders feed undifferentiated cattle for long periods in order to hit marbling targets and produce many carcasses with excess fat at a tremendous cost. It creates cattle with genetics for lean meat production being fed in systems where they cannot hope to ever achieve grade targets. It creates markets where lean cattle are imported in order to fill orders which in many cases could be filled by Canadian cattle if a bit more was known about their specifics.


Producing for the market


This is where a lot of the opportunity lies in the Canadian industry. Excellence in the case of an industry is created one farmer and rancher and one cow at a time. It does not necessarily mean that there is a perfect cow or breed combination. Rather it means that each level of production is knowledgeable about and accountable for what it is producing. There is real opportunity for cattle across many demographics and descriptions at various times and seasons, and every market is a niche market. 


While potentially able to open market doors, this approach is very difficult for representative groups such as Canada Beef to tackle. We know that there is more total value to be obtained if we can proactively source and secure individual markets that require a specific product and this means that individual operations and co-operative brands must take responsibility from large scale approaches. We see this happening with some relatively new players on the scene even now.


This differentiated approach means that organic is not at odds with conventional, grass fed is not at odds with grain fed, and highly marbled is not at odds with lean. It means that we know going in what the customer wants and can consistently provide it, in whatever form they want it. It also means we can objectively assess market opportunities and determine whether they are worth pursuing or whether we can provide what they want at a level that is profitable.


Our export industry of a decade ago was largely constructed on a price advantage due to a low Canadian dollar and a feed advantage due to the loss of a shipping subsidy. As the industry has contracted we are once again faced with a unique opportunity to determine our own fate and whether we want to pursue it. Canadian beef is available in a vast colour palette, but knowing what the colours are is pretty helpful when painting a beef marketing masterpiece; and that is excellent. †


GREEN THUMBERS ARE GEARED UP 


… and ready to get growing outdoors along with dreams and hopes yet to be realized. Aren’t we an optimistic bunch? By the time you read this I expect footprints left on the snow in my garden to be pretty well long gone. Most years by early April I’ve already seeded some leaf lettuce and other greens close to the house. But then the man and woman in the moon reminded me to not rush it, so I’m waiting until the arrival of best planting days this month for anything that produces its yield above ground. They are: April 11, 12, 13, 16, 17, 18, 23, 24, 25 and 26, 2013.


WHERE DO CUT 
ROSES COME FROM?


Here in our Canadian provinces and territories of North America, almost all roses are imported, mostly from Colombia and Venezuela. A combination of gentle temperatures, fertile soil, and long equatorial days plus low labour costs allows these South American countries to grow roses during the entire year without expensive greenhouses. Once harvested, foreign-grown cut roses may travel as much as 5,000 kilometres to reach local florists.


Our Canadian rose-growing season is short at best, especially on the Prairies. Let’s relish every day that we can cut a homegrown single rose stem or a bouquet of roses from our own garden. Want to have a good experience with growing roses? I, Ted, am encouraging Grainews rosarians to head for the nearest nursery or garden centre wherever they live across Canada and buy one or more of the newly introduced tricoloured Campfire rose. 


Maybe you spend more time actually camping somewhere rather than growing roses, or have never planted a rose bush before. Let me give you the goods on Campfire. This terrific performer is bound to be a bestseller, so don’t let it slip through your fingers. Campfire has great capacity for additional blooming after the first flush. Also keep in mind that quick repeat flowering is enhanced by deadheading spent blooms. Although Campfire’s fragrance is faint, it makes up for it in so many other ways. Extreme hardiness is one example. Rose fanciers will also appreciate knowing that not a speck of black spot was detected on its leaves during test trials. 


I’M TIPPING MY CAP


… to Campfire and three other cultivars previously introduced in the Canadian Artists series that also include Emily Carr, Felix Leclerc and Bill Reid roses. All four grow and survive on their own roots in Zone 3 Prairie hardiness. When Canadian-grown roses are in season it’s important to buy from local growers. In August 2012 a select group of nursery people from across the nation was invited to a three-acre rose research plot on the southern outskirts of Portage la Prairie, Manitoba to view and evaluate extensive rose-breeding trials. Besides the introduction of Campfire this spring, watch for another release in the Canadian Artists series possibly next year or by 2015. I was given a hint that it may be a yet-unnamed, outstanding, long-stemmed, deep-pink hybrid tea-type rose having full petal count and a very strong fragrance. Spectators who toured the research plot are very excited about this rose and anxiously await its release. Said rose still requires more field testing, particularly as to hardiness. The artist picked to represent this fifth and last rose in the Canadian Artists series is Lucy Maud Montgomery of Anne of Green Gables fame. Watch for it and other new top performers from the world of roses to follow in future.


ARE YOU A WATER DIVINER? 


I asked that question earlier this year. A handwritten letter arrived in the mail from a reader who told about her experience with water witching and I thank her for sharing. 


Dear Ted: Re: water witcher January 7, 2013 Grainews. This is my response. In late summer 2005, I noticed my well was starting to cave in so got a fellow from Killarney, Manitoba to find a vein. I don’t know what kind of wire he used, but it held its shape. It was about 27 inches long with about five inches bent as a handle to hold on to. There seemed to be a ball bearing at the long end, held in place with a twist. He left me the wire he was using and said I could keep it. I don’t know if I’ve got the knack or not and can witch water. Went to where he had witched. It (the wire) was just going up and down. I could hardly hold it. My neighbour came down and tried it and it did not work for him. The wire just stood there. It didn’t do a thing for him. I’m just wondering if I have that magic touch. I got the well drilled; driller had to go down 130 feet. Really very good, clear water. At that time I lived southeast of Minto, Man. I hope you can make head or tail from this. I had my 87th birthday in late February. Keep up the garden tips. Best page in the whole paper. Also, do you sell CDs of your music? You seem to be jack of all trades. Jean Vandenberghe, Boissevain, Man.


Ted’s reply: I had the good fortune to later speak with Jean via telephone. As she pointed out, the witcher from Killarney gave his witching tool to her and she still has it. Jean did some experimenting and explained how she held the short end of the single piece of stiff wire quite loosely with her two hands around it. “That thing with the ball bearing twisted on the tip was just going up and down into the air and toward the ground like a house on fire. You wouldn’t believe how it was going. It started to rock or whatever you want to call it. We had the well put in there by the Steve Racine family and had a good supply of water. We plumbed it to the house; a really good stream of clear water.”


According to Jean who is now retired, there’s more to it than meets the eye to get the entire process of drilling a well completed. It took the drillers a good week from start to finish. As for the witching tool itself, Jean described it as a good, heavy piece of wire that holds its shape and doesn’t bend like a coat hanger. She doesn’t think it was a welding rod, but more likely to be something similar to firm page wire. She’s not certain whether she can witch water or what, but her own experience appears to confirm that she certainly can. “Maybe I’m kind of full of electricity,” she told me. The long and the short of it is that every witcher’s tool is as unique as the individual himself/herself who tries a hand at it.


As for Jean’s inquiry about my music. I have CDs at $15 each and audio cassettes for $12 each; shipping included. Among song titles are: Legend of the White Horse (the white horse statue on the western outskirts of Winnipeg), Schmirler the Curler (late of Biggar, Sask.), Gardeners Love to Party, Blue Lobelia Blue, Lily Sweet Lily, Green Beans and Ripe Tomatoes and others. Mail cheque or money order to: Ted Meseyton, The Singing Gardener, 54-14th Street, Portage la Prairie, Man. R1N 2V3.


MY GRANNY’S SCRAPBOOK


… contains everything from gems of wisdom to home remedies. She always grew parsley and not just to decorate the dinner plate. Granny believed her parsley tea was a sure bet for rheumatism and to stimulate and refresh the kidneys and urinary tract to improve the flow. In season, she’d take a handful of washed, freshly harvested parsley or a tablespoonful of parsley she grew, dried and crumpled. She then placed parsley in a heatproof earthenware or glass container, with about 2 cups of boiling water poured over and allowed it to steep. Once the brew was cool or cold, she strained off the liquid and would drink a half-cupful one hour before meals. Granny also recommended parsley tea to restore a clear colour to cloudy urine and always said that herbs, fruit, flowers, vegetables and fields of grain follow the sun, even on cloudy days. †


The situation


The suggestions


The outcome


•  Horace’s CPP at $1,200 per month;

•  Belle’s CPP at $720 per month;

•  two Old Age Security benefits of $546 per month;

•  two monthly RRIF payments of $800; and,

•  monthly payments from non-registered investments totaling $6,400 for the couple, assuming a four per cent return from invested money. 


Investments


There were several speakers on hand. One was Jack Braun, an instructor at the Assiniboine Community College at Brandon. Braun gave a hands-on demonstration of some handy tools you might want to add to your summer field scouting kit.


1. Square measure


You can weld your own square measure. Braun recommends making one that measures one-tenth of a square metre. That way, you can count what you’re looking for and multiply it by 10 to get a simple “per square metre” count. 


This tool could be especially useful for counting flea beetles. 


2. Three-sided measure


Again, you can make one otf these at home. It has three sides so you can easily slide it into a plant stand. 


This can be useful for counting diamondback moth larvae.


3. A bigger three-sided measure


Braun suggested making yourself a bigger one as well. Since a metre squared is such a large area to count, it would be helpful to make one that measures a quarter metre squared. Just count what you’re looking for in the area, and multiply by four.


This larger size could be useful for counting bertha army worms.


4. A counter


It could be really useful to have a clicker you can hold in one hand. That way you can count bugs or weeds with the click of a button, rather than trying to keep track of numbers in your head.


5. Soil sieve


These come in different screen sizes for different soil types. If you have sandy soil, you’ll need a smaller screen than someone with heavy clay. 


Braun told farmers to remember that cutworms will go deeper if it’s dryer.


6. Aspirator


As aspirator is basically a vial with a straw. Use it to trap fast moving insects by holding one end of a tube or straw near the bug, then breathing in to suck the bug into the vial. Once you have the bug in the vial, you can take it home for full identification, or send it on to a lab for analysis. 


You can buy an aspirator from a hobby or specialty store. Or, you can make your own. I found directions online at www.evergreen.ca (search for aspirator to get to the “suck-a-bug” page.) Just don’t forget the filter, unless you want a mouthful of bug.


7. Sweep net


A standard sweep net has a diameter of about 15 inches.


Braun recommended holding it like a hockey stick, as if you were about to take a power shot. Sweep the net in front of you, 180 degrees. Then step forward, and sweep the net 180 degrees back.


This can be useful for counting lygus bugs.


And some other things


The Canola Council of Canada has a long list of additional items to include in a complete scouting kit. Find the full article at www.canolawatch.ca (search for “field diagnostics checklist”). 


•  Magnifying glass

•  Clippers

•  Hand trowel

•  Seed depth finder

•  Containers (paper bags, plastic ziplock bags, and old pill containers)

•  Sharpie markers (to label the containers)

•  Flags (to mark problem areas of the field)

•  Disposable booties (to prevent the spread of noxious weeds or diseases like clubroot from field to field)

•  Spray bottle of sterilizer (to sterilize your boots or equipment between fields)

•  Notebook and pen

•  Smart phone or iPad (so you can take photos, use field scouting apps, or access agronomic information)


You may need a bigger truck. 


Happy scouting. †


“Over the last three years we have seen pea acres decline and they are almost non-existent now as excessive and untimely rains, combined with higher than usual disease pressure, both soil borne fusarium, risoctonia and pythium, and in-crop downey mildew, ascocyta and sclerotinia have made producing a profitable pea crop extremely challenging,” says Wade Annand, owner and consulting professional agrologist with Ag Grow Consulting Ltd., based out of the Nipawin and Melfort. Annand and his team work on a daily basis with farmers who are changing their rotations for a variety of reasons.


Two-year rotations


“We are clearly seeing the impact of the two-year rotation in northeast Saskatchewan, even on the farms that have tried to maintain a four-year rotation that includes a pulse crop,” says Annand. 


“Increased sclerotinia pressure is concerning us to a point now that two applications of a fungicide are not out of the question. To date we are not experiencing a lot of pressure from blackleg, but we know that other parts of the Prairies are and that it is just a matter of time before it becomes a problem here. We are also seeing increased insect pressure and believe that it may in part be due to the increased acres of host crops.”


The two-year rotation common in northeast Saskatchewan has led to two very interesting combinations of weed problems. “Initially 46A76 Clearfield canola was an extremely popular variety in this region,” says Annand. “It was not uncommon for it to be seeded every other year with wheat as the break.” 


This led to the development of Group 2 resistant weeds including cleavers, chickweed, hemp nettle and mustard. The products used initially in this system also commonly required a Group 1 herbicide for grass control in that year. 


“The more recent strength of the Invigor canola genetics changed that rotation here to an Invigor canola/cereal rotation,” Annand goes on to say. “Some people estimate that Invigor canola in northeast Saskatchewan in the early to mid-2000s held 80 per cent market share. To date we don’t find that this system has created any resistant weed problems for us, however, its weakness on cleavers, hemp nettle and wild buck wheat, as well as its general use pattern including a Group 1 herbicide for wild oat control has led to a buildup of these weeds.” 


Annand’s experience is that the use of Group 1 wild oats herbicides in each of these systems has contributed to the level of Group 1 resistant wild oats that are prevalent in the area. In each of these scenarios the volunteers have become considerable weed problems the next time the same herbicide tolerant system is grown.


Northeast agronomics


In northeast Saskatchewan rotation management is likely different than in many parts of the Prairies. Farmers in that area face their own set of economic and environmental conditions which dictate that a canola/cereal rotation is the norm now, and likely will continue to be at least in the short term. 


“We find now that we are working with our customers to rotate the herbicide tolerant system and the genetics within that system if it is possible,” says Annand. “We also find that we are working toward having more than just wheat as the cereal crop. Including oats and barley in rotation helps us to change the seeding dates in the years that are not canola and change the competitiveness of the cereal against the weed problem.” Changing the timing of the non-selective herbicide applications can go a long way to impacting overall weed populations as well.


Ag Grow Consulting would like to see farmers in this area be able to get back to a longer rotation and reduce their dependence on canola as a cash crop. To help in that advancement, Ag Grow Consulting started a research company AGC Research, with a goal of providing farmers in northeast Saskatchewan with local information on an on-going basis. 


“As part of our research initiative we have begun to look at corn as an option, and plan to seed it again in 2013,” explains Annand. “We also plan on seeding a number of varieties of soybeans in 2012. In both cases we are looking at the whole agronomy package for these crops to ensure that we can help growers get started on the right foot. We believe that breeding advances of these crops will make them rotational options for us in the next five to 10 years.” †