Trade a top issue in agriculture in 2015
Trade and trade talks dominated Canadian agriculture issues in 2015. A new report from Farm Credit Canada says the Trans Pacific Partnership negotiations were arguably the top economic story of the year. Although officials are still poring over the fine print, and the deal has yet to be ratified, the text offered a glimpse of future business opportunities and challenges for the agriculture industry. Already, 51 percent of Canada’s agri-food exports go to the countries that are part of the TPP.
The deal would open up new opportunities for beef, pork, grains and oilseeds. It could have a major impact on the future of supply management in Canada as we know it.
The Canadian Federation of Agriculture was supportive of Canada’s participation in the negotiations.
In other trade issues, the repeal of country-of-origin labels by the United States Congress as the year drew to a close removed a long-standing trade irritant between Canada and the U.S.
Another top story in 2015 was the Bank of Canada’s approach to interest rates. It cut the benchmark interest rate twice, largely in response to the fall in oil prices and the weakness of the economy. The low interest rate environment has enabled producers and agri-businesses to take advantage of expansion opportunities and invest in longterm growth.
The lower Canadian dollar helped to support exports and provided strong boost to profit margins in both crops and livestock. By comparison, soybean prices in the United States dropped by 20 percent last year, but were down by only 13 percent in Canada. Cattle and calf prices increased between three and 10 percent in the U.S., but were up by 20 percent in Canada.
In Prince Edward Island, despite a late spring, most crops showed good yield and quality. Potato acreage was down slightly to 89,500 acres. There were 89,000 acres of wheat, oats, barley and mixed grain and 58,000 acres of soybeans.
Farm cash receipts for the first three quarters of 2015 were estimated at $357.3 million, up by 1.5 percent over the previous year. Livestock receipts were up by 4.8 percent, soybean receipts were down by 7.7 percent while receipts from wheat were up by 19.8 percent. Potato receipts showed a slight decline. Total farm cash receipts in 2014 were $476.4 million.
Looking ahead to 2016, Farm Credit Canada is predicting another good year for Canadian agriculture. It forecasts that interest rates will remain low, the loonie will drop even lower and strong economic growth in China will be positive for global food demand.
Have a productive and prosperous new year.
For more information on the top issues in 2015, go to fccfac.ca/en/ag/a-year-in-review-the-top-issues-that-impactedcanadianagriculture-in-2015.html