Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52 Page 53 Page 54 Page 55 Page 56 Page 57 Page 58 Page 59 Page 6032 Here, industry experts will discuss issues that are top of mind, share technical advancements and talk about tips for success. ADVICE FROM INDUSTRY EXPERTS IN 2015, total farm liabilities increased at a faster pace than asset values for the first time in more than five years. Farm debt rose 8.9 per cent to $86.8 billion, while asset appreciation slowed to 6.2 per cent. Statistics Canada’s latest Balance Sheet of the Agricultural Sector signals a softening in an otherwise healthy farm economy. When evaluating the health of the ag sector, we look at three ratios: liquidity, solvency and profitability. These can also be used to benchmark individual operations. 1. Liquidity. This indicates our ability to meet financial obligations. A widely accepted ratio is the cur- rent ratio. It compares current assets (cash, accounts receivable and inven- tory) to current liabilities. In 2015, the current ratio decreased from 263 per cent to 238 per cent, its lowest point since 2009. The five-year average is BUSINESS & FINANCE 3 RATIOS FOR ASSESSING AGRICULTURE'S BALANCE SHEET Craig Klemmer Farm Credit Canada Senior Agricultural Economist @CraigKlemmer fcc-fac.ca AS SOMEONE who works with end users to find new opportunities for specific varieties, I welcome the Canadian Grain Commission’s efforts to modernize the wheat classes. Naturally, plant breeders have been bringing new varieties forward, and not all fall within the traditional parameters; some have different qualities or serve a unique purpose. We’ve been operating with 10 wheat classes in Western Canada, and there have been some concerns about the variability in milling per- formance, dough strength, protein quality and end-product quality in the CWRS class. To address those concerns, new check varieties have been set to ensure greater predictability and uniformity in the variety registration process, while guaranteeing greater Brent Derkatch CANTERRA SEEDS Director, Operations & Business Development @CANTERRABD b.derkatch@canterra.com canterra.com CEREAL SEED WHEAT: A CHANGING WORLD 264 per cent. This means farmers are in a weaker position to meet short-term financial commitments. 2. Solvency. The debt-to-asset ratio indicates if a farm has sufficient assets to cover all liabilities. In 2015, total farm debt increased faster than total farm assets. As a result, the ratio crept up; but is historically low at 15.5 per cent, compared to the prior five-year (15.9) and 10-year (16.5) averages. 3. Profitability. Return on assets indicates how profitable a farm is relative to its total assets. This is calculated by comparing net income to total farm assets. In 2015, record net income increased the profitability ratio to 2.3 per cent from 2014’s 2 per cent; however, this is below the 3.9 per cent in 2013. Farms appear to be achieving a slightly lower return on the value of their assets. Overall, these ratios tell me that agriculture is strong, but liabilities are increasing faster than asset values. This softens overall farm health and signals a bit of caution moving forward. How does your operation stack up? Explore the numbers with the Outlook for Farm Assets and Debt 2016-17 report, available at www.fcc.ca/FarmAssetsReport. consistency. The new check varieties are Glenn, Carberry and AAC Viewfield for the Central and Western Trials. Splendor remains as a mid-level check variety for the Parkland Trials, and Glenn, PT772 and PT472 have been added. These changes raise the floor for gluten strength. From these new parameters, 25 CWRS varieties were designated to transition to another wheat class, the new Canada Northern Hard Red Class, as they don’t meet the revised parameters. The effective date is now Aug. 1, 2018. It’s possible that these changes might not seem favourable if you own one of the varieties desig- nated to move. However, if you look at the bigger picture for the Canadian wheat and cereal industry, you can’t put a price tag on being able to guaran- tee high-quality grain for a specific end-use. It is better for our domestic customers and international markets and will ensure that we keep customers coming back to Canada for high quality wheat.