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Proposed tax changes impede growth in grain farming sector

Press release

GUELPH, ON (September 1, 2017) – Ontario’s grain farmers are highly concerned about the proposed tax changes to private corporations.

While the government’s concerns appear to be focused on professional corporations, the proposed legislation encompasses all small business corporations, including family farm corporations. The impact of these changes would impede growth in the agricultural sector – an industry identified by the Advisory Council on Economic Growth (Dominic Barton) as a key sector for Canada to invest in and grow.

Watch now: Mark Brock, chair of Grain Farmers of Ontario, joins BNN to discuss why Finance Minister Bill Morneau's proposed tax changes will make bringing the next generation of farmers into the business a lot harder. Video on BNN.ca.

“One of the key concerns among our farmers is how the proposed changes will impact farm transfers to the next generation,” says Mark Brock, Chair of Grain Farmers of Ontario. “The changes would add complexity and uncertainty to the transfer process, particularly for young farmers, under 24 years of age, who are trying to establish themselves in the farm business.”

The time frame for implementation of these changes poses significant challenges for farms that are currently in the process of transferring farm businesses. For these farmers, critical decisions and business transformations will need to be completed before the end of this year in order to access the proposed one-time capital gains exemption in 2018.

“These tax changes will not only result in higher compliance costs but will also reduce the cash flow and cash reserves that farmers use to purchase new, innovative technology and to mitigate against future risk,” says Brock. “Investing in the family farm is essential for agricultural progress.”

Grain Farmers of Ontario has joined the Coalition for Small Business Tax Fairness and requests that the government take the time to work with industry to address any shortcomings in the tax policy affecting private corporations and consider the implications to agriculture and farmers before implementing the largest tax changes in 30 years.

Grain Farmers of Ontario

Grain Farmers of Ontario is the province’s largest commodity organization, representing Ontario’s 28,000 barley, corn, oat, soybean and wheat farmers. The crops they grow cover 6 million acres of farm land across the province, generate over $2.5 billion in farm gate receipts, result in over $9 billion in economic output and are responsible for over 40,000 jobs in the province.

Contact:

Mark Brock, Chair - 519-274-3297; cropper01@hotmail.com

Meghan Burke, Communications – 519 767-2773; mburke@gfo.ca

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Grain Market Commentary for October 12, 2017

Thursday, October 12, 2017

Commodity Period Price Weekly Movement
Corn CBOT December 3.49  06 cents
Soybeans CBOT November 9.92  34 cents
Wheat CBOT December 4.30  12 cents
Wheat Minn. December 6.12  02 cents
Wheat Kansas December 4.26  10 cents
Chicago Oats December 2.62  16 cents
Canadian $ December 0.8030  0.15 points

Harvest 2017 prices as of the close, October 12 are as follows: SWW @ $183.52/MT ($4.99/bu), HRW @ $192.67/MT ($5.24/bu), HRS @ $238.89/MT ($6.50/bu), SRW @ $188.09/MT ($5.12/bu).

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Market Trends Report for October-November 2017

Monday, October 16, 2017

It is that time of year again when combines are rolling. However, uneven weather in parts of the American corn belt and Ontario has delayed harvest. There is nothing particularly unusual about this as we have it every year. US crops are huge coming off the fields and the market will certainly be making further adjustments. The final determinant on yield will come in the January USDA report. However, the October USDA report released October 12th helped to re-focus the trajectory of grain prices as we head into the end of the 2017.

In the October 12th report USDA increased US national corn yield to 171.8 bushels per acre, an increase of 1.9 bushels per acre over their September estimate. This put 2017/2018-corn production at 14.28 billion bushels on the high-end of pre-report estimates. The USDA also pegged corn-ending stocks at 2.34 billion bushels, which was up 5 million bushels from their September estimate. This number was a bit of a surprise especially with which dry weather throughout the American Midwest the summer.

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USDA estimated soybean production to be at 4.431 billion bushels, which was a decrease from their September estimate. This was based on a .4 bushel/acre cut in US national yield down to 49.5 bushels per acre. However, the US soybean harvested acreage is at a record high of 89.5 million acres, which was up 1% from the USDA September estimate. The US domestic soybean ending stocks were also pegged at 430 million bushels, which was down 45 million bushels from their September estimate. This was generally looked at as bullish on report day and soybeans responded by going up $.26 a bushel. US domestic wheat stocks were set at 960 million bushels, which was 27 million bushels higher than their September estimate.

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