REGINA—An agricultural economist says a new international outlook “flips the last 10 years on its head” for the farm industry.
The outlook from the Organisation for Economic Co-operation and Development and the United Nations Food and Agriculture Organization looks at demand for agriculture products from 2014 to 2023.
It says crop prices are expected to drop for one or two years before stabilizing at levels that remain above the pre-2008 period, but significantly below recent peaks. Wheat prices will decrease because of “ample production prospects” in the United States, Canada and Brazil, it says.
But meat, dairy and fish prices are expected to rise.
“If we look at the last 10 years and leave out this year, the grains and oilseeds sector has had quite a run-up in prices and in profitability, whereas the cattle and hog sectors had challenge after challenge after challenge that they were facing,” James Bryan with Farm Credit Canada said Tuesday.
“So then in this 10-year outlook, it seems like the grains and oilseeds sector should remain profitable, but it’s going to be much tighter margins than experienced in the last five or six years. Whereas the cattle and hog sectors, because of lower feed prices and fairly high prices, seems like they should be doing fairly well.”
People are also eating more meat.
According to the outlook, developing countries will account for 83 per cent of extra meat eaten in 2023, with Asian markets consuming more than half of it. The report says global meat consumption per capita is expected to reach 36.3 kilograms in retail weight by 2023—an increase of 2.4 kilograms.
The report also notes that a free trade agreement Canada signed with the European Union last fall will likely increase exports for the meat sector.
Exports could be the bread and butter for Canadian producers.
“In North America, and particularly in Canada, we produce much more than we can consume domestically, so we are absolutely dependant on growing markets in developing countries to export our product to because we simply produce too much of everything for our own consumption,” said Bryan.