The federal ag lender on Tuesday said it will offer an unsecured credit line of up to $500,000 with loan processing fees waived, “to help producers, agribusinesses and agri-food operations with their immediate cash flow needs.”

FCC said it’s making the offer to both new and existing customers who are “experiencing financial difficulties, including cash flow challenges, due to higher-than-average input costs and elevated interest rates.”

While the Bank of Canada has maintained its policy rate since January, FCC warned in a March outlook that “additional intervention” could still be required to get inflation to two per cent.

Elevated inflation and interest rates are expected to slow consumer spending and business investments, FCC said in March, adding that if the U.S. Federal Reserve continues raising its policy rate, that could lead to a lower Canadian dollar if the Bank of Canada extends its pause.

A global economic slowdown has also resulted in lower growth in Canadian ag and food export volume, FCC said at the time.

Cost pressures in the “current economic environment” are difficult to pass on, FCC said Tuesday, and that’s led to “tough financial circumstances for some operations.”

“While the current experiences of individual operations within the different agriculture and food sectors are varied, we hope those who identify with these challenges will use this credit line as an opportunity to work through their current position and build back stronger than before,” FCC chief operating officer Sophie Perreault said in a release.

FCC reiterated it can offer flexibility to customers who are going through “challenging business cycles and unpredictable circumstances” on a case-by-case basis, such as through flexible payment options, payment deferrals or credit lines.

For example, the lender said last Thursday it would consider additional short-term credit options, deferral of principal payments and/or other loan payment schedule amendments for customers in B.C.’s wine sector up against financial hardship following “prolonged cold temperatures” last winter that caused significant damage to wine grapevines.

FCC said May 16 it would also consider similar supports for maple syrup producers in Eastern Canada following an “unfavourable change in temperature this spring” that shortened the maple syrup harvest in most parts of the region.

“This limited harvest can cause financial challenges for farm operations – not to mention personal hardship and stress,” Manon Duguay, FCC’s vice-president of operations for Quebec and Atlantic Canada, said in a separate release at the time.

“We stand by our customers over the long term, helping them pursue opportunities and overcome challenges, and this year’s unfavourable temperature has certainly been challenging for many maple syrup business owners.” — Glacier FarmMedia Network

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Peruvian interim President Francisco Sagasti called the death of a protester a “tragedy” and told reporters the government would immediately investigate the first casualty in demonstrations over farm worker rights and wages that began on Monday.

“We do not want anyone to die in protests to defend their labour rights,” Sagasti said.

The death of two young people in Lima last month led to the resignation of Sagasti’s predecessor, Manuel Merino, prompting renewed scrutiny of the actions of security forces in the Andean nation.

Farm workers alleged police had attacked protesters to clear roadways and tame the demonstrations, which spread northward from the country’s south into regions known for vast fields of table grapes, tangerines and blueberries.

“The workers … have been attacked by the police who have arrived in great numbers to prevent them from continuing to block the road,” said Juan Herrera, a national leader of agrarian workers.

Workers from Camposol, a major fruit exporter, joined the fray on Thursday. Farm labourers from agro-exporter Talsa announced they too would join the rallies on Friday.

“All activities have been paralyzed, there are no harvests, there is nothing. Grapes and asparagus are going bad, we are in the middle of the season for these two crops,” Fernando Cilloniz, a grape exporter, told Reuters.

One of four members in the Trans-Pacific Partnership that has yet to ratify that 11-nation trade pact, Peru is a major global exporter of blueberries as well as producing grapes, avocados and asparagus.

Canada, already a free trade partner with Peru since 2009, imports $324 million per year on average (2015-17) in Peruvian ag products including fruits, coffee and oils.

Hundreds of buses and tractor trailer trucks carrying fresh fruit were stranded for the fourth day along the Panamericana Sur highway 300 km south of Lima, prompting clashes with protesters blocking the roadways.

Negotiations between the government and protest leaders have failed to reach agreement, though lawmakers have committed to reviewing a decades-old agriculture promotion law that farm workers view as unjust.

— Reporting for Reuters by Maria Cervantes; writing by Dave Sherwood. Includes files from Glacier FarmMedia Network staff.

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Jason Hanson expects his crews may only harvest five tons of grapes, including his Chardonnay and Gamay varieties, down from the 25 to 30 tons his fields yielded last year. The birds can have the rest, he said, as the fruit has likely absorbed too much smoke to be salvaged and would produce wine that tastes like a “wet ashtray.”

“With the dense smoke that we’ve had at the ground level for so long now, almost everything has to be affected or damaged,” Hanson said. “I have a yearly fight with the birds. This year I’ll just let them win.”

The historic wildfires across the western U.S., home to the bulk of the country’s vineyards and major producers of crops from apples to zucchini, have ravaged farmers and ranchers already hard hit by the Trump administration’s trade wars and demand disruptions from the coronavirus pandemic.

Atmospheric smoke has obscured grape-ripening sunlight while ash has coated green beans, cauliflower and other produce in nearby fields just days before scheduled harvesting. Poor air quality is slowing harvesting as farms limit fieldwork hours and some run low on particle-filtering masks due to the coronavirus pandemic.

For wineries, the wildfires have only deepened recent wounds. A drop in restaurant traffic and smaller crowds visiting vineyards for tastings had already been sapping key sources of revenue.

Many tasting rooms remain shuttered due to fire and smoke risks, while grapes awaiting harvest in storied wine regions such as Willamette Valley or California’s Napa and Sonoma Valleys may be damaged or ruined entirely.

Oregon, Washington state and California together produce about 90 per cent of all U.S. wine. The true impact on the US$70 billion industry will not be known for months as the typical wildfire season is only just beginning, and crop damage can vary greatly from field to field.

“You have a far greater potential for tainted wine the closer you are to the fire,” said Eric Jensen, owner of Booker and My Favorite Neighbor wineries in California’s Paso Robles region.

“We’re testing constantly and we believe in Paso we’ll be blessed because of the distance that the smoke traveled to get to us. But in Napa and Sonoma, the proximity is causing issues.”

Smoke has blanketed much of the U.S. West as fires have charred nearly five million acres, but some wine areas such as Napa, Sonoma, Santa Cruz and Monterey have been much closer to blazes than areas like Santa Barbara and Paso Robles.

Labs overwhelmed

Laboratories that test grapes for smoke contamination are overwhelmed this year, with some taking up to a month to return results, instead of less than a week normally. Vineyards use that data to gauge whether to harvest or not.

Winemakers and scientists are still learning how smoke can affect wine grapes and how the effects can be mitigated.

Australia has been at the forefront of research, as drought-fueled bushfires have riled its industry for years. But studies at American universities have ramped up over the past five years, helped by U.S. Department of Agriculture funding, as climate change is expected to increasingly impact U.S. wineries.

It is too soon to judge how the wildfires will impact 2020 vintages, but harvested grape supplies will likely be smaller, said Glenn Proctor, partner and broker at California-based Ciatti Global Wine + Grape Brokers.

Winemakers short of newly harvested grapes are expected to buy bulk wine from the 2019 season for blending with what is available from this year, he said. Fear of reputational risk will prevent winemakers from bottling and selling any wine with an unpleasant smoke taste, he said.

Ample supplies coming into this season should offset any shortfall from this year’s harvest so work-from-home Zoom Happy Hours will likely not notice any impact, he said.

“I still think we’re going to see some good wines coming out of 2020 because the growing conditions were great through the season,” Proctor said.

“The fires have put a question mark on everything but I’m still hopeful that most of those wines will play out.”

— Reporting for Reuters by Karl Plume in Chicago.

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Global wine output is set to decrease by five per cent compared with last year to 259.5 million hectolitres (mhl), one of the three smallest volumes since 2000, the Paris-based International Organization of Vine and Wine (OIV) said in preliminary estimates for this year.

An expected 12 per cent drop in French production, to 41.9 mhl, and steep declines in Chile (down 21 per cent to 10.1 mhl), Argentina (down 35 per cent to 8.8 mhl) and Brazil (down 50 per cent to 1.4 mhl) accounted for most of the projected global fall, the OIV said.

South Africa was also expected to see a sharp decline in output, losing 19 per cent to 9.1 mhl.

A hectolitre represents 100 litres, or the equivalent of just over 133 standard wine bottles.

A plunge in French production has been widely anticipated after vineyards endured frost and hailstorms in spring and then drought during summer.

The smaller French output should allow Italy to maintain its position as the world’s largest wine producer with an expected 48.8 mhl, although this would be slightly below an estimated 50 mhl last year, the OIV said.

Production in Spain was set to edge up one per cent to 37.8 mhl, keeping it as the third-largest wine producer.

The U.S. would retain its fourth spot among wine producing countries, with output projected up two per cent at 22.5 mhl, while growth was also expected in Australia (up five per cent to 12.5 mhl) and New Zealand (up 34 per cent to 3.1 mhl).

The OIV’s initial global estimates lacked data from some countries, notably China for which it provisionally assumed stable production compared with last year at 11.5 mhl.

The headline worldwide production estimate of 259.5 mhl represented the midpoint of a working range of around 255 to 264 mhl, it said.

The OIV’s most recent data for Canada dates back to 2012, and pegs the country’s wine production that year at 570,000 hl, up from 565,000 in 2011.

— Reporting for Reuters by Gus Trompiz and Pascale Denis. Includes files from AGCanada.com Network staff.

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Finance Minister Randy Delorey’s budget on Tuesday showed an overall $17.1 million net surplus position on $10.15 billion in total expenses and $10.26 billion in total revenues (minus $110.3 million in federal and municipal contributions earmarked for the Halifax Convention Centre project, deemed “not part of normal revenues”).

Apart from the new food bank tax credit, meant to encourage produce donations from farmers, the budget also calls for $3.5 million in new research, product development and market development funding for the province’s wine and vineyard sector.

That funding, Delorey said in his speech, “will pay for more research and development, and it will help our wine producers find new business in new markets… (and) means new products, new businesses and more opportunity in Nova Scotia.”

The wine sector funding follows a joint pledge in late March from the provincial and federal governments, worth $487,960 over two years, to set up a new wine analysis lab at Wolfville-based Acadia University.

The lab is expected to help meet the beverage sector’s “increasing demand” for chemical and sensory analysis services in Atlantic Canada. Wineries in the region today have to seek out such services at labs based in Ontario, Quebec or California.

For rural Nova Scotia, Tuesday’s budget also pledges another $6 million to back high-speed internet service for more homes and businesses.

Lack of available high-speed “is holding too many Nova Scotians back,” Delorey said, and also “hurts small businesses and places an unnecessary burden on potential entrepreneurs.”

Improving high-speed availability “won’t just benefit business (but) will create more connected citizens and consumers,” he said, committing the government to “work with our partners to develop a solution.”

The budget documents released Tuesday also commit the province’s Crop and Livestock Insurance Commission to develop new insurance programs in sectors such as grapes — and to introduce a “new, non-yield-based acreage loss program for vegetables” as an option to conventional “yield-based” insurance plans. — AGCanada.com Network

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European grape growers reported deformed leaves and lower yields after using Bayer CropScience’s Moon Privilege, also known as Luna Privilege in Canada and some other markets.

In Switzerland, losses are estimated at 80 million Swiss francs (C$109 million), according to marketing group Swiss Wine.

Bayer has acknowledged “atypical symptoms” in vines where the fungicide was applied in 2014. Bayer said it was collecting data and assessing how much it will offer to wine growers.

“Bayer will on a voluntary basis compensate affected wine growers which have used the Moon Privilege/Luna Privilege fungicide last year,” a Bayer spokesman said, adding no “clear cause” had been determined.

Bayer has said it expected more than 250 million euros (C$370 million) in annual peak sales from its Luna product line launched in 2012 for fruits and vegetables.

Austria Wine, the marketing arm of that country’s wine industry, didn’t immediately respond to requests for figures for possible damage that may be linked to Moon Privilege.

Jean-Marc Amez-Droz, Swiss Wine’s general secretary, estimated harvest losses totaling 6.65 million kg of grapes in 2015, or about 4.85 per cent of 2014’s crop.

Hardest hit were Pinot Noir grapes, often grown in the German-speaking part of Switzerland, and Chasselas, a white wine grape prevalent in French-speaking Vaud canton. A few growers lost their entire 2015 harvest, Amez-Droz said.

“Wine makers are missing about six million bottles of wine,” he said. “The very young berries just didn’t grow. The development of the berries was totally out of the ordinary.”

Growers who deployed the fungicide late in 2014 in rainy conditions saw more damage than those who applied it earlier in dry weather, Amez-Droz said, a trend confirmed by Bayer.

Switzerland’s Federal Office of Agriculture suspended its approval of Moon Privilege in wine growing in July.

On Wednesday, a spokesman said private growers would need to resolve their own damage claims but the agriculture ministry would continue to work with Bayer to determine the cause. The ministry was also aiming to boost approvals stringency.

“Approval will take at least a year longer, as now we’ll have to investigate damage that might occur a year following application,” spokesman Juerg Jordi said.

Bayer must start from the beginning if it is to sell Moon Privilege again in Switzerland for grape growers, he added.

— Reporting for Reuters by John Miller in Zurich and Ludwig Burger in Frankfurt.

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