Canadian producers are impressed to lean into their strategic planning experience this yr to fulfill what’s ahead. In response to the FCC monetary outlooks, challenges impacting the meals present chain will proceed nonetheless the demand for commodities and meals means there could also be different for progress, indicating a necessity for farms, agribusinesses and meals processors to innovate and deal with hazard.
The latest FCC outlook for the grains, oilseeds and pulses sector suggests prices will keep sturdy into 2022, due partly to the low nationwide and worldwide present of these commodities amplified ultimate yr by the drought in western Canada.
“There may be loads of optimism for this sector wanting on the yr forward; nonetheless, two of the largest financial tendencies that would affect profitability are rising crop enter prices and the affect of worldwide political tensions on commerce,” talked about J.P. Gervais, FCC’s chief economist. “I can’t emphasize sufficient the worth of farm administration and strategic pondering. Producers must proceed to plan for disruptions like we’ve seen previously yr.”
These elevated prices indicate seeded acres of soybeans and canola are projected to climb in 2022, whereas corn acres usually tend to come down because of the extreme worth of fertilizer. The price of fertilizer skyrocketed ultimate yr and is anticipated to stop rising at a fast tempo, nonetheless nonetheless keep elevated.
The cattle market may be signaling sturdy prices for 2022. The number of fed cattle in 2022 is forecast to say no and on account of extreme feed costs, fed cattle will likely be marketed at lower weights, inflicting amount by weight to say no. Nevertheless, given bigger prices, cattle receipts should develop. The drought critically impacted entry to feed, resulting in some cattle producers downsizing their operations.
“The pandemic has impacted shopping for choices within the grocery aisles. Canadian beef consumption slowed in 2021, however the optimistic five-year pattern in consumption pre-pandemic is predicted to renew whereas export demand stays sturdy,” Gervais outlined.