Farm Credit Canada reports the agriculture sector is weathering the current economic uncertainty well.
Canadian hog producers have experience substantial losses over the past 18 months to two years forcing many to exit the industry.
Farm Credit Canada vice president for the Prairie Region Mike Hoffort says things are looking a lot better right now with hog prices about 30 percent higher than one year ago, lower feed costs and a lower Canadian dollar.
Much of our work with our customers is just making sure that they’re getting themselves ready and structured to be able to come out of what has been a very difficult time for them so they may not be making big investments at this stage but they are really trying to take stock on where they are at and how they might want to move forward.
That being said, we have seen activity in barns that were emptied in the past year to 18 months that are being brought back into production.
Farmers that are looking to expand have been picking up some of those barns which is, I think, a good news story and does kind of give an idea of how people are looking at the future in a very positive way.
In terms of people who are making these investment decisions, I think they’re really sharpening their pencil and making sure that they’re stepping into these things with their eyes open and doing a lot of budgeting, making sure that their business plan has got a little bit of room in it if we were to get some other shocks from a profitability perspective.
The other reality for producers in the prairies, where I’m most familiar, there are number that do operate under some contract arrangements and, in those cases, they’re quite certain if they’ve come through this last period of time and the contracts have been honored and maybe extended that they’re fairly well positioned to be able to step out now and perhaps even take advantage of a situation where they could expand in a positive way for their farm.
Hoffort says agriculture is weathering the economic volatility fairly well and FCC is very optimistic for the future of agriculture, even areas like the hog sector that have experienced some challenges.
Source: Farmscape.Ca
