Farmscape for March 6, 2018
The Chief Economist with Farm Credit Canada is advising Canadian farmers to focus on improved efficiency and increased production of commodities in order to remain competitive.
Recent years of record-high production have boosted global stocks of many agricultural commodities and, even as the planted acreage of the major crops in the United States declines from the highs of 2012 to 2014, improvements in yields will result in continued growth in overall production.
J.P. Gervais, Farm Credit Canada's Chief Agricultural Economist, says that's why it's important for Canadian agriculture to invest in innovation that will enable continued growth in productivity.
Clip-J.P. Gervais-Farm Credit Canada:
There is no denying that we have a rising supply of agricultural commodities.
The good news is that demand has been so strong that we have not seen that big of an impact.
Yes, we have softer commodity prices than what we have in the past but here in Canada we've been shielded from that to some extent because of a lower Canadian dollar over recent years.
But overall we have a higher supply of commodities and I would say it's more of a volume driven market right now than a price driven market.
We've continued to increase farm income in Canada but that's on the back of rising production not necessarily driven by higher prices.
I think, despite the fact that ideally food demand in the world is going to remain really strong, ideally for us to continue to increase and support farm income, we're going to have to work at getting our productivity higher and increasing supply and working to remain competitive as well by lowering our costs.
Gervais says, if investments made on the farm raise productivity or reduce production costs, it puts the farm in a great position to be successful.
He says we don't want to lose sight of the fact that markets are gong to be moving forward with increasing supplies and that means making the investments that will maintain competitiveness in this environment.
For Farmscape.Ca, I'm Bruce Cochrane.
*Farmscape is a presentation of Sask Pork and Manitoba Pork