Producers taking part in FCC’s Ag Outlook learned more about some of the factors influencing the ag sector today.
FCC’S Chief Agricultural Economist JP Gervais says there’s a variety of things to watch from what’s happening with oil to the global market place, the Canadian dollar and commodity markets.
He says growing supply is the overall theme when it comes to the markets, whether its crops or livestock:
"Pretty much all of the commodities in production growth and exceeding consumption growth so that puts pressure on commodity prices, for sure," he said.
"I would say in terms of livestock, it is pretty much the same story. We have tremendous growth and supply in North America so we need that strong demand and domestic demand to pick up. Hopefully that is going to come with retail prices slowly falling, which we have seen with beef right now."
Gervais also told the crowd the Ag sector continues to grow, noting that we may see farm income level out but doesn’t feel that’s negative.
"In the last ten years, we grew farm income by roughly $20 billion at the national level, which is $2 billion per year and we have never seen something like that," he said.
"We have to take that into account, that even if we are projecting farm income to level out, it is actually fairly positive. If we are able to maintain that level of income we are going to have no issues maintaining farm asset values, and we think that is to be the case."
He expects the Canadian dollar to remain around 75 cents.
That lower Canadian dollar can play in our favour he says when it comes to making our exports more competitive and yes while farm inputs (which can be influenced by the U-S) may be higher, but our biggest costs, land and labor are priced on the Canadian dollar.
Gervais overall is optimistic when it comes to agriculture in 2017.