While North American farmers are in the process of wrapping up a fourth-straight bumper harvest, according to the BMO 2016 North American Agriculture Report, foreign exchange developments have yielded very different experiences for producers in Canada and the United States.
"In the United States, the lofty greenback, which has gained 20 per cent on a trade-weighted basis since the start of 2014, has been yet another bearish factor for crop prices and revenue," said Aaron Goertzen, Senior Economist, BMO Capital Markets. "Canadian producers, in contrast, have benefitted from a drop in the loonie, which is down 17 per cent against the U.S. dollar since the start of 2014 and has provided a like-sized lift to crop prices north of the border."
Mr. Goertzen added that as a result of the weaker loonie, domestic crop prices in Canada are 18 per cent below all-time highs – compared to nearly 30 per cent in the United States – and have risen five per cent from their recent low in mid-2014. The lower loonie has been a particularly fortunate development given the country's mediocre crop yields over the past few years.
In Canada, composite crop yields, which consist of corn, soybeans, wheat and canola, picked up modestly on last year's subpar result. However, they remained on-trend overall as a near-record crop of canola on the prairies was offset by a decrease in corn and soybean yields in Ontario.
"Canadian producers have undoubtedly been supported by the weaker loonie," said Adam Vervoort, Head of Agriculture Banking, BMO Financial Group. "This means now, with extra capital available, is an ideal time to invest in technology, which is driving the current string of bumper crops we've seen on a North American scale."
He added, "Those producers who have adopted modern agricultural practices, particularly in the corn space, have grown trend crop yields substantially. There's still room for autonomous, satellite-informed equipment to be refined and used, as the innovation trend shows no sign of slowing down."
Producers in Canada's Western regions, namely Alberta and Saskatchewan, have experienced a more difficult season impacted by weather challenges since October that have delayed their harvest timeline. However, the prairies remain on track for a near-record crop of canola.
Mr. Vervoort affirmed that producers in the West could have potentially seen stronger results weather permitting, but have managed to still sustain a decent crop turnaround. "The harvest conditions have not been ideal, but we continue to work with farmers negatively impacted by adverse weather."
While Canadian producers benefitted from a timely fall in the loonie that lifted crop prices north of the border, it also raised the cost of internationally-priced inputs like energy and fertilizer. Most producers face a wide variety of Canadian dollar-dominated expenses though, so margins have ultimately benefitted on balance.
From mid-2014 to early this year, the weaker Canadian dollar also caused food prices to inflate four per cent yearly. Consumers have been somewhat relieved as a result of the partial bounce-back of the dollar in the latter half of the year and a decrease in livestock prices.
Nov. 3, 2016, Alberta – The Government of Canada has secured market access for Alberta seed potatoes to Thailand.
Effective immediately, Alberta becomes the third province to have an export agreement with Thailand, joining Prince Edward Island and New Brunswick, both of which secured export agreements in 2009. Combined, these three provinces form about 76 per cent of Canada’s seed potato exports.
Alberta’s seed potato exports to Thailand could be worth up to $2 million annually, according to industry experts, adding to the $5 million on average exported annually to that country. The increased access will advance the competitiveness of, and create new opportunities for, the seed potato sector.
March 9, 2016, Prince Edward Island – The Island’s staple potato industry may be experiencing a slump, writes The Guardian. At least one Island potato grower who recently attended the International Potato Expo says farms like his are struggling to sell potatoes because there are just too many of them. | READ MORE
Jan. 25, 2016, Prince Edward Island – The dropping dollar, which is hovering just above the 70-cent U.S. mark, has not translated into bargain-hunting American importers snapping up spuds south of the border. In fact, U.S. exports of P.E.I.'s 2015 crop are down about four per cent, according to the PEI Potato Board. CBC News has more details. | READ MORE
December 22, 2015, Charlottetown, PEI – The Prince Edward Island Potato Board has a new executive as a result of its recent board of directors meeting.
Alex Docherty of Elmwood was re-elected for a second year as chairman of the board. Alex and his family own and operate Skyeview Farms Ltd., growing seed and tablestock potatoes. Alex also represents the seed sector for the Charlottetown District on the board.
The new vice-chairman of the board is Rodney Dingwell of Morell. Rodney and his family own and operate Mo Dhaicdh Farm Ltd., growing processing and tablestock potatoes. Rodney represents the processing sector for the Montague-Souris District on the board.
The third member of the executive committee is Darryl Wallace of Wallace Family Farms in Cascumpec, who was elected secretary-treasurer. Darryl represents the processing sector for the West Prince District.
Also joining the board are three new directors: Jason Hayden of Cherry Valley, who will be representing the tablestock sector for the Montague-Souris District; Wayne Townshend of Fortune Bridge, who will be representing the seed sector for the Montague-Souris District; and Fulton Hamill of Searletown, who will be representing the tablestock sector for the Summerside District.
The returning board directors are Donald Godfrey, Kirk Shea, Owen Ching, David Francis, John Hogg, and Glen Rayner.
The board also recognized the efforts of retiring board members Gary Linkletter, Charles Murphy, and Irwin Jay for their service over the past few years.
Nov. 16, 2015, Prince Edward Island – Potato harvest is nearly finished in Prince Edward Island, and the manager of the P.E.I. Potato Board expects yield will be down a bit across the Island this year due to dry conditions through much of the growing season. CBC News reports. | READ MORE
November 10, 2015, Toronto, Ont – Optimal growing conditions have created a glut of Ontario potatoes this season and, as a result, suppliers have been forced to cope with lower per-unit prices.
Sept. 2, 2015, Delta, BC – Farmers gathered at Brent Kelly Farms last Thursday for the annual B.C. Potato Variety Trial Field Day to see new varieties that have been grown in a test field. The goal is to see if any could become a viable crop in Delta. The Delta Optimist reports. | READ MORE
July 6, 2015, Summerside, PEI – A group of P.E.I. potato farmers who all sell potatoes to the same buyer do not believe it makes sense to each buy and install metal detectors to screen for inserted needles. That’s why they want government funds dedicated for food tampering screening to go toward metal detectors at one central location where all their thousands of potatoes are unloaded in Nova Scotia. The Guardian reports. | READ MORE
May 27 2015 - The Ontario government has passed the Agriculture Insurance Act, 2014 which will allow more types of agricultural products to be covered by the province's production insurance program.
Production insurance is part of a suite of business risk management programs designed to help farmers manage losses due to events beyond their control, such as weather, pests and disease. While production insurance is currently available for almost 90 commercially grown crops in Ontario, including grains, oilseeds and certain fruits and vegetables, the new legislation will expand eligibility for the production insurance program for more agricultural products.
The new legislation will help agri-food producers better manage risk, as well as encourage greater innovation, profitability and job creation in the agri-food sector. It also aims to help agri-food producers achieve the financial security they need to support business expansion and meet the Premier's challenge to the sector to double its growth rate and create 120,000 jobs by 2020.
The four-part plan includes investing in people's talents and skills, making the largest investment in public infrastructure in Ontario's history, creating a dynamic, innovative environment where business thrives and building a secure retirement savings plan.
“Our government is pleased to give a broader range of producers the opportunity to access production insurance," says Jeff Leal, Minister of Agriculture, Food and Rural Affairs. "This legislation will enable producers to manage the multitude of risks they face every day. Ontario is a leader in risk management because tools like production insurance give our farmers the protection they need to safeguard their investments, grow their farms and help meet the Premier’s Agri-Food Growth Challenge.”
The province says the Act will also give it more flexibility to work with industry partners to develop potential future production insurance plans for more sectors like apiculture and pork.
Amy Cronin, Chair of Ontario Pork says that pork producers strongly support Bill 40. “Broadening the scope of production insurance beyond crops is an important piece in supporting a positive business environment for the livestock industry in Ontario. Production insurance can be instrumental in providing stability against risks that are beyond the control of pork farmers.”
In 2013, there were more than 14,000 producers insured under Ontario’s Production Insurance program, representing more than five million acres in crop land.
By allowing more types of products to be covered by production insurance, the province says it is fulfilling a commitment made to farmers under the Growing Forward 2 agreement in 2013.
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