Most people are getting ready for things to go back to normal. As the pandemic wanes, at least here in the vaccinated world, most people are expecting life, business, school and society to go back to normal, after almost two years of COVID-19. Some expect it right away and some don't expect things to normalize for months, but few don't believe society is in the process of getting back to it.
But what's going to be normal on the other side of the virus? That's really hard to tell, because not only has the pandemic been a huge shock to almost all the systems we operate and live inside, but time has marched on. Not since the Second World War have we so severely interrupted our society. No doubt some things have been broken, some have been left behind, and new things have been developed that will dominate the years after the pandemic. But after every war-caused interregnum society has emerged profoundly changed. It's hard to imagine that this pandemic won't have wrought some permanent changes.
What's going to be normal from now on? Here are some things I'm watching to see.
Inflation: Ultra-low inflation has been the norm for almost two decades. Does that continue, or does all the government spending and easy monetary policy lead to a new era of higher inflation? Not only have governments eagerly spent like drunken sailors, but many have embraced monetary policies that are deliberately designed to spur more inflation. Yet millions of people and businesses have had their financial positions wrecked by recession, lockdowns and disruption. Are we going into a new era of higher inflation, or are we going to return to the old normal of low inflation based on weak consumer demand?
Does commodity demand stay strong? Commodity prices have been rallying for much of two years now, following a half-decade of weakness. Does that strength become the new normal? Crop and meat prices rely greatly upon the strength of the overall commodity market for much of their value. Whether or not the recent commodity bull market is an aberration or the new normal will have a major impact on farmers' returns in coming years.
World demand and economic strength: There has been lots of growth coming out of the pandemic, following the great slump of the early months of the crisis. Governments are indebted, but consumers are flush. What kind of growth comes out of that freakish combination?
The drought. Has it ended? No issue will more determine Western Canadian farmers' situation than the continuation or alleviation of the prolonged drought that has hit the western Prairies for three years, and severely hit the eastern Prairies this summer. Is drought now "normal," or is it an aberration we're already leaving behind? Two very different worlds result from the answer to that question.
How does the agriculture industry respond to the short 2021 crop? Do service providers and suppliers take a hit this year but carry on like normal? Or do some players shrink, quit, fail? For most of them, they're just beginning to feel the impact of the short crop and ravaged cow herd. In a year the agriculture industry could look pretty similar to today. Or it could be profoundly changed. That's something that's just beginning to be worked out.
African Swine Fever: ASF has been hanging over the North American hog industry for a few years. That's normal. But things have changed now that ASF has appeared in the Caribbean. Fearing ASF has been normal, but grappling with it directly has not been. That, unfortunately, might be about to become normal.
Who's the boss in Ottawa? We've gotten used to having a Liberal minority government in Ottawa. We know its fundamental concerns and usual behaviour. Whether or not one likes its particular political colour, dealing with the Trudeau government has become normal. That might change come September 20. A lot of things could change for farmers if the government changes, whether that's to a Liberal majority, a Conservative majority, a Conservative minority, or something giving the NDP more say.
I was just at an event this morning. None of us were really sure what we're supposed to be doing with masks, handshaking, outdoor events, official functions. In that, like the issues above, we're all just trying to figure out what is normal today, and what's going to be normal. These might not be things we can know until they become normal, and that's going to take some time.