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Agriculture

Moisture situation in Alberta following warm and dry first half of winter

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Agricultural Moisture Situation Update – January 3, 2024

Synopsis

This year’s El Niño has developed into a strong El Niño and currently has a 54% chance of developing into a “historically strong” event, according to NOAA. Current forecasts are projecting El Niño to diminish in April 2024. In the past for Alberta, not all El Niño’s have resulted in warmer and drier weather; however, this unusually warm and dry winter will forever be tied to the 2023-2024 El Niño and will serve as an important data point in the future.

In the 90-days since October 6, 2023, temperatures have remained well above average, with many parts of the northern-half of the province seeing temperatures this warm less than once in 50 years (Map 1). This coupled with low precipitation accumulations has resulted in virtually snow free
conditions across parts of all four of our agricultural regions
(Map 2).

Winter Precipitation Accumulations

November 1, 2023 to January 3, 2024

Since November 1st, the unofficial start to winter in Alberta, precipitation has been well below average across much of Alberta’s agricultural areas (Map 3).

Most of the lands south of Grande Prairie and north of Ponoka are estimated to have a winter thus far, this dry on average, less than once in 50-years. Dry conditions have also persisted across the Central and Southern Regions, ranging from a few widely scattered pockets of near normal to at least once in 25 year lows, centered around the Jenner area (approx. 200 km east of Calgary). Total accumulations currently range from less than 3 mm through parts of the North West and North East Regions up to only 20-30 mm along the foothills and through the western and northern portions of the Peace Region (Map 4).

For the dryer parts of the North West and North East Regions this translates to less than 10% of the 1991-2020 average (Map 5).

Elsewhere, most other lands have received precipitation accumulations that have generally been less
than 50% of the 1991-2020 average.

Perspective

From an annual moisture budget perspective, October through to March generally mark the dry season across the agricultural areas (Map 6), accounting for only about 20% of average annual accumulations across most of the Southern Region, to upwards of 30-35% across the Peace Region.

These significant moisture deficits thus far (50% of the way through the dry season), while discouraging to many, make up only a small portion of the annual moisture budget for an area. Winter is not over yet and if the current forecast is correct, a significant cold snap is on its way over the next few days and it is expected to persist well into next week, perhaps even longer. Along with the cold snap, there is also a forecast for moisture and the promise of at least some snow cover across many areas.

Spring is yet many weeks away and anything can happen between now and then. Furthermore, February on average, is the driest month of the year with most agricultural lands normally receiving less than 15 mm of moisture during this month (Map 6). Let’s hope, for the sake of our producers,
that we descend into at least near “normal” winter conditions and that we see one of Alberta’s famous weather reversals, with respect to moisture. Above average snow fall is very much needed now. Much of the land is extremely dry and has been held tenaciously in the grip of a long-lasting dry
cycle that needs to end soon!

Agriculture

It’s time to end supply management

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From the Frontier Centre for Public Policy

By Ian Madsen

Ending Canada’s dairy supply management system would lower costs, boost exports, and create greater economic opportunities.

The Trump administration’s trade warfare is not all bad. Aside from spurring overdue interprovincial trade barrier elimination and the removal of obstacles to energy corridors, it has also spotlighted Canada’s dairy supply management system.

The existing marketing board structure is a major hindrance to Canada’s efforts to increase non-U.S. trade and improve its dismal productivity growth rate—crucial to reviving stagnant living standards. Ending it would lower consumer costs, make dairy farming more dynamic, innovative and export-oriented, and create opportunities for overseas trade deals.

Politicians sold supply management to Canadians to ensure affordable milk and dairy products for consumers without costing taxpayers anything—while avoiding unsightly dumping surplus milk or sudden price spikes. While the government has not paid dairy farmers directly, consumers have paid more at the supermarket than their U.S. neighbours for decades.

An October 2023 C.D. Howe Institute analysis showed that, over five years, the Canadian price for four litres of partly skimmed milk generally exceeded the U.S. price (converted to Canadian dollars) by more than a dollar, sometimes significantly more, and rarely less.

A 2014 study conducted by the University of Manitoba, published in 2015, found that lower-income households bore an extra burden of 2.3 per cent of their income above the estimated cost for free-market-determined dairy and poultry products (i.e., vs. non-supply management), amounting to $339 in 2014 dollars ($435 in current dollars). Higher-income households paid an additional 0.5 per cent of their income, or $554 annually in 2014 dollars ($712 today).

One of the pillars of the current system is production control, enforced by production quotas for every dairy farm. These quotas only gradually rise annually, despite abundant production capacity. As a result, millions of litres of milk are dumped in some years, according to a 2022 article by the Montreal Economic Institute.

Beyond production control, minimum price enforcement further entrenches inefficiency. Prices are set based on estimated production costs rather than market forces, keeping consumer costs high and limiting competition.

Import restrictions are the final pillar. They ensure foreign producers do not undercut domestic ones. Jaime Castaneda, executive vice-president of the U.S. National Milk Producers Federation, complained that the official 2.86 per cent non-tariffed Canadian import limit was not reached due to non-tariff barriers. Canadian tariffs of over 250 per cent apply to imports exceeding quotas from the European Union, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, and the Canada-United States-Mexico Agreement (CUSMA, or USMCA).

Dairy import protection obstructs efforts to reach more trade deals. Defending this system forces Canada to extend protection to foreign partners’ favoured industries. Affected sectors include several where Canada is competitive, such as machinery and devices, chemicals and plastics, and pharmaceuticals and medical products. This impedes efforts to increase non-U.S. exports of goods and services. Diverse and growing overseas exports are essential to reducing vulnerability to hostile U.S. trade policy.

It may require paying dairy farmers several billion dollars to transition from supply management—though this cartel-determined “market” value is dubious, as the current inflation-adjusted book value is much lower—but the cost to consumers and the economy is greater. New Zealand successfully evolved from a similar import-protected dairy industry into a vast global exporter. Canada must transform to excel. The current system limits Canada’s freedom to find greener pastures.

Ian Madsen is the Senior Policy Analyst at the Frontier Centre for Public Policy.

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Agriculture

Grain farmers warn Canadians that retaliatory tariffs against Trump, US will cause food prices to soar

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From LifeSiteNews

By Anthony Murdoch

 

One of Canada’s prominent agricultural advocacy groups warned that should the federal Liberal government impose counter-tariffs on the United States, it could make growing food more expensive and would be a nightmare for Canadian farmers and consumers.

According to Grain Growers of Canada (GGC) executive director Kyle Larkin, the cost of phosphate fertilizer, which Canada does not make, would shoot up should the Mark Carney Liberal government enact counter-tariffs to U.S. President Donald Trump’s.

Larkin said recently that there is no “domestic phosphate production here (in Canada), so we rely on imports, and the United States is our major supplier.”

“A 25% tariff on phosphate fertilizer definitely would have an impact on grain farmers,” he added.

According to Statistics Canada, from 2018 to 2023, Canada imported about 4.12 million tonnes of fertilizer from the United States. This amount included 1.46 million tonnes of monoammonium phosphates (MAP) as well as 92,027 tonnes of diammonium phosphate (DAP).

Also imported were 937,000 tonnes of urea, 310,158 tonnes of ammonium nitrate, and 518,232 tonnes of needed fertilizers that have both nitrogen and phosphorus.

According to Larkin, although most farmers have purchased their fertilizer for 2025, they would be in for a rough 2026 should the 25 percent tariffs on Canadian exports by the U.S. still stand.

Larkin noted how Canadian farmers are already facing “sky-high input costs and increased government regulations and taxation.”

He said the potential “tariff on fertilizer is a massive concern.”

Trump has routinely cited Canada’s lack of action on drug trafficking and border security as the main reasons for his punishing tariffs.

About three weeks ago, Trump announced he was giving Mexico and Canada a 30-day reprieve on 25 percent export tariffs for goods covered by the United States-Mexico-Canada Agreement (USMCA) on free trade.

However, Ontario Premier Doug Ford, despite the reprieve from Trump, later threatened to impose a 25 percent electricity surcharge on three American states. Ford, however, quickly stopped his planned electricity surcharge after Trump threatened a sharp increase on Canadian steel and aluminum in response to his threats.

As it stands, Canada has in place a 25 percent counter tariff on some $30 billion of U.S. goods.

It is not yet clear how new Prime Minister Mark Carney will respond to Trump’s tariffs. However, he may announce something after he calls the next election, which he is expected to do March 23.

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