Kenrick Jordan, senior economist, BMO Capital Markets, said: “The livestock segment should grow at a comparatively fast pace in the area of 3% next year, as producers respond to still favourable prices. In particular, livestock production should get a lift from the expected re-opening of the South Korean market to Canadian beef. Moreover, pork exports to Asia should continue at a brisk clip.”
Jordan also noted that crop production is slated to grow by about 1.5% in 2012 as planted acreage and yields move back to more normal levels and prices remain elevated.
Jordan added: “The sector has shown remarkable adaptability, evident in superior productivity growth, rising export orientation, a shift in output mix toward value-added products, and the launch of new enterprises like greenhouse vegetable production and specialty crops. These trends must hold for the sector to enhance its competitiveness.”
David Rinneard, national manager, BMO Bank of Montreal, said: “Canadian agricultural producers faced some challenges this year as many prairie grain growers had to deal with epic moisture levels and livestock farmers contended with rising input costs. However, Canada’s farmers have a wonderful track record of perseverance and success. With a return to better growing conditions, favourable prices, and continued demand, the 2012 table appears set for the industry to expand in the coming year.”
Jordan noted that it is specifically critical for farmers to boost productivity, “Competition is intensifying, as ‘non-traditional’ producers like Brazil, Argentina and Russia make inroads into global markets. In addition, sophisticated risk management strategies will be needed to address volatility in input and output prices, production and profits. Given the need for ongoing cost reduction, innovation, market diversification and risk management capacity, consolidation is likely to continue based on larger, more capital-intensive and more complex operations,” he said.
Source: BMO
© FoodBev Media Ltd 2024