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Alberta

Stakes are high for farmers as 2022 crop shapes up to be most expensive in history

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CALGARY — The stakes are high as Canadian farmers take to the fields to plant 2022’s crop, which some are saying could find a place in the record books as “the most expensive ever.”

On her family’s farm northeast of Calgary near Acme, Alta., where she farms with her husband Matt, Sawyer already knows she’s going to need a better-than-average crop this year just to break even.

All of her input costs have surged since last year due to inflationary pressures, spiking energy costs, and the war in Ukraine. The price of fertilizer is more than double what it was last year, and the diesel used to power her farm equipment also costs nearly twice what it did last year at this time. 

But getting that above average crop could be a challenge. Last year, Sawyer’s farm was hit hard by the widespread drought that reduced crop yields across Western Canada and there are fears already that this could be another dry year.

“Most farmers, including us, saw a 30 per cent reduction in our yields, so we need to be able to have really good yields come out this year in order to pay for that,” she said. “But in our region, we’re already horribly dry, so we’re concerned.”

But it’s not all bad news. While the cost of everything from seed to herbicides to tractor tires has increased in 2022, so too have crop prices. Sawyer, for example, grows wheat, barley and canola — all of which are hot commodities right now due to supply pressures created by the Russia-Ukraine war and the aftermath of last year’s drought.

 “There’s a number of crops that are sitting at all-time highs, or near all-time highs,” said Jon Driedger, of Manitoba-based LeftField Commodity Research. “If you go back two years, the price of canola has doubled, almost tripled. Wheat’s higher than it’s been in 20 years, corn’s pushing up against a record high. It’s really across the board.”

In fact, Driedger said crop prices are high enough that any farmer able to produce a “normal-sized” yield should still be able to earn a sizable profit. But in addition to the dry conditions in Alberta, many farmers in Manitoba and eastern Saskatchewan have the opposite problem and haven’t even been able to get onto the land yet due to flooding and excess moisture.

The acres seeded by Canadian farmers this spring will not only be the most expensive in history, but in some ways, the riskiest as well, Driedger said.

“For those farms that are fortunate enough to harvest a normal crop or even better, it could be a great year. But there’ll be a lot of farms for whom that’s looking awfully precarious right now.”

Cornie Thiessen — general manager of ADAMA Canada, a Winnipeg-based company that sells crop protection products like fungicides, herbicides and insecticides — said some of these inputs have become significantly more expensive and harder to find due to supply-side factors like COVID-driven disruptions at manufacturing plants and shipping delays. But he added the war in Ukraine is also increasing demand for these products, as farmers get the message that this year, their work is more vital than ever.

“Very high crop prices change the economics for farmers of how much they invest to protect the crop,” Thiessen said. “With really high prices like we’re seeing right now, it sends a message to farmers that the world really needs your crop so you need to make it as big as possible. You need to spend more on fertilizer and herbicides to maximize those yields.”

Thiessen said 2022 will likely be the most expensive crop ever planted in Canada, and there’s a lot riding on it.

“For the individual farmer, certainly there is an opportunity to take advantage of these high prices, but it’s a bigger investment than before,” he said. “If the weather works against them and they have a poor crop, that’s where the downside risk comes in.”

“And for the world, to help alleviate concerns about food security, we really do need Canada to produce a great crop this year,” Thiessen added. “If Canada’s crop isn’t as strong as possible this year, it will further exacerbate concerns about food security.”

This report by The Canadian Press was first published May 20, 2022.

Amanda Stephenson, The Canadian Press

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Alberta

Calgary Stampede receives $10M from federal government to aid recovery from pandemic

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Calgary – The Calgary Stampede has received more than $10 million from the federal government to help it bounce back after last year’s event was scaled down due to the COVID-19 pandemic.

A report to the city this week showed the Stampede had an operating loss of $8.3 million in 2021.

Last year’s Stampede ran at half capacity because of COVID-19 public health measures and was cancelled all-together the year before.

Daniel Vandal, the federal minister for Prairies Economic Development Canada, says the money aims to support a full-scale Stampede to deliver the “authentic western experience” this year.

He says it would also help to reignite Alberta’s visitor economy.

The 2022 Stampede is set to run from July 8 to 17.

“Festivals large and small were hard hit during the pandemic,” Vandal said in a news release. “They are events where families and friends come together and take in the exciting atmosphere.

“The tourism industry is facing a strong comeback providing quality jobs across the country, showcasing stunning landscapes and offering exciting experiences right here in Alberta.”

The federal government also provided about $1.8 million for four other tourism projects in southern Alberta: Charmed Resorts, Cochrane Tourism Association, Heritage Park and Tourism Calgary.

This report by The Canadian Press was first published June 30, 2022.

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Alberta

Canopy Growth to exchange C$255.4M in notes for shares and a bit of cash

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SMITHS FALLS, Ont. — Canopy Growth Corp. has signed a deal to exchange C$255.4 million of its debt for shares and a little bit of cash.

Under the agreement with a limited number of noteholders, the cannabis company will acquire the 4.25 per cent unsecured convertible senior notes due in 2023 for about C$252.8 million in shares plus approximately C$3 million in cash for accrued and unpaid interest.

The price used to value the shares will be the volume-weighted average trading price on the Nasdaq Global Select Market for the 10 consecutive trading days beginning Thursday, subject to a floor price of US$2.50 and a maximum of US$3.50 per share.

Constellation Brands Inc., through its wholly-owned subsidiary Greenstar Canada Investment Limited Partnership, has agreed to swap half of the C$200 million in notes it holds under the deal.

The company, which is already Canopy’s largest shareholder, will receive a minimum of 21.9 million Canopy shares based on the floor price and a maximum of 30.7 million shares.

Constellation currently holds nearly 142.3 million Canopy shares, representing a 35.3 per cent stake in the company.,

This report by The Canadian Press was first published June 30, 2022.

Companies in this story: (TSX:WEED)

The Canadian Press

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