Steady demand | United Nations forecast positive for Canadian farmers
A 10-year agricultural outlook suggests Canadian livestock producers will continue to see strong prices and demand while grain and oilseed producers will have to be content with gradual improvements.
James Bryan, senior economist at Farm Credit Canada, said the factors driving agriculture today are expected to continue through 2023.
“We have rising populations in developing countries, rising income and increasing urbanization, so that should continue to contribute to the increasing demand for meat products,” he said.
“But we have to remember that it’s actually going to start to slow-down over the next 10 years as population growth rates start to slow.”
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Population growth rates are expected to flatten around 2050.
The report by the United Nations Food and Agriculture Organization and the Organization for Economic Co-operation and Development predicts that North America will continue to be a dominant exporter. Bryan said that’s good for Canada, which produces far more food than it can consume.
“If we didn’t export, our producers would be faced with rock bottom prices,” he said.
The report said demand will remain firm for all agricultural products.
“Crop prices are expected to drop for one or two more years before stabilizing at levels that remain above the pre-2008 period but significantly below recent peaks,” the report said.
Bryan said prices will slowly re-bound over the next eight years of the outlook period and be less volatile as tight stocks-to-use ratios ease.
Lower grain prices mean lower feed prices for livestock producers.
“It is expected that both cattle and hog prices are supposed to remain fairly stable around the level of the last two or three years, which is actually a fairly positive price for them,” Bryan said.
The report suggests that livestock and biofuel production will outpace crop production.
Bryan said poultry is expected to displace pork as the world’s most popular meat.
It is easier and cheaper to keep in the developing world than pork or beef.
“Since we don’t really export chicken, we won’t be able to capture that potential benefit, but pork consumption is expected to make up 30 percent of the increase in meat consumption, so there’s still opportunity there for Canadian producers,” he said.
