Farmscape for February 3, 2020
The Chief Agricultural Economist with Farm Credit Canada is advising Canadian agriculture sector stakeholders to pay close attention to developments on the global trade front during 2020.
Farm Credit Canada has identified global trade tensions as one of three key factors that have the potential to shape Canada’s agriculture and food industry outlook in 2020.
J.P. Gervais, FCC’s Chief Agricultural Economist, notes, while 2019 ended with a tentative phase one trade deal between the U.S. and China, Canada is still dealing with its own tensions with China, India and Italy.
Clip-J.P. Gervais-Farm Credit Canada:
The effect of trade tensions is significant.
There's no doubt.
We export more than 50 percent of our primary production in one way or the other, whether we export it in raw form or whether we export it in processed food products so export markets are a big deal.
I do think that the tensions are still ongoing when it comes to Canada and some of the bigger partners that we have like China and India.
That's one thing to monitor, whether this is going to get resolved in 2020 and, if it does, I think it opens up possibilities for Canadian farms.
Second is the tensions that involve other countries, most specifically China and the U.S. with these two being so significant in terms of their market share.
Both of them have a lot of potential impact in the market place.
If they do resolve some of their differences, I would expect North American prices of commodities to go up.
A third one that I would argue is the impact of all disruptions that we're talking about on the overall economic outlook of the different partners that Canada has that buy Canadian ag commodities and food.
In that case I think the outlook remains fairly positive on average.
Gervais says despite all the chatter in 2019 about a global economic slowdown, which we have seen to some extent, the outlook for 2020 appears reassuring, in the sense that we're going to continue to see the world economy grow.
That, he says, is good for growth in food demand and that's good for Canadian exports.
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