The Chief Agricultural Economist with Farm Credit Canada suggests the near-term export demand for Canadian agricultural commodities will play a key role in shaping the outlook for Canadian farm products.
Farm Credit Canada’s just released farmland values mid-year review shows the national average for Canadian farmland values maintained the pace of the past years, increasing by an average of 3.7 per cent for the first half this year.
FCC Chief Agricultural Economist J.P. Gervais says, despite the challenges faced by producers of some commodities, there is plenty of room for optimism.
We’ve got a good crop, good in a sense that it’s an extremely sizable crop coming in in 2020. Prices for some different commodities have been moving up and I do think that’s going to push a little bit of a swing in receipts. Maybe there’s going to be a little bit of a decline when it comes harvest time, that usual type of seasonality but overall, I do think that the demand appears to be strong.
On the livestock side, we’ve got some prospects for strong demand as well going forward. We have production in the U.S. that’s slightly increasing but, because of the African Swine Fever outbreak in China and now other parts of the world, Germany to be specific, I do think that the prospect and the outlook for export demand for Canadian red meat is also quite positive.
I do think that when you look at the next little while, before the end of the year and into early 2021, the one thing that I’m going to be monitoring is really that pace of exports, the strength of the demand for meat and grains and oilseeds that we expect to continue going forward.
~ J.P. Gervais, Farm Credit Canada
Gervais acknowledges any second wave of the COVID virus could slow down the global economy and negatively impact export demand. He says the outlook is positive but there is still risk in the market place.
