Farm cash receipts continue upward trend
The latest Canadian farm cash receipts released by Statistics Canada reveal strength across grain and livestock sectors, a trend that’s likely to continue.
Year-over-year Canadian farm cash receipts between January and September rose for the seventh consecutive time, reaching $45.4 billion in 2017, up 3.3 per cent, according to the StatsCan data.
The dairy sector performed stronger than expected with a seven per cent increase, says Farm Credit Canada's chief agricultural economist, J.P. Gervais.
Gervais predicts fourth quarter farm cash receipts will increase again by about three per cent.
For 2018, FCC’s forecast is for a 2.5 per cent gain in farm cash receipts. That, however, would be dependent on the Canadian dollar remaining below 80 cents U.S. on average.
Ron Bonnett, president of the Canadian Federation of Agriculture, also sees room for continued strength in Canadian agriculture.
“I think the efforts being taken to diversify some of the markets and taking a hard look at how can Canada be a preferred supplier into the Asian market is key in providing that growth and stability going forward,” Bonnett says.
The result of ongoing trade negotiations will also play a role, he says.
Crop receipts rose 2.6 per cent in the first three quarters of 2017 thanks to canola and non-durum wheat.
For 2018, Gervais thinks more canola acres might limit that commodity’s upside.
“We definitely expect pulse acres to come down. Those acres are going to have to go somewhere, and I suspect a lot of it is going to go to canola,” Gervais says.
Large global wheat supplies will challenge the crop's strength potential, Gervais says.
Livestock receipts in Canada rose $419 million to $18.4 billion in the first three quarters of 2017, and Gervais is bullish about future pork and beef demand.
“Demand has been absolutely strong both globally as well as domestically,” Gervais says of pork in 2017.
Economic growth in the United States has been a big driver for red meat demand, helping offset high U.S. cattle and calf inventories.
“The strength of demand domestically and in export markets has really been helping the red meat sector,” Gervais says.
Robust Canadian farm cash receipts show signs of continued strength.
Article by: Richard Kamchen