Beyond Agronomy News: February 24th 2009

Agronomy

Seeing Western Australia's soils made me appreciate our own

I was glancing at the sandy landscape on a recent drive north of Perth, I noticed rows of stubble popping through and wondered, why do these fine people grow wheat on a beach? We think we have challenging soils in Alberta but we've got nothing on Western Australia. They have some of the world's oldest, most weathered soils you can imagine. A lot of holes have been dug at my feet as each farmer I visit tries to impress the foreign agronomist by bringing a spade to show off their poor soils. It reminded me of how guys show off their scars to one another! Instead, they were lining up to show me how bad and challenging their soils are. Well, my eyes have been opened, that's for sure.

You'd be hard pressed to find a soil where you can dig deeper than eight inches before hitting a hard pan. That hard pan is made up of 1:1 Kaolinitic clays that are hard as a rock when dry and sticky and waterlogged when wet. The picture above shows is a trench displaying common subsurface soil. Never mind the subsoil, the top six inches of soil contain oxy-hydroxide sands which leak huge amounts of acid into solution when wet, causing serious aluminum toxicity and locking up massive amounts of phosphorus. I see it as a worst case scenario! You get the root pruning effect from the aluminum toxicity and then add poor phosphorus availability. How do you establish a root system to support any plant with that many challenges being thrown at it? And yet, these guys can produce 4 T/ha (60 bu/ac) wheat crops with an average hovering around 2.5 T/ha (35 bu/ac).

It's been very interesting to see the cropping challenges over here and I can hardly imagine what we could do with the soils we've been blessed with.

Curious to know more about Western Australia's geology? Click here

Capturing solar radiation to capture yield

One of the least discussed components in grain production is solar radiation. I suppose many have felt it to be to complex or a variable we can do nothing about. You plant the crop, sun comes up, sun goes down, pass the peanuts. However, if you look outside of grain production into vegetable and fruit production, you'll find growers using techniques like timed planting cycles, tailored row orientation, staggered heights between rows and mixing plant varieties to maximize light interception. This has me thinking about our farming systems and the things we do that inhibit the capture of solar radiation.

To begin, solar interception drives photosynthesis which is a process that converts carbon dioxide, water and light into sugars which are used as energy to drive growth and fruit production. Any time we limit the plants ability to photosynthesize, we impact yield. One of the interesting things I learned from the Kiwi's focus on canopy management was their ability to maintain green leaf area with plant stand densities, nitrogen timing, growth regulators and strobilurin fungicides. They will tell you that in New Zealand, every day you keep a wheat plant from naturally senescing or ripening, you'll gain 250 kg of grain per hectare (3.7 bu/ac) per day. That's the first time I've ever heard of such a measurement and I plan to explore what we can do better in Canada to help maximize the capture of solar energy by delaying natural senescence.

The map to the right shows the average yearly solar radiation units around the world, purple being the least and red being the most units. You can see that New Zealand, where two Guinness world record wheat yields were is in a green area and England, where another wheat record was, is in the blue. Where does your farm fit on the map; are you at a solar disadvantage or advantage? How can you manage your plant canopy to capture more sunlight? SL

Map source

Is the grass greener on the other side of the world?

In each country I visit, the usual joke is about how great it must be to farm somewhere else. In fact, one of the most frequent questions I get is: "Which country offers the most opportunity in farming?" People typically look across the pond and gripe about the subsidies others receive or the cheap cost of land relative to potential revenue and utter how wonderful it must be to farm 'over there'. Well, the answer is simple and you know it. The grass is rarely greener on the other side.

In my opinion, the areas that offer the greatest potential for return on capital are in the high risk areas of Eastern Europe, Russia and Brazil. Land values are relatively cheap compared to other developed nations such as North America, Europe, Australia and New Zealand and their production potential is very good. However, the cost savings in land can be swallowed up in inefficiencies, violation of property rights, transportation logistics and expensive capital borrowing costs. Bottom line: As Canadian producers, we may not have it easy but we have freedom and a choice of opportunities if we're game to pursue them. What more could I need?

Photo Album

1. Coarse, ancient, hard pan, acidic soil, WA
2. Installing tile drainage in saline waterlogged area, WA
3. Contour banks to prevent erosion, NSW
4. O-baa-ma leads the way, NSW
5. Required tourist photo, WA
6. Learning the finer points of wool from Sam Archer in Gundagai, NSW
7. 8530T JD and grain cart set up on 120 inch centers for controlled traffic farming, 15 inch tracks on tractor, VIC

Obama's visit to Canada

February 23, 2009- The pinnacle of last week's news was, without a doubt, the visit of President Obama to Canada. So what does this mean for climate change policy here in Alberta?

There seemed to be many interpretations of Obama's and Harper's comments and responses during the press conference following the two leaders meeting. It was a "meet and greet" after all, and perhaps it's a little premature to look for substantive policy announcements. Of interest was the announcement to create a dialog on clean energy and the ever so subtle avoidance of any commitments on climate change policy. Some may view this as tacit endorsement for Canada's general lack of action on the subject, but something much more significant may be behind it.

Prime Minister Harper was very quick to blame his lack of action on the climate change file on Obama's predecessor, saying we couldn't act without the support of our largest trade partner. That's right, Canada had been advocating meaningful climate change policy all along and trying desperately to deploy it, but the Bush administration stopped it cold. Now that Obama's offers a new hope for climate change policy, Prime Minister Harper advises we have to wait for the USA to catch up and develop their own policy before we can move on ours. This is where it starts to get interesting.

Something that didn't make the general news in Canada was the move on Tuesday last week by the Environmental Protection Agency (EPA) to regulate carbon dioxide. Lisa Jackson, Administrator of the EPA, announced the Agency's intent to review the current order established under the Bush Administration that does not require proposed coal fired electricity generation to consider monitoring and reducing carbon dioxide emissions. Also, this would open the door to the EPA regulating carbon dioxide in general across the economy. This is significant because it now gives the US Congress good reason to move promptly on climate change policy, or forfeit it to the EPA. Oddly it is conceivable that Large Final Emitters (LFEs) in the USA would begin to strongly petition Congress to regulate GHG emissions and soon.

Now back to Canada, with our Government sidelined waiting on the USA to develop its GHG policy before acting. Given the influence the recent move by the EPA is likely to have, the USA may have a meaningful GHG policy before we know it. It would also appear that the US is not about to reach out to Canada for input. This would leave us to integrate immediately into the US system of GHG reductions. So let's hope it's something we can live with in Alberta and Canada. At least in Alberta we have a GHG policy that isn't set to expire until 2014, so there is a reasonable chance we will have some time to adopt, particularly if the GHG reductions are more onerous than what we have in place today.

Reference: Bruce Love, Preferred Carbon

Disclaimer: The views expressed in this article are those of the author only and are not intended to represent financial advice.

PS: Activity or at least interest in Alberta GHG offsets continues to grow as the end of the second compliance period true up approaches. Prices for agricultural (tillage) based offsets continues to suffer from a wide range of values based on quality and the party selling. As of late last week, values quoted to Preferred Carbon ranged from $10/tonne to $13.50/tonne.

Market News

Bill Gary's Price Perceptions comes to Canada

I've been working diligently to get Bill Gary of Price Perceptions to deliver a bi-weekly technical analysis on Canadian grains. Bill Gary is well known for his easy to read technical analysis on US commodities. Well, I've managed to persuade him and the first issue arrived on Friday. The technical analysis includes spring wheat, feed barley, canola and the Canadian dollar. Bill Gary is by far the best technical analyst I know and has over 30 years experience in the industry. His information will provide us with a new tool to help improve the timing of our grain marketing. I'm tired of the reactive analysis in our current grain market newsletters- finally, we have a proactive tool at our disposal! Enjoy the read and the education. If you have any questions, just drop me an email. SL

Sign up today for a free trial by clicking on www.cis-okc.com/CanSup.html or calling (800) 231-0477.

Fundamental Analysis

Technical Indicators

I have set up these weekly updates to include market entry indicators to help you improve the timing of your grain marketing. Also, I added market trend indicators to give you a sense of the short and long term market trends.

The long term market trend, based on a 45 bar moving average, is UP. The short term market trend, based on a 5 bar moving average, is DOWN. Volume is trending lower. In general this is bearish. MACD is in bearish territory.

The MACD is in bearish territory. The long term trend, based on a 45 bar moving average, is DOWN. The short term trend, based on a 9 bar moving average, is DOWN. MACD is in bearish territory. However, the recent upturn in the MacdMA may indicate a short term rally within the next few bars.

Glossary of Technical Terms

International Crop and Weather News