FCC snapshots show why agriculture is one of Canada’s key sectors
The livestock sector takes the red ribbon as the hottest sector in Canadian agriculture based on projected cash receipts over the next 12 months, according to Farm Credit Canada’s (FCC) agriculture economics team.
“It seems like almost everything with four legs or feathers is in high demand in Canada and has significant growth potential in export markets around the world,” said J.P. Gervais, FCC chief agricultural economist, in releasing a series of agriculture sector economic snapshots. “The solid performance of all sectors speaks to the resilience of Canada’s agriculture industry, as well as its ability to innovate and adapt to the changing consumer markets.”
FCC’s agriculture sector snapshots consider various factors that will influence cash receipts for various agriculture commodities over the next year. These factors include prices, production, demand and export opportunities.
While livestock stands out as having the greatest potential for increased cash receipts, other areas of Canada’s agriculture industry are also doing well. That partly explains why the Advisory Council on Economic Growth recently identified Canada’s agriculture and food industry as one of eight sectors with significant global growth potential.
“The Canadian agri-food sector has great potential, given the large natural endowment of water and arable land, distinctive record of accomplishments in research, and exceptional base of companies and entrepreneurs,” according to the advisory council’s report, Unleashing the Growth Potential of Key Sectors, released in February.
The report notes that Canadian agriculture already employs 2.1 million workers and accounts for 6.7 per cent of the country’s gross national product (GDP).
By breaking down the industry into its various parts, Gervais said FCC’s sector snapshots give a clear indication of what areas of Canadian agriculture are doing well and where there is more opportunity for growth.
Within the livestock sector, hog cash receipts are forecast to climb by 12 per cent over the next 12 months, cattle by eight per cent and poultry by seven per cent. The dairy sector places a close second with cash receipts projected to grow by 11 per cent.
Key crops in western and eastern Canada make up the third general area analyzed in the FCC snapshots. Cash receipts for wheat, canola and lentils in western Canada are projected to decrease by one per cent over the next 12 months flowing into 2018. However, the slight decrease comes after record-high cash receipts over the previous two years. Cash receipts for corn and soybeans in eastern Canada are projected to grow by a modest one per cent over the same 12-month timeframe.
Another snapshot projects Canadian farm equipment sales will see an overall improvement over the next 12 months compared to the previous two years. Total tractor sales (smaller tractors and four-wheel-drive tractors) are projected to climb slightly above the five-year average by mid-2018, while combine sales will increase in 2017 before losing steam and landing close to the five-year average in 2018.
By sharing agriculture economic knowledge and forecasts, FCC provides solid insights and expertise to help those in the business of agriculture achieve their goals. For more information and insights, visit the FCC Ag Economics blog.
FCC is Canada’s leading agriculture lender, with a healthy loan portfolio of more than $30 billion. Our employees are dedicated to the future of Canadian agriculture and its role in feeding an ever-growing world. We provide flexible, competitively priced financing, management software, information and knowledge specifically designed for the agriculture and agri-food industry. Our profits are reinvested back into agriculture and the communities where our customers and employees live and work. Visit fcc.ca or follow us on Facebook, LinkedIn, and on Twitter @FCCagriculture.
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