Canadian producers weathering market volatility

A Farm Credit Canada report on trade indicates Canadian agricultural producers are doing a good job dealing with market volatility
calendar icon 1 November 2018
clock icon 3 minute read

The latest Farm Credit Canada trade report indicates Canadian agricultural producers are experiencing commodity price volatility due to an evolving and uncertain international trade environment but that shouldn’t significantly impact Canada’s long-term export growth potential.

Craig Klemmer, a Principle Agricultural Economist with Farm Credit Canada, says the report looked at the impact of price volatility on agriculture over the past 30 years.

Mr Klemmer says, "When we look at that volatility, we're not in the most volatile time period that we've seen in agriculture but obviously there has been some volatility more recently due to these trade disruptions that we're seeing beyond the Canadian border.

"A lot of the disruptions to prices are due to North American prices being subject to tariffs from both China and Mexico, and those are impacting prices there.

"When we think about some of the opportunities for Canadian producers, on the soybean side of things, we've seen increased exports of soybean because of some of the tariffs that we see on US exports to China as well.

"I think over all Canadian producers are fairly well equipped. Volatility is not new, as we can see from our report. Producers realise it's one of the many challenges that they face when they're creating their marketing plans and making their decisions about planting intentions or their mix of livestock and crops.

"This isn't something new and it's something that they know is part of their operation and something that they've got to manage the risk for. From that perspective - from the management side of things and from the knowledge side of things - I think producers are in a very good position to address market disruption."

Mr Klemmer acknowledges it's also about recognising what the impacts are and whether they influence decisions moving forward, recognising that these factors impact differently region by region, and commodity by commodity, and are dynamic situations all the time.

As reported by Bruce Cochrane, Farmscape.Ca

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