Just like 2009, oilseeds will pay the bills in comparison to wheat and barley in 2010.
Another year has come to an end, laying the groundwork for a fascinating 2010. It is always fun to look ahead and speculate on what the next 12 months could bring to Canadian agriculture. Here are a few of my thoughts.
POTENTIAL FEDERAL ELECTION
The conservative government is on fragile ground. How this government responds to a volatile Canadian dollar, weak livestock industry outlooks and friction at WTO could determine its future. Is agriculture a battleground worth risking political death or do the conservatives keep quiet in 2010 to try and survive? In my opinion, we will see the government continue to battle partisan issues like country of origin labelling and trying to aid livestock producers through volatile markets. For all of you waiting for the fall of the CWB in 2010, I think your wait will extend for at least another year because that is way too controversial for this government to even consider bringing up.
CONTINUED STRUGGLE FOR BEEF AND PORK PRODUCERS
I am not a professional meat market analyst, but I do believe the foundation has been laid for continued struggles in the meat business. For everyone’s benefit I hope I’m wrong. The Canadian dollar should be strong due to the growing concern over U. S. debt and deficit. It will take some time for the urban population to finally understand that H1N1 has nothing to do with eating pork. Feed grain prices are not strong, but not as weak as most thought three months ago. The beef industry faces continued downward pressure, and we’ll likely see the cow herd continue to shrink.
CONTINUED FOCUS ON FOOD
Production and consumption of food has become a very popular topic in the mainstream media. Many anti-agriculture activists have taken large swings at our industry in 2009. Between the movie Food Inc., the Time Magazine article, and several books condemning modern agriculture, it has definitely been a public relations battle. I firmly believe that 2010 will be the year that primary agriculture responds with the true story of how food is produced. It is essential that it is not the Monsantos and Syngentas that defend us. As farmers, we need to defend ourselves and tell our story to the urban consumer. Agriculture is not about factory farms but producing food in a very sustainable manner. It is time that agriculture told the true story, and we will in 2010.
FURTHER CONSOLIDATION OF THE RETAIL NETWORK
With the pull back of equipment sales and the huge volatility of fertilizer markets, agricultural input and equipment retailers will consolidate further in 2010. With fewer farmers comes fewer dealerships or retailer outlets to serve them. In discussing this with farmers across western Canada, there are mixed feelings on this outcome. It could lead to lower prices due to economies of scale being passed on to the farmer and it could mean better service. But it could mean fewer options and a reduced ability to shop around within the same brand type.
As with farmers, the average age of agriculture retailers is going up. People are getting older and there is not a generation really interested in selling agriculture inputs or equipment. This will be a great opportunity for aggressive players in the space.
INTEREST VS. LAND PRICES
One of the most requested topics on RealAgriculture.comis for outlooks on interest rates. With the consensus that the Bank of Canada will raise rates starting in the third quarter of 2010, I believe land price values could slow this year. I would have said the same thing last year, and it didn’t happen. But eventually this has to happen based on the upward risk of interest rates. Many economists argue that farming has become more about real estate than producing food and that concerns many.
GREAT YEAR FOR OILSEEDS
Despite the recent flax issues most crop-marketing analysts feel that the oilseed story will revive again in 2010. All you have to do is look at the recent durum pool return outlook from the CWB for confirmation. There is a fairly strong feeling in the marketplace that soybeans could return to the $12 per bushel level, which should drag canola higher. Just like 2009, oilseeds will pay the bills in comparison to wheat and barley in 2010.
These are just a few of my thoughts regarding 2010. If it is anything like 2009, we are in for a real ride and I’m sure will look back with comments of volatility, surprise and uncertainty. One thing is for sure, if things don’t go as planned in typical agricultural fashion all we have to say is, “There’s always next year.”
Shaun Haney publishes the Haney Farms Quarterly and his blog, which can be found at www.realagriculture.com.Haney Farms is located in Picture Butte, Alta., and is involved in the grain, seed and beef business. You can contact Shaun at 1-877-738-4517 or [email protected]