Voluntary Report - public distribution

**Date:** 12/9/2005

**GAIN Report Number:** CA5084

CA5084

**Canada**

**Agricultural Situation**

**This Week in Canadian Agriculture, Issue 41**

**2005**

**Approved by:**

![](media/image1.wmf)Lisa Anderson

U.S. Embassy

**Prepared by:**

Christina Patterson and George Myles

**Report Highlights:**

\* Stats Canada Releases Production Estimates for 2005 \* Canola
Production Wows Industry \* Barley and Oat Production Falls \* Mandatory
Nutrition Labeling Regulations Go Into Effect Next Week \* Only the
Largest Farms Do Not Rely on Off-Farm Income

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Ottawa \[CA1\]

\[CA\]

This Week in Canadian Agriculture is a weekly review of Canadian
agricultural industry developments of interest to the U.S. agricultural
community. The issues summarized in this report cover a wide range of
subject matter obtained from Canadian press reports, government press
releases, and host country agricultural officials and representatives.

*Disclaimer*: Any press report summaries in this report are included to
bring U.S. readership closer to the pulse of Canadian developments in
agriculture. In no way do the views and opinions of these sources
reflect USDA's, the U.S. Embassy's, or any other U.S. Government
agency's point of view or official policy.

**STATS CANADA RELEASES PRODUCTION ESTIMATES FOR 2005**: According to
Statistics Canada, wheat, corn, and flax production increased above
2004's production levels. Total wheat production jumped 3.5% in 2005 to
26.775 million metric tons (MMT) from 2004. Increases in production in
Alberta and Saskatchewan helped offset a decline in wheat production in
Manitoba. Durum production increased by approximately 19% to 5.9 MMT
over 2004 production, due to increased harvested acreage and higher
yields. Higher corn yields in Ontario helped drive total Canadian corn
production roughly 8% higher to 9.5 MMT in 2005. Corn production in
Quebec remained unchanged from 2004. Although not a large contributor to
overall corn production in Canada and despite challenging weather
conditions, Manitoba's corn production is now estimated at nearly
211,500 metric tons (MT), well above 2004's weather-damaged 17,800-ton
crop. Flax production increased 109% to 1.082 MMT over 2004, but not as
high as originally forecast. Production was originally forecast to hit
1.1 MMT. Poor growing and harvest conditions hurt the flax crop.

**CANOLA PRODUCTION WOWS INDUSTRY**: According Statistics Canada, canola
production is pegged at 9.660 MMT, 25% higher than 2004 production and
well above the previous record of 8.798 MMT set in 1999. The dramatic
increase in production is a result of increased harvested acreage and
record yields. Saskatchewan and Alberta both reported significant
increases in production, which more than offset production decline in
Manitoba. The record crop is also expected to result in record carry out
stocks, as crush is already running at capacity and exports have been
slow to date. Many estimates had pegged the canola crop to be any where
from 8.6 MMT to 9.2 MMT.

**BARLEY AND OAT PRODUCTION FALLS**: According Statistics Canada, in a
season of record production, barley and oat production both fell. Barley
production dropped 5.3% to 12.481 MMT from 2004 production, due to a
decline in production in both Alberta and Manitoba, that was in turn due
to lower harvested acreage and lower yields. Oat production fell 6.8% to
3.43 MMT from 2004, as a result of lower yields. The poor weather
conditions in Manitoba severely impacted its oat crop.

**MANDATORY NUTRITION LABELING REGULATIONS GO INTO EFFECT NEXT WEEK:**
On December 12, 2005, Canada will implement its new mandatory nutrition
labeling regulations for prepackaged foods sold at retail. Health
Canada\'s amendments to the Food and Drug Regulations for nutrition
labeling, nutrition claims and diet-related health claims will be
enforced by the Canadian Food Inspection Agency (CFIA). Small food
manufacturers, domestic and foreign, will be given an additional two
years to comply. U.S. food manufacturers and exporters who are exporting
product to Canada must bring their label into compliance. The U.S.
nutrition facts label is not permitted in Canada. While there is a
potential for compliance-related trade problems during the transition to
mandatory nutrition labeling, the CFIA will principally focus its
efforts on helping industry understand and apply the regulations
appropriately. It will primarily be looking to implement the new
regulations through an educational approach. Foods that are mislabeled
in such a way as to cause potential health and safety risks (e.g.,
undeclared sodium levels, foods with misleading nutrient content, health
claims) will be treated with the appropriate level of enforcement
actions. According to the CFIA, a staged compliance approach will
initially focus on the presence of the nutrition facts table, the
provision of mandatory information and the appropriate use of claims.
Non-compliant imported food already in the country and on grocery
shelves will be allowed a reasonable amount of time to work its way
through the system. For more information on the new nutrition labeling
rules, U.S. exporters are encouraged to consult the following CFIA
webpage and download the Nutrition Labeling Toolkit:
http://www.inspection.gc.ca/english/fssa/labeti/nutrition-pagee.shtml

**ONLY THE LARGEST FARMS DO NOT RELY ON OFF-FARM INCOME:** According to
Statistics Canada, only the very largest Canadian farms (with revenues
of C\$500,000 and over) do not rely on off-farm income for the major
portion of their total family income. The proportion of these families\'
annual incomes from off-farm sources has remained relatively stable,
ranging between 25.9% and 33.5% since 1990. Families operating small
farms, that is, those with revenues from C\$10,000 to C\$49,999, have
consistently relied on off-farm sources for most of their total income.
Between 1990 and 2003, the percentage of total income from off-farm
sources ranged from 87.1% to 92.6%. Families operating medium-size farms
(with revenues from C\$50,000 to C\$99,999) have also relied on off-farm
sources for most of their total income. From 1990 to 2003, medium-size
farms have grown increasingly reliant on off-farm income. Off-farm
income, which represented 66.3% of the total income of these families
in 1990, grew to 90.0% by 2003. For families with large farm operations
(annual revenues from \$100,000 to \$499,999), the portion of total
income from off-farm sources has also grown steadily. In 1990, 37.3% of
income came from off-farm sources. By 2003, 52.1% of total income came
from off-farm sources.

Find FAS on the World Wide Web:

Visit our headquarters' home page at
[http://www.fas.usda.gov](http://www.fas.usda.gov/) for a complete
listing of FAS' worldwide agricultural reporting.

# 

# Recent Reports from FAS/Ottawa: 

+----------------+---------------------------------------+------------+
| Report Number  | Title of Report                       | Date       |
+----------------+---------------------------------------+------------+
| ### CA5082     | This Week in Canadian Agriculture,    | 12/02/2005 |
|                | Issue 40                              |            |
+----------------+---------------------------------------+------------+
| ### CA5081     | This Week in Canadian Agriculture,    | 11/25/2005 |
|                | Issue 39                              |            |
+----------------+---------------------------------------+------------+
| ### CA5080     | Retail Sector Report                  | 11/25/2005 |
+----------------+---------------------------------------+------------+
| ### CA5079     | Export Certificate Report             | 11/23/2005 |
+----------------+---------------------------------------+------------+
| CA5077         | Exporter Guide                        | 11/22/2005 |
+----------------+---------------------------------------+------------+
| CA5073         | Dairy Annual                          | 11/21/2005 |
+----------------+---------------------------------------+------------+
| CA5078         | This Week in Canadian Agriculture,    | 11/18/2005 |
|                | Issue 38                              |            |
+----------------+---------------------------------------+------------+
| CA5076         | This Week in Canadian Agriculture,    | 11/07/2005 |
|                | Issue 37                              |            |
+----------------+---------------------------------------+------------+
| CA5070         | Frozen Potato Products Annual         | 10/25/2005 |
+----------------+---------------------------------------+------------+

VISIT OUR WEBSITE: The FAS/Ottawa website is now accessible through the
U.S. Embassy homepage. To view the website, log onto
[http://www.usembassycanada.gov](http://www.usembassycanada.gov/); click
on Embassy Ottawa offices, then Foreign Agricultural Service. The
FAS/Ottawa office can be reached via e-mail at: <agottawa@usda.gov>