Cana­dian farm­ers bet­ter off than U.S. pro­duc­ers

Moose Jaw Express.com - - News - By Ron Wal­ter - For Agri-Mart Ex­press

Farm­ers in Canada are bet­ter pre­pared than their U.S. coun­ter­parts to deal with an ex­tended pe­riod of low com­mod­ity prices, says a ma­jor bank.

The BMO har­vest out­look, pre­dict­ing a pe­riod of soft com­mod­ity prices, notes sig­nif­i­cant dif­fer­ences in the abil­ity to tol­er­ate tough times among the two coun­tries.

In the U.S., half a decade of low prices “has taken a se­ri­ous toll on farm­ers, es­pe­cially smaller high-cost oper­a­tors.”

Amer­i­can farm rev­enues peaked in 2012, de­clin­ing by 14 per cent since and will edge lower this year. Ris­ing wage, fer­til­izer, fuel and in­ter­est costs put pres­sure on farm prof­its.

The re­port says a $12 bil­lion fed­eral aid pack­age for farm­ers is not enough to off­set costs and is aimed at soy­bean grow­ers.

Farm­land prices rose 300 per cent since 2000 but are mov­ing side­ways and could de­cline if farm in­come stays un­der pres­sure.

Cana­dian farm­ers, while re­ceiv­ing the same world prices, have been shielded from lower com­mod­ity prices by a drop in the Cana­dian dol­lar. U.S.-based pric­ing has dropped but Cana­dian farm­ers’ crop rev­enue has in­creased 16 per cent since 2012, sim­ply be­cause of a 23 per cent re­duc­tion in the loonie’s value.

Cana­dian farm­ers have an op­por­tu­nity to cap­ture mar­kets over­seas too.

Farm­land prices in this coun­try, while in­creas­ing briskly, could be vul­ner­a­ble as in­ter­est rates move higher.

Ron Wal­ter can be reached at ron­[email protected]­tel.net

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