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4 Markets To Watch

Which are the “for sure” crops to grow in 2010? Well, Dan Hawkins of FarmLink Marketing Solutions won’t give a list of crops with guaranteed profitability for next year, but he did have some general advice for producers looking ahead to the next few years.

1. While crop prices are down heading into 2010, one the major inputs, fertilizer, is also about half the price this year over last. Pencil out your crop budgets for 2010, and while you can’t ignore prices, pay particular attention to margins. Even though prices are down, with inputs lower, see where the best profits are to be made.

2. In the current economy, Hawkins doesn’t see any obvious dark horses, but he does suggest keeping an eye on China. As the economy improves, China is poised to have another year of record canola imports. Watch ag news sources for announcements of canola sales to China. If sales hit another record it will mean opportunities for Canadian producers, but be patient.

3. Another market to watch is pea and lentil sales to India. Current government and trade policies in India could result in “some real surprises.” India hasn’t been particularly good at sending out market signals for crops like peas. Be watchful and keep in touch with pea buyers. If the market signals are there, there could be greater opportunity for pulses in India.

4. In the longer term, Western Canadian producers need to get used to volatility in the ag markets. There will be some breakeven years, but also years of strong prices. The major world economies such as China, India, Brazil and Russia can all affect agricultural markets. Even though Russia (and former Soviet republics) may one day be organized enough to become net exporters of agricultural products, the world population is also still growing. Russia may become an exporter of wheat, but the world will still be challenged to feed an ever-growing population.

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