Potash prices have been falling after shipments from Belarus and Russia resumed. These exports had been significantly restricted last year following Western sanctions imposed on Russia in response to its invasion of Ukraine.

Demand for fertilizers was also weak during much of the year, analysts have said, as farmers waited for prices to settle down.

Potash prices averaged $250 per tonne during the reported quarter, the company said, compared with $633 per tonne a year earlier (all figures US$).

The company’s U.S.-listed shares fell three per cent after the bell.

Nutrien said potash sales volumes, however, climbed 23 per cent on strong sales in North America.

Fertilizer inventories in the U.S. had been running low which should result in relatively robust demand, BofA Global Research analyst Steve Byrne had said ahead of the earnings.

On an adjusted basis, Nutrien reported earnings of 35 cents per share for the three months ended Sept. 30, compared with the average analyst estimate of 64 cents, according to LSEG data.

Nutrien, the top U.S. agricultural retailer, also narrowed its adjusted earnings forecast for 2023 to a range of $4.15 to $5 per share, compared with a range of $3.85 and $5.60 earlier.

The company forecast fourth-quarter fertilizer demand would be up five to 10 per cent year-on-year.

Nutrien added it was lowering its nitrogen sales volume forecast due to the unplanned outages in the third quarter and pull-forward of a planned maintenance outage at its Borger site in the current quarter.

— Reporting for Reuters by Sourasis Bose in Bangalore.

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The count for April 2023 from the Association of Equipment Manufacturers (AEM) puts self-propelled combine sales in Canada at 166, up 50.9 per cent from April 2022, and at 572 for the year to date, up from 246 in the year-earlier period.

Sales of two-wheel-drive (2WD) tractors in Canada saw a marked decline in April, particularly in models under 40 horsepower (1,269, down 34.4 per cent). April sales of 2WD tractors came in at 2,098 for the month, down 27.7 per cent from April 2022, and at 7,462 year-to-date, down 15.1 per cent from the year-earlier.

Taken together, sales of tractors and combines in Canada in April 2023 were below the total for each of 2021 and 2022 and below the five-year (2018-22) average.

“In April we saw an increase in sales of the 100+hp farm tractors, but a decline in both the smaller tractor units, which is likely due to sub-compact market decline, which represents a large volume of units and had record sales in 2020 through 2022,” Curt Blades, senior vice-president, industry sectors and product leadership for Milwaukee-based AEM, said of the combined Canada/U.S. market in a release.

“And because commodity markets for agriculture products remain strong, we continue to see increases in sales of the larger, more expensive segments of 4WD tractors and self-propelled harvesters.”

In Canada, sales of 4WD tractors reached 166 in April 2023, up 50.9 per cent from April 2022, and 572 year-to-date, up from 246 in the year-earlier period.

Similarly, in the U.S., sales of combines and 4WD tractors were up 23.1 and 54.1 per cent in April 2023 over April 2022, and up 71.9 and 51.6 per cent in the year to date, while 2WD tractors below 100 hp saw marked declines.

AEM emphasizes its data are, in part, estimates and represent most, but not all, manufacturers in each product category being sold at retail in Canada. — Glacier FarmMedia Network

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According to the latest FCC Food and Beverage Report, released Tuesday, sales increased 11 per cent to $156 billion in 2022. These gains came largely from higher export values and strength in the grain and oilseed milling industry.

On the manufacturing side, margins were tighter last year as companies navigated increases in the prices of raw materials, labour shortages and supply chain disruptions.

“Gross margins as a percent of sales fell to their lowest level in over 20 years in 2022,” FCC’s chief economist J.P. Gervais said.

“While margin trends vary based on industry, we do anticipate an overall improvement to gross margins in the coming year.”

FCC projects a modest two per cent growth in sales in 2023. However, dairy, meat and seafood are expected to outperform that forecast.

“Consumers cut back on discretionary spending last year as they faced higher inflation, depleted savings and higher costs of servicing debt,” Gervais said.

Domestically-produced food faced a decline, reverting to the pre-pandemic consumption mix of domestic versus foreign foods. However, that’s partly the result of an increasingly diverse Canadian population looking to put different kinds of food on their tables.

“Inflation led to changes in food consumption decisions which resulted in fewer purchases of locally made or higher-value foods that consumers supported in mass during pandemic lockdowns,” Gervais said.

“We all know money doesn’t have the same buying power it once did, and consumers are being careful with their grocery budgets. Despite inflationary pressures, we continue to see Canada’s food and beverage sector adapt and innovate to meet the changing market demands.

“The sector remains healthy and has a positive long-term outlook.”

Global demand for Canadian-produced food is growing rapidly, he said. Promising food manufacturing innovations and technology can position Canada to expand its reach into profitable emerging industries.

There is also opportunity to grow the sector by meeting consumer demand for affordable, convenient and sustainably produced foods.

“How businesses adapt to changing consumer needs and economic conditions will determine their success going forward,” Gervais said.

“There have been many tests of resiliency and adaptability in recent years and the strength of the sector proves that despite challenges, there are opportunities Canadian food and beverage manufacturers are eager to take advantage of.”

The annual FCC Food and Beverage Report features insights and analysis on grain and oilseed milling; dairy, meat, sugar, confectionery, bakery and tortilla products; seafood preparation; and fruit, vegetable and specialty foods as well as soft drinks and alcoholic beverages. — Glacier FarmMedia Network

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Statistics Canada on Wednesday began releasing data from its 2021 Census of Agriculture, and the agency’s changes to the definition of a “farm” — and a noteworthy new entrant not included in the listed mix of Canadian cash crops — make some, but not all, direct comparisons to the numbers from 2016 or earlier censuses more difficult.

StatsCan noted a “significant conceptual change” for 2021 in which a “farm” or an “agricultural holding” now refers to “a unit that produces agricultural products and reports revenues or expenses for tax purposes to the Canada Revenue Agency.” In 2016 and earlier censuses, a “farm” was “an agricultural operation that produced at least one agricultural product intended for sale.”

That change, StatsCan said, “may result in farms being classified differently across farm types than in previous censuses,” so “comparisons with earlier census results should be interpreted with caution.”

The 2021 census counted 189,874 farms in Canada, for a “moderate” decrease of 1.9 per cent from 2016, on total area of 153,687,771 acres, down 3.2 per cent. The decline in the number of farms was the smallest in 25 years, StatsCan said.

Of the 2021 total, 34.3 per cent of farms are in oilseeds and grains, followed by 20.9 per cent in beef cattle and feedlots; those two sectors combined account for 82.7 per cent of total farm area.

Many farms, StatsCan said in Wednesday’s report, have consolidated and become increasingly larger both in terms of sales and number of employees. “Conversely, smaller and mid-sized farms are declining in Canada, thereby impacting the rural landscape and profile of Canadian regions.”

The proportion of farms with sales of $1 million or more in 2020 was 9.9 per cent, up from 7.2 per cent in 2015, StatsCan said.

And in 2021, farms reporting at least $2 million in sales accounted for over half of Canada’s total farm operating revenues, at a share of 51.5 per cent, up from 41.5 per cent in 2016.

Farm operating revenues in Canada totalled $87 billion in 2020 against expenses of $72.2 billion, StatsCan said. On average, for every dollar in revenues, farms incurred 83 cents in expenses. Farms classified as oilseed and grain farming were the most profitable, with an expenses-to-revenues ratio of 0.76; Sheep and goat farms had the highest ratio, at 0.97.

Older on average

The average age of Canada’s farm operators rose to 56 in 2021, from 55 in 2016. The median age of farm operators, meanwhile, is 58, up from 56. In 2021, 60.5 per cent of farm operators were age 55 or older, up from 54.5 per cent in 2016; Canada’s share of young (under age 35) operators, meanwhile, is 8.6 per cent, down from 9.1 in 2016.

StatsCan suggested that aging trend, as well as the “challenges associated with the COVID-19 pandemic,” may have played a role in an increased proportion of farms in Canada reporting a succession plan — now at 12 per cent, up from 8.4 in 2016.

The census also points to a continuing decline in the number of farm operators, at 262,455 in 2021, down from 271,935 in 2016. reported from the previous census. In 2016, there were 271,935 farm operators, and by 2021 the number decreased to 262,455.

StatsCan also noted that its count of female operators is up for the first time since 1991, at 79,795 in 2021, from 77,970 in 2016.

The number of farm operators working off the farm in 2020, at 125,280, or 47.7 per cent, up 3.8 per cent from 2015. Of that number, full-time off-farm workers made up 66 per cent, down from 68.1 per cent in 2015.

The new census also shows a less-than-surprising climb in farmland values, with contributing factors including “strong commodity prices, low interest rates and a growing demand for housing in urban areas.”

When measured in constant 2021 dollars, the reported total market value of land and buildings for farms in Canada increased by 22.7 per cent to $603.8 billion in 2021 compared to 2016. Market value of owned land, buildings and fixed equipment increased by 19.1 per cent to $420.9 billion in 2021, while market value of rented land and buildings was up 32 per cent at $182.9 billion.

Under glass

Among farm practices, StatsCan noted an uptick in use of sustainable land practices such as in-field winter grazing or feeding, rotational grazing, winter cover crops and shelterbelts, at 64.5 per cent of farms in 2020, up from 53.7 in 2015.

In 2021, 5,658 farms reported growing organic products, making up three per cent of total farms, up from 2.2 per cent in 2016.

Also, 11.9 per cent of farms reported “some form of renewable energy production” such as solar power or others in 2021, up from 5.3 per cent in 2016. Other technologies that “became more prominent” in 2020 included automated guidance steering systems (up 28.2 per cent from 2015) and geographic information system mapping (up 58.6 per cent).

Farms in Canada also reported a 23.2 per cent increase in total greenhouse area to 330.5 million square feet in 2021. Of that total, 66.5 per cent was in fruit and vegetables.

That count, however, doesn’t include weed. StatsCan noted the data it released Wednesday excludes cannabis operations — on which the agency in 2021 gathered Census of Agriculture data for the first time. It said it will release its Census of Agriculture data on cannabis operations separately later this year.

StatsCan’s quarterly data on farm cash receipts and annual data on net farm income, meanwhile, have included cannabis production since it was legalized in 2018. — Glacier FarmMedia Network

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Catching up with rival trucks from Stellantis NV and Ford Motor Co., most 2022 Silverado models will get larger dashboard screens and new connectivity technology featuring built-in Google voice commands and software.

Chevrolet also will add a 420-horsepower Silverado ZR2 designed for rugged off-road adventures — or to give the appearance that the owner would have them. The Silverado ZR2 will chase Ford’s F-series Raptor and the Ram TRX from Stellantis, which are attention-getting performance models for those brands.

The current Silverado, launched in early 2019, has been outflanked in sales by rival Stellantis NV’s Ram pickup. The Ram in 2018 got a makeover with a more refined interior and a 12-inch dashboard screen that was closer in style to a Tesla Model S sedan than a conventional pickup truck.

The Fiat Chrysler unit of what is now Stellantis also expanded production capacity for Ram pickups in North America, gunning to displace the Chevy Silverado as the No. 2 brand in the North American pickup segment.

That strategy — led by Mike Manley, now head of Stellantis North America — worked. Through the first half of 2021, Ram’s pickups have outsold the Silverado and are now in second place behind Ford’s F-series trucks, the best-selling model line in the United States for more than 40 years, according to sales data compiled by Automotive News.

Smartphone-like experience

Steve Carlisle, head of GM’s North American operations, told Reuters GM has learned from the challenge from Ram. “You have to be very agile and react,” he said. “And maybe ask different types of questions.”

Going forward, Carlisle said GM sees the market moving from “bigger is better” when it comes to dashboard displays to more emphasis on improving the user experience.

Carlisle said his goal for the revamped Silverado is to knock Ford out of the top spot in the segment.

“We will not rest until that happens,” he said, though he added, “we are going to do the right thing from a brand point of view.”

Ram and Ford have their own upgrades coming for 2022. Ram trucks will get enhanced infotainment systems. Ford is touting a hybrid system available on the F-150 pickup that can power a house, and promoting its all-electric F-150 Lightning coming next spring.

The new Silverados will get other new technology. The redesigned trucks will be the largest-scale application of GM’s partnership with Alphabet Inc.’s Google to create a more smartphone-like experience in cars. And top-of-the-line Silverados will offer GM’s Super Cruise system as an option to enable hands-free driving on more than 200,000 miles (321,869 km) of roads in Canada and the U.S.

The Silverado ZR2 responds to a more traditional form of automotive competition. Powerful pickup trucks equipped with tall, beefy suspensions and other modifications to handle racing over rough desert or leaping sand dunes have become the 21st century answer to Detroit’s 1960s muscle cars. Ford and Ram had models designed for extreme off-road enthusiasts. Chevy did not. Now it will.

Carlisle said 60 per cent of Chevrolet Silverados sold now are “lifted trucks” with tall suspensions. The Silverado ZR2 will add a 420-hp, eight-cylinder gasoline engine to the formula. Carlisle said the ZR2 could account for more than 10 per cent of Silverado sales.

Ford’s Raptor has a starting price of nearly US$66,000. Carlisle said Chevrolet’s ZR2 will be more “accessible” with a lower starting price.

— Reporting for Reuters by Joe White in Detroit.

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The move comes months before key mid-term elections, with centre-left President Alberto Fernandez keen to avoid a sharp rise in the cost of beef in a country where families regularly gather to cook meat around the “asado” grill.

Spiraling consumer prices could hurt his party’s chances with voters in the South American country already feeling the impact of the coronavirus pandemic.

The government had in June limited exports of some beef cuts until the end of the year, sparking tensions with farmers. A cap until the end of August on beef shipments at 50 per cent of the previous year’s level has now been extended by two months.

“In the short term, the tool of limiting sales abroad is essential to guarantee Argentine access to beef in the face of the sharp increase in prices for consumers,” it said in a decree in the official gazette.

Argentina is the world’s fifth-largest beef exporter and a key supplier to China. It is the top global exporter of processed soy and a major wheat and corn producer.

Jorge Chemes, president of the Argentine Rural Confederations, said that farm bodies would meet before deciding what action to take. He threatened rallies and trade halts.

“I’m certain we will have something along the lines of a trading halt,” he told a press briefing.

Lost millions

The president of Sociedad Rural Argentina (SRA), Nicolas Pino, said members would meet on Wednesday and Thursday and could then announce a commercial strike.

Earlier this year, protests by farmers led to the national livestock markets closing.

Argentina has suffered from high inflation for years, with the annual rate running above 50 per cent, and has started to emerge this year from a recession since 2018.

Miguel Schiariti, head of Argentina’s CICCRA meat industry chamber, told Reuters the sector had lost around US$100 million in exports last month due to the caps, which could push up prices.

Another industry source said that they handed momentum to other producers.

“The government does not understand the damages of extending the cap, since the industry has lost millions of dollars with the restrictions so far and it is a way to continue giving markets to other countries,” he said.

— Reporting for Reuters by Maximilian Heath and Nicolas Misculin.

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Russia, the world’s largest exporter of wheat, generally sells most of its crop during the first half of its marketing season, which starts on July 1.

However, exports are down so far this season with farmers holding on to grain from a smaller crop and forward sales impeded by the wheat export tax, which changes each week.

SovEcon consultancy estimates that exports in the first two months of the season will total 5.3 million tonnes, down from seven million by the end of August a year ago.

Russian sales to Egypt’s state-run General Authority For Supply Commodities (GASC), a major buyer, are relatively low so far due to competition with Ukraine and Romania, which are both harvesting good crops this year.

The wheat export tax, meanwhile, is expected to continue rising in coming months but unpredictability over the exact level makes it hard for traders to book sales with delayed shipping.

“It is easier for traders to sell Russian wheat to markets with quick supply periods, not to the GASC which requires shipping a month or a month and a half after the deal,” Sovecon’s Andrey Sizov said.

Russia could become more active at the GASC tenders toward the end of 2021 when Ukraine and Romania have less wheat to offer, two traders told Reuters.

“There is a possibility that our non-presence at the GASC will last until the moment we remain alone there,” Dmitry Rylko at the IKAR consultancy said.

However, Russian wheat is still in demand elsewhere and new markets could open up.

IKAR expects Russia to supply a record amount of wheat to Saudi Arabia as a good quality crop will help it to compete with European countries this year, Rylko said.

Supplies to Iran will remain very high, active shipments to Algeria may emerge and exports to drought-hit Kazakhstan will jump, he added.

Sovecon expects Kazakhstan to import two million tonnes of Russian wheat this season.

— Reporting for Reuters by Polina Devitt.

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Brandt Tractor, the equipment sales arm of the Regina-based Brandt Group, on Monday announced an agreement to buy all of publicly-traded Cervus Equipment Corp. for $19.50 a share, valuing the Calgary-based chain at about $302 million.

Cervus’ holdings today include 22 Deere dealerships in Alberta, Saskatchewan and B.C., 17 Peterbilt dealerships in Ontario and Saskatchewan, eight forklift dealerships in Alberta, Saskatchewan and Manitoba, seven Deere dealerships in Australia and nine in New Zealand. Another Deere dealership is due to open at Penhold, Alta., near Red Deer, next year.

Cervus dates back to 1982, when the company’s current chairman Peter Lacey bought five Deere dealerships in Alberta. It listed on the TSX in 2000 and went on to buy further outlets across Canada, expanding also into New Zealand and Australia in 2010 and 2012 respectively.

Brandt Tractor, meanwhile, operates 56 dealerships across Canada, selling Deere equipment such as skid steers, dozers, excavators and feller bunchers and also handling sales and service for brands such as Ditch Witch, NPK, Hammerhead and Topcon.

Brandt CEO Shaun Semple said Monday the addition of Cervus would see Brandt Tractor shift its dealership chains into three new segments “dedicated to serving the agriculture, transportation and material handling industries.”

Those segments, he said, “will further establish Brandt as a total solutions provider across our diverse customer groups.”

“As a private company with a committed, well-capitalized and long-term owner, Cervus will be better positioned for the next stage of evolutionary growth for our dealerships,” Cervus CEO Angela Lekatsas said in the same release.

“The size and scale of the entity created by the combination of our two companies will allow for increased investment into Cervus for the benefit of our employees and customers.”

John Deere Canada and Peterbilt Motors have already consented to the change of control, Brandt and Cervus said in their release.

Brandt and Cervus said they expect to close the deal sometime in the fourth quarter of this year, pending the outcome of a special meeting of Cervus shareholders to be held sometime in October.

Among Cervus shareholders, Lacey, who holds about 18 per cent, has already locked into an “irrevocable” agreement to vote his shares in favour of the Brandt deal.

Other Cervus directors and officers, who in all hold about one per cent, have “revocable” agreements in place to vote in favour. Also, as of Monday, Brandt and affiliates together hold about nine per cent of outstanding Cervus shares.

Brandt said its proposed deal represents a 37 per cent premium to the 20-day volume-weighted average price per Cervus share for the period ending Aug. 13.

Cervus on Monday also announced its best-ever second quarter, booking $14.88 million in adjusted before-tax income for the period ending June 30, up from $8.08 million in the year-earlier period. Gross revenue from sales and service for the period came in at $402.3 million, up from $340.97 million in Cervus’ 2020 Q2.

Ag equipment revenue specifically was up 10 per cent in the quarter, “primarily driven by increased customer demand for new equipment, supported by strong market fundamentals in all our geographies.” — Glacier FarmMedia Network

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Favourable rains across the Prairies have enhanced crop prospects for barley and wheat. April live cattle futures reached over $136 last week, which also reinforced buying interest. Competition was extremely fierce for yearlings. Major operations were sending “just get ’em” type orders to cattle merchants. Ideas were that paying $2-$3 more today is better than a market $8-$12 higher 30 days forward.

The quality of cattle coming on the market was quite variable. There appeared to a resurgence of buying interest for featherlight calves. Ranchers were being offered fair market value for October delivery. Buyers appeared to be anxious to secure ownership. Alberta fed cattle prices at $275 dressed is the main factor encouraging the overzealous demand.

Volumes were quite thin, with many auction barns in holiday mode. Some Saskatchewan ranchers were hauling feeders into Alberta.

In central Alberta, larger-frame tan mixed steers weighing 935 lbs. coming off small grain ration with full health program traded hands at $183; mixed heifers weighing 900 lbs. with similar qualities were valued at $166. In southern Alberta, larger-frame medium-flesh Simmental-blended steers weighing 825 lbs. were quoted at $194; Angus-based larger-frame black heifers weighing 830 lbs. were valued at $170 in the same region.

In east-central Alberta, black Limo-based steers weighing 720 lbs. were quoted at $219; mixed medium-frame Hereford heifers with lighter flesh averaging a hair over 700 lbs. were reported at $185.

In the Lethbridge area, Charolais steers averaging 615 lbs. were quoted at $228; south of Edmonton, mixed long-time-weaned heifers on full health program weighing 615 lbs. were valued at $194. There were limited number of calves available under 600 lbs. which made the market hard to define. There was a small group of mixed steers weighing 540 lbs. which reached up to $243 in central Alberta.

There is a seasonal tendency for the feeder market to strengthen between the middle of June and the middle of August. This pattern may be exaggerated this year due to the sharp fundamental change in the feed grain complex between now and fall.

— Jerry Klassen manages the Canadian office of Swiss-based grain trader GAP SA Grains and Produits Ltd. and is president and founder of Resilient Capital, specializing in proprietary commodity futures trading and market analysis. Jerry consults with feedlots on risk management and writes a weekly cattle market commentary. He can be reached at 204-504-8339 or via his website at ResilCapital.com.

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As crop prices rise, farmers have greater incentive to use fertilizer and maximize yields, boosting potash demand and spurring a surge in global sales of potash fertilizer.

Nutrien expects higher output to boost core earnings from its potash business in the second half of 2021.

The Saskatoon-based company said in May it expects potash sales in the range of 12.5 million tonnes to 13 million tonnes for 2021. Last month, it also raised full-year forecast for adjusted net earnings per share to between $2.55 and $3.25 from $2.05 to $2.75 forecast earlier (all figures US$).

Domestic and offshore potash sales volumes are currently fully committed through September, based on original production profile for 2021, Nutrien said in a statement.

The company said it will be hiring more workers and “adapting its resources” to help lift production across most of its mines — particularly at its Vanscoy facility, about 35 km southwest of Saskatoon.

Nutrien was also recently reported to be in discussions with international mining firm BHP about a partnership on the latter company’s major potash development at Jansen, Sask., about 60 km southeast of Humboldt.

— Reporting for Reuters by Rithika Krishna in Bangalore. Includes files from Glacier FarmMedia Network staff.

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