Canadian producers need to focus on building resilience into their business to maintain or grow their operations in turbulent times.

That according to Farm Credit Canada (FCC) Chief Agricultural Economist J.P. Gervais.

“Trade tensions make headlines and are on top of mind for many producers, but it is the resulting movements in interest rates, the value of the Canadian dollar and commodity prices that make up the outlooks for various sectors of Canada’s farm economy,” said Gervais, who has launched his latest series of outlooks for the agriculture and agri-food sector.

He notes previous years of record-high production boosted global stocks of many agriculture commodities and helped to lower commodity prices, adding global consumption continued to trend upward and stocks started to fall.

Now trade tensions are disrupting commodity markets.

“Change is constant in this industry, so producers need to be in a position to take advantage of opportunities and address challenges as they arise,” Gervais said.

He adds one reason for optimism in this uncertain environment is that all sectors of Canadian agriculture face sound fundamentals: consumer food demand at home and abroad is still very robust.

“Being resilient means Canadian agriculture and agri-food businesses can quickly adjust to a dynamic operating environment that could last the rest of the year...We’re likely to see some fast-changing circumstances, including those that are both beneficial or potentially risky to their operations.”

Interest rates are expected to increase again in the latter half of 2018, while the dollar, fuel and fertilizer costs are expected to stabilize.

Gervais offered the following tips to build resilience:

- Risk management – develop scenarios to determine your exposure to unfavourable financial trends (sudden rise in interest rates) or weather events - Execution – update your marketing plan to reflect the changing environment and resulting volatility and build crop plans to match emerging food preference trends- Strategy – keep an eye on your long-term objectives and think about the integration of the crop, marketing and financial plans

Gervais said the Canadian agriculture and agri-food sector has already proven resilient and most Canadian farms continue to be in a very good financial position