Flexibility, big bins and conservative financing are probably the long-term keys for western Canadian farmers trying to survive the frequent market disruptions that an increasingly protectionist world is hurling our way.
Keeping a diverse rotation and being able to hang on to unwanted crop are likely to become increasingly important as trade disputes become a more common weapon in international disputes and a more flagrant tool of protectionism.
So too will be the ability of farmers to stay flush even if a major market suddenly shuts down, as we’ve seen many times before.
A diverse rotation stops farmers from becoming too exposed, too dependent on one big crop in cases where one big buyer abruptly stops buying. That’s something we’ve learned from canola and durum planned for China and Italy today, and from beef and pork aimed at the United States market during the eras of BSE and country-of-origin labelling.
Too much reliance on one market or one big crop can be deadly, especially if finances are stretched.
The good news is that the western Canadian farming industry appears to be sounder than many fear. There’s a general glumness souring prairie farm country today, with China’s canola blockade, Italy’s durum devilry and India’s pulse import restrictions darkening many farmers’ outlooks. That’s not a happy situation, but it’s a heck of a lot better than the despair, panic and fury that you’d see if we were in financial freefall.
That’s the weird little secret we’re holding onto: farmers are doing OK despite all these trade problems. 2019 won’t have been a good year, but for most farmers it’s been manageable.
That’s a sign of the growing economic strength of prairie crop farms and bodes well for the future. With further diversified rotations, more secondary domestic and international markets and sound financing, farmers should be able to weather the coming storms.
Farmers aren’t getting the good years they deserve, but if down times like today don’t get worse, perhaps this period of survival will look like the period when prairie farmers dropped the “bust” part of the boom and bust commodity cycle.