Farmscape for March 12, 2018
The Chief Economist with Farm Credit Canada says, despite increased global competition, the Canadian agriculture and agri-food sector is well positioned to remain profitable moving forward.
Farm Credit Canada has released its latest outlooks for the agriculture and agri-food sectors.
J.P. Gervais, Farm Credit Canada's Chief Economist, observes competitive pressures have been mounting as food suppliers around the world increase their output putting downward pressure on prices.
Clip-J.P. Gervais-Farm Credit Canada:
With rising supplies we did have commodity prices that, on average, if you look art where they are now compared to the five year average, most of the commodities would actually show a negative impact.
Prices are lower than the five than the five year average.
There are a few exceptions.
I would say hogs for example was one of those exceptions where prices are a little bit higher than the five year price but where ever you look, whether it's grains and oilseeds, cattle, pulses, we're below the five year average.
I think that speaks to the increasing production in a lot of different parts of the world so we have had lower prices.
I think prices would have been actually lower if it had not been for the strength of demand both here domestically as well as in foreign markets.
I think, yes, that consumer is more and more demanding but I do think that he's willing to purchase high quality product that we're selling and that's true as well for consumers in emerging markets more and more.
So I think the outlook is absolutely positive from a food demand standpoint.
It's just that we're competing against other suppliers that are increasing their supply of commodities at a really fast pace so we're going to have to compete in that market place.
With innovation and more efficient production, we're going to be able to be successful, I have no doubt.
Gervais encourages producers to maintain a focus on increased production and productivity.
He recommends investing in technologies that will lower costs and increase efficiency.
For Farmscape.Ca, I'm Bruce Cochrane.
*Farmscape is a presentation of Sask Pork and Manitoba Pork