AGT was delisted from the TSX earlier in 2019, as Al-Katib moved to take the company private after 12 years of being publicly traded. Its new ownership group is comprised of Fairfax Financial Holdings owning 60 per cent of the shares, AGT with 28 and Point North Capital, 12. Al-Katib said he’s the largest single shareholder running the company.

Also earlier this year, AGT opened a new rail consolidation centre at Delisle, Sask., southwest of Saskatoon.

“It’s what we consider to be the largest processing unit for grains, maybe in the country,” Al-Katib said during his presentation Thursday.

All of AGT’s short-line rail traffic winds up in Delisle, where AGT has eight spurs of four kilometres each. The grain cleaning operation there can process a 10,000-tonne train in less than 12 hours, he explained.

“It cleans to less than 0.5 per cent foreign material,” Al-Katib said.

In adding up all of AGT’s rail lines, he said the company has become the third largest railway in Canada, behind only Canadian Pacific and Canadian National Railways.

The company’s Churchill port facility was put back into operation, a year after it and the rail line were acquired from its previous owners. Al-Katib said approximately 150,000 tonnes of grains were shipped through the port in 2019, with the goal 300,000 tonnes for 2020. In subsequent years, he wants Churchill’s capacity boosted to 500,000 tonnes per year.

“With icebreakers we can stretch Churchill’s shipping season from June to the end of November,” Al-Katib said.

Among the cargo vessels leaving the port were three loaded with durum and one with lentils, destined to the Port of Mersin in southern Turkey, a voyage that takes three weeks, he said.

The last of the four departed Churchill on Nov. 7, which Al-Katib said was very likely the latest a grain vessel left the northern Manitoba port.

“That was the day we were told if we didn’t pull out by three o’clock, we might not make the ice in the strait. We left at 11 in the morning,” he said.

— Glen Hallick reports for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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Geopolitics, he said, resulted in catastrophic global wars and generated very little peace for close to a century.

Shapiro, director of analysis for Geopolitical Futures — an Austin, Tex.-based international risk analysis think tank — said the concept of geopolitics held tremendous sway on world affairs from the turn of the 20th century to the end of the Cold War.

During the following 20 years, he said, the western world had high hopes for liberal democracies to pop up all over the globe, but such were dashed following the 9/11 terrorist attacks.

“The United States, as it does, completely overreacts to 9/11. The United States really has trouble functioning in the world when it doesn’t have an enemy that it can focus on. Jihadism was just the perfect enemy,” Shapiro said during the lead-off forum at Grain World.

A few years later, Russia re-imposed itself on the global stage with its invasion of Georgia, an independent country that had been one of the republics of the former Soviet Union. Shapiro said Russia’s aggression clearly demonstrated the extent of how unwilling the U.S. was to steadfastly defend Georgia. And that played directly into the hands of Russian President Vladimir Putin and his long-term goal of destabilizing relations between the U.S. and its allies.

Then, a few more years down the road, came the rise of Chinese President Xi Jinping.

“China has had really three world historical figures in its last 100 years. The first was Mao Zedong, he reunited China. The second was Deng Xiaoping, he made China rich. Xi Jinping is here to make China strong,” Shapiro said.

When Xi met U.S. President Donald Trump in Florida, Trump spouted to Xi of how trade relations between their countries were now going to operate from now on, Shapiro said.

With the legacy of Mao and Deng deeply engrained in Xi’s psyche, he would have compared Trump’s bluster to how China was destabilized and carved up, first by the United Kingdom and then other imperial powers for the next 100 years. With that ‘century of humiliation’ in mind, Shapiro said, Xi was determined not to permit such a history repeat itself.

“There may be a cosmetic short-term trade deal in the offing, but the United States and China are locked in a long-term strategic competition,” Shapiro said.

“The U.S. isn’t going to give up on it. China isn’t going to give up on it. Their trade war is just the beginning. There’s no end to this really in sight.”

However, despite China’s tremendous economic and political growth over the last 40 years, it has brought severe consequences as well, he said. China was once a country that didn’t need to import oil, being completely self-sufficient. Today, it’s the world’s largest importer of oil.

The case has been the same for food, which has led China to refocus its policy. Rather than striving for food self-sufficiency, China opted to exercise its might toward food security. And that was something which resulted in Canada feeling China’s wrath following the arrest of Huawei executive Meng Wanzhou about a year ago, Shapiro said.

“For China this is geopolitical, this isn’t import/export. China identified you were an unreliable political partner and went forward accordingly.”

With that in mind, Shapiro expressed his professional opinion that, “it would be a colossal mistake” for a country or a business to have China at the centre of its future growth strategy.

“China, and access specifically to the Chinese market, should not be the core of your business,” Shapiro said. “You need to get used to the thinking of what you can sell to China as a bonus, not as the core of what you’re doing.”

Rather, countries and businesses need to turn to India, which he believes will explode on the world scene such as China did during the 1980s. However, he warned not to treat India as an unequal partner, as Trump was said to have done to Indian Prime Minister Narendra Modi during his recent visit to Texas.

The U.S. and India were to have signed a trade agreement, but despite all of the hoopla surrounding Modi’s visit, he allegedly refused to do so. Shapiro said agreements need to be mutually beneficial, not one-sided.

— Glen Hallick reports for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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Two experts on the subject, Adrienne Ehrhardt of Michael Best and Friedrich and Doug Tait of Thompson Dorfman Sweatman spoke about the importance of cyber security on farms at last week’s Grain World conference in Winnipeg.

“With all of the technology that’s floating around there are a lot of threats out there that most people haven’t considered,” Ehrhardt said.

Tait said the myriad of Internet of Things (IOT) devices, of which there are a total of 23 billion connected around the world, are increasing at a rapid rate. He said the total number of IOT’s is expected more than triple by 2025.

“In the agriculture sector alone it’s experiencing an IOT growth rate of 20 per cent compounded yearly and by 2025 there will be an estimated 224 million devices,” he said.

Tait said the data that can be gleaned from agriculture can be very valuable to not only other industries, but also to “the bad guys.” He added the more devices there are the more vulnerable farmers can be.

One simple preventative measure, Tait said, producers can take is changing the passwords on their IOT devices. Too often the password on countless devices is ‘admin’ and that makes it extremely vulnerable.

Both experts strongly suggested producers come with pass phrases that are unique to them rather than relying on defaults or generic passwords. Tait said there is a database on the ‘Darknet’ that contains approximately 50 million passwords that have been used nefariously to get into systems.

“People today are still using ‘123456’ or some password that is very easily guessable,” he said.

Ehrhardt said cyber security is not only about data theft but also data manipulation and that she said can result in crops dying.

And of course there can be financial losses due to phishing attacks in which people unknowingly give up sensitive information.

She suggested people “go old school” when dealing with large financial transactions by speaking over the phone to the person who is to receive the money, to verify the transaction has been completed correctly.

Also, Ehrhardt said, producers need incident response plans when they have incurred a cyber-attack, such as having your data backed up, having an IT expert to call and having a process to determine when and where the breach occurred.

“The same types of risk mitigation in other industries can be borrowed or applied to the ag sector as well,” she said.

While there is cyber insurance, Tait pointed out that industry is something of a “wild West.”

“The plans differ significantly, so when you’re looking at cyber insurance make sure you get a very trusted insurance advisor or a lawyer to look over the language. The language between policies may have the same words but they may not mean the same thing,” he said.

— Glen Hallick writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.

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Jonathon Driedger and Neil Townsend, both with FarmLink Marketing Solutions, gave their thoughts about the global markets for wheat, durum, feed barley and oats Wednesday at the Grain World conference in Winnipeg.

Citing numbers from the U.S. Department of Agriculture, Townsend said about 734 million tonnes of wheat were produced globally this year, down 30 million from 2017.

This is a positive for prices, he said, as world consumption has been increasing by 1.5 to two per cent per year, leading to greater demand.

“The distribution this year is somewhat favourable in the sense most of the eight major exporting countries are going to be running down their stocks a little bit,” Townsend said.

The U.S. has become the world’s residual for wheat, filling in the holes left by other suppliers such as those in Europe and Asia, Driedger commented.

“The rising prominence of Russia, Ukraine, Kazakhstan and some of these other countries in terms of world wheat export markets, obviously they have taken larger chunks of that market share,” he said.

Townsend said Canada “should be faring pretty good” with its wheat exports (excluding durum) at 18.5 million tonnes according to FarmLink estimates, which he said was one of the bigger amounts in the last five years.

The Russians, he stated, “have kind of blown their brains out” with the speed they ship their exports even though their production is down.

“I wouldn’t sit here and say a 70 million (tonne) crop is a disappointment for the Russians, but it’s not what they did last year. It’s down by about 15 million tonnes. They have been exporting like they have the same kind of supply,” Townsend said.

This should result in Russian exports not being very active from December onward, he added.

Australia’s wheat crop will be small, he said, given the country is contending with a drought and this could generate buying interest for Canadian wheat.

Driedger said Canada’s wheat crop held up very well this year quality- and quantity-wise under difficult growing conditions, “certainly nothing near the disaster that was potentially feared for that wheat left out in the field,” he said.

For 2019, Driedger expects there will be more spring wheat seeded in Western Canada, especially with the new varieties.

“Their really impressive yields and their quality attributes are such that you don’t get that much of a discount,” he said.

As for prices, Driedger said the wheat futures are currently heavy.

“It’s like everybody is waiting and waiting for this export volume that’s not showing up. Somewhere along the line we have a lot of catching up to do and the longer we have catching up to do, the narrower that window is to kind of make up those volumes,” he said, and expects any improvement for producers could come on the basis side.

Next up was durum, which Townsend said is suffering from supply and demand issues. He said there hasn’t been a lot of expansion of the world durum market, resulting in the demand for it being flat while too many acres are used for durum production.

“Through 14 weeks, according to the Canadian Grain Commission, we’ve exported 841,000 tonnes of durum. That’s down 19 per cent year on year and the five-year average is almost 300,000 tonnes higher,” he commented.

One opportunity to increase exports, Townsend said, would be the feed market.

“It’s not the opportunity you want when you’re sitting on a lot of No. 1,” he said.

Townsend noted wheat prices in the U.S. have nosedived and producers are hanging onto their durum hoping for better prices in the future.

Townsend said Saudi Arabia is the dominant barley buyer, especially for feed. Despite barley production being down in Canada, so was barley production in Europe and along the Black Sea region; that, he said, could benefit Canada.

There could be opportunities for feed barley and feed wheat in Western Canada and perhaps Australia, Driedger said. Should these occur, he said they could lead to improvements in prices.

Townsend also pointed to Canadian oats, which, despite challenges imposed by the weather, still turned out pretty good. In Europe, oats didn’t fare as well.

He noted Canada doesn’t have phyto clearance with China for oats, and it should be something to acquire as the Chinese market is quickly growing.

“Of the food sectors in China that are expanding, the fastest are the convenience cereal (and) the convenience meal you can eat when you’re commuting on the subway,” he said.

— Glen Hallick writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity reporting.

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However, those two customers have different needs which can also create some challenges, said industry officials speaking Tuesday at the annual Grain World conference in Winnipeg.

Lorelle Selinger, North American supply chain manager with Cargill Malt, and Peter Watts, managing director of the Canadian Malting Barley Technical Centre, gave a joint presentation on the industry that highlighted two key trends.

China, the world’s largest beer maker, is seeing a shift from low-quality beer to higher-quality beer, which also necessitates a shift to higher-quality barley, which is good for Canada.

At the same time, North America is seeing an explosion in the craft beer sector. While craft beer still only represents a small portion of the total beer sold in North America, the beer uses three to four times more malt per unit.

“Our single largest export market for malt barley is China,” said Watts, noting the country imported about 1.3 million tonnes of Canadian malt barley in 2017-18 and was set to increase that level going forward.

Brewers serving the Chinese market “are seeing a shift to more premium beers,” said Watts, noting that also means a need for higher-quality barley.

“China is a very important customer, and we have to keep them happy and make sure our varieties meet their needs,” Selinger said.

The ideal protein levels for most North American maltsters are in the 11 to 11.5 per cent range, according to Selinger. However, China is looking for protein in the 12.8 to 13 per cent range.

“For farmers, that’s a good thing,” said Selinger, “because it allows selections of malt barley in a much wider range of protein increments and allows us to adapt on a year-to-year basis.

“Adversely, the craft industry is pushing for lower protein,” she added.

With a vast growing region, Canada can supply both markets and deliver specifications to meet both demands, but newer varieties face challenges to gain acceptance from end users.

“Brewers can be pretty conservative,” said Watts, noting it can take a while to transition to new varieties.

Looking ahead to 2020, Watts showed data forecasting relatively steady beer production in the U.S. compared to 2015, with craft beer rising from 29.1 million hectolitres to 39 million, while non-craft beer declines from 194.5 million to 183.9 million hectolitres.

However, due to the increased malt usage in craft beer production, the total U.S. malt demand will grow from 2.014 million tonnes in 2015 to 2.211 million tonnes in 2020.

While North Americans may not be drinking any more beer, “the value of the industry continues to rise,” said Watts.

“Even though the total beer consumption in North America hasn’t been increasing, the total amount of malting barley needed has,” said Selinger.

However, acres seeded to barley are in a downtrend, which also makes it important to have improved higher-yielding varieties.

— Phil Franz-Warkentin writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting. Follow him at @PhilFW on Twitter.

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The inaugural Grain World crop tour, organized by FarmLink Marketing Solutions, toured the Prairie provinces on Tuesday and Wednesday.

Moisture conditions vary widely across the Prairies, resulting in highly variable crops, the tour found.

“We saw some short (crops), tall ones, thin ones, fat ones,” said FarmLink senior market analyst Neil Townsend. “But we didn’t see much that would measure out as a disaster.”

FarmLink is an advisory service for farmers.

The crop tour estimated an average Canadian wheat yield, excluding durum, of 54.4 bushels per acre in the 2018-19 crop marketing year, up from the previous year’s 53.8 bushels, and surpassing the five-year average. Durum yields also looked bigger, rising to an estimated 39.01 bushels per acre from 35.3 bushels, but falling short of the five-year average.

Spring wheat yield prospects in northern North Dakota are better than a year ago but lag the five-year average, scouts on the second day of an annual U.S. crop tour said on Wednesday.

The Grain World tour estimated an average Canadian canola yield of 41.9 bushels per acre in 2018-19, up from 41.1 bushels a year earlier and larger than the five-year average.

The tour yield estimate is a “game-changer” for canola, changing sentiment from bullish about supply and demand to a key question of how much canola China will buy, Townsend said.

Wheat and canola looked lush in Manitoba, but in Alberta, canola was so immature that scouts could not count pods, Townsend said. In general, crops need rain, and soil moisture is insufficient, he said.

Two crop futures traders who were not on the tour said the results looked bearish.

ICE Canada November canola futures were up 0.6 per cent, but pared their gains slightly after the tour estimates were released.

Much of southern Alberta and central Saskatchewan has received well below normal rainfall in the past month, while most of Manitoba’s growing area has received roughly average amounts, according to Agriculture and Agri-Food Canada.

Statistics Canada is scheduled to report its first estimates this year of crop yields and production next month, using a farmer survey.

— Rod Nickel is a Reuters correspondent covering the agriculture and mining sectors from Winnipeg.

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“You have to be able to see the deals to make the best decisions. So without all the deals in front of you in a centralized system I don’t know how it’s possible to go to bed at night knowing you have the best price,” he said during the What Technology Can We Expect in the Next 3-5 Year? panel at Grain World in Winnipeg, Nov. 15.

Ehrmantraut is president and CEO of Ag Exchange Group, which has an online grain marketing service, CXN360 that connects producers with buyers directly to sell grain.

Ehrmantraut has witnessed firsthand how the grain industry has changed having grown up in the rural community of Torquay, Sask. His father was a farmer and would drive his grain down the road a quarter of a mile to the elevator.

The number of elevators in Western Canada has gone down over the last three decades. In the 1980s there was almost 3,000 elevators dotting the Prairies as to now there is just under 350.

“I think the world’s changed a little bit in that sense, as a farm I’m not sure how it’s possible for them to get (to all the elevators in western Canada),” Ehrmantraut said.

This is where technology steps in. For years it was the traditional, farm to elevator to port shipping process. There would be countless phone calls to find out information on both the producer and the elevator side, and in the end the information would sometimes be out of date by the time it got to the end of the line.

“That’s where we think technology would to some degree can step in and help us communicate more efficiently and also you know have a buying contract at the end of it,” Ehrmantraut said.

With technology, like Ehrmantraut’s CXN360 program, producers can now have access to the whole market, and therefore have a clear transparency of where they’re selling their grain.

“(By) sending out target prices to one buyer at a time, versus using technology that’s targeted to every buyer out there in the market, the only (way) for ground pricing is through straight transparency,” he said.

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For several years, Canada has been the main exporter of flax to China but that could likely change if Kazakhstan ever has a direct link to the China.

“We thought the Chinese market was ours, but now we could see both Russian and Kazak flax moving into China,” said Chuck Penner of Leftfield Commodity Research.

Speaking at the Grain World Conference in Winnipeg on November 15, Penner said the logistical barriers that had prevented Kazakhstan flax from getting to China were falling with construction of the new trade route.

China says it’s willing to spend as much as US$1.2 trillion to make the road a reality. It would involve clearing jungle, drilling through rock and constructing hundreds of bridges and other support structures. There’s no firm time-table on when it would be completed, but the political willingness appears to be there.

Penner says when it’s done it will become very simple to see who makes the most sense for China to import from.

“When you look at a map Kazakhstan is a heckuva lot closer to Chinese markets than Canada is,” he said.

Flax too, is facing stiff competition for acreage in Canada as pricier crops like canola take centre stage.

In 2015, Canada produced 942,300 tonnes of flax but In 2017 that number fell to 501,200 tonnes, according to Statistics Canada.

The price for flax in Saskatchewan, where roughly 80 percent of it is grown, was between C$11.50 to C$12.50 a bushel, according to the Prairie Ag Hot Wire. A year ago it was locked in a wider range of C$10.50 to C$13.00 a bushel.

Penner says creating value for flax domestically could be the key to moving forward once the silk road is built.

“We can add value domestically, talk about sustainable flooring, paint, all kind of things, there’s an opportunity to market to millennials,“ he noted.

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“Guys with space are winning,” said Kurt Ahrens, founder of Grainbot in Omaha, Nebraska.

Speaking at the Grain World Conference in Winnipeg, he pointed out that storage capacity utilization in the United States last year was record high. That caused many to offer cash purchases only or deferred pricing contracts.

Ahrens says many have started to play both sides of the market too.

“Once they own the grain at harvest there’s likely to be a large carry in the market,” he said.

Ahrens says anytime the carry in is over 2.2 billion or 2.3 billion bushels in the U.S., storage companies will make money.

“But when it’s one million or below, they won’t likely make money carrying it but they can make money trading it,” he explained.

Ahrens thinks wheat is the commodity that will get carried the most, as it is the most abundant.

He says farmers in Iowa may not want to invest in storage facilities, because they are flooded with corn and soybeans, both of which are moving quicker than wheat.

“Like in Kansas, wheat is very common right now. If you have a big bin, you can take advantage of the carry year over year,” he said.

At the same time, he says there will likely be some advantages for almost everyone if they can store their crop.

“I think storage will be a very good investment. I think it will outpace the return on land-investment in many parts.”

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“We have been, we are, and we will continue to be a largely fossil fuel civilization,” said Smil adding “The idea that this will change by next month, by next year, or by the next decade is totally ridiculous.”

The problem with replacing fossil fuels is largely a matter of scale, according to Smil who spared little in his wide ranging talk that touched on everything from container ships moving “junk from Asia,” the failings of electric-car maker Tesla, typhoons hitting Tokyo, cold Winnipeg winters, and even soil compaction.

From 1950 to 2016 fossil fuels have gone from comprising 98.4 per cent of the world’s energy use to 90.3 per cent, although actual usage still rose dramatically due to increased energy demand overall, according to Smil.

While solar power, wind power, and renewable fuels are all seeing some growth, they still represent less than five per cent of the total world energy use. Smil pointed to historical growth patterns of other energy sources such as coal, oil, and natural gas, showing that each took decades to see their share of total energy usage rise, with each subsequent energy transition slower than the one that came before.

In addition to the generally slow pace of adoption of newer energy sources, Smil also pointed to a number of key fossil fuel uses that have no real viable replacement at present. As examples, the diesel to run ocean freighters, jet fuel for airplanes, coal to create steel, and natural gas to create nitrogen fertilizer are all not close to being replaced by renewable energy, with improvements to current technology by three to four orders of magnitude needed before renewables could replace fossil fuels.

As the sun does not always shine and the wind does not always blow, battery storage capacity also has a long way to go before batteries will be able to meet the demand. In addition, those batteries still need to be created using predominantly fossil fuels.

A combination of pollution concerns and lack of efficiencies will eventually see fossil fuels replaced by cleaner alternatives, “but it will be generations,” said Smil adding that there are many people “waiting in line to burn fossil fuels.”

Infrastructure, even ‘green’ infrastructure, requires steel and concrete, which for now means fossil fuels, said Smil noting that the pace of development seen in China in recent years will soon be replicated in India and then Africa.

With fossil fuel dependence a long term prospect, the only real short-term solutions would be cuts to energy usage by more affluent countries. Currently, Canada sits near the top of the world’s energy consumers, with a per-capita annual energy demand of 350 gigajoules, according to Smil. China, by comparison, sits at 90, India at 20, and Ethiopia at only 2 gigajoules per-capita. Those countries at the lower end of the scale are all looking to move up.

“There are a lot of people waiting in line to burn those dirty fossil fuels, because we have done it and this is how we have become rich and affluent, and how we can afford our standard of living.”

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