Canadian Producers Weathering Market Volatility

A Farm Credit Canada report on trade indicates Canadian agricultural producers doing a good job dealing with market volatility

by Bruce Cochrane – FarmScape Online

A just released 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.

“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”

“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.

“We’re seeing the pork markets are having more impacts from that.

“A lot of those are that North American prices, specifically U.S. prices for pork, have 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 U.S. 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 realize 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, from the knowledge side of things I think producers are in a very good position to address that.”

Klemmer acknowledges it’s also about recognizing what the impacts are and does that influence decisions moving forward, recognizing these factors do impact differently region by region and commodity by commodity and are dynamic situations all the time.