Ag issues in Canada

Recently, I enjoyed another trip to the neighbors of the north to conduct seminars and individual meetings with some of the top agricultural businesses of Canada.  Each time I travel outside the borders of the United States, I find unique and valuable perspectives on agriculture, business and life, in general.  This trip was no exception. 

The dollar

The strength of the U.S. dollar continues to be advantageous for some sectors of agriculture throughout Canada. In fact, many Canadian grain producers might ask, “Grain prices? What’s the problem?!” The strong dollar makes exports from the grain and livestock industries more attractive economically because of the weak Loonie or the Canadian currency. Some Canadian grain producers received the equivalent of $5-$6 per bushel for corn and $12 per bushel for soybeans. Profits and cash flow are still strong in many Canadian sectors of agriculture not only because of the prices, but cash rents and other costs have increased at more modest levels as compared to the U.S.

Food safety, animal welfare and water issues

While regulatory issues present challenges inside the United States, they certainly do not stop at the borders.  In Ontario, Canada, there was much conversation about the pollution of Lake Erie as well as the role of surrounding producers. With proximity to the major metropolitan areas of Toronto and satellite cities, the conflict between urban and rural interests was quite strong during my visit. Food safety and animal welfare issues were prevalent in my meetings with poultry, hog and other livestock sectors. As a result, changes such as cage and crate free animal production are being made. Additionally, some producers are taking advantage of the population base through direct marketing. This is increasingly popular especially amongst young producers, females, minorities and other producers who are aligned with the urban population.

Interestingly, the urban population bears quite an influence on Canada’s agriculture industry.  The new term “social license” is being used in Canadian agriculture. This refers to the producer’s long-term commitment to sustainability including a receptive and compliant approach to public and consumer views. Growing in popularity, a “social license” is defined by the Canadian Federation of Agriculture as, “ongoing level of acceptance, approval and trust of consumers regarding how food is produced...” 

Agriculture transition

Whether in production agriculture, banking or another agribusiness, the movement of the younger generation was evident. Many of the producers attending the seminar were in a transition management mode. I was pleased to see that most were being proactive by hiring consultants and engaging with the family to map out and plan the generational transition.   As a general observation, not only were many of the bankers younger, but there were more female bankers than in years past. In fact, many of the bankers once seen as trailblazers in the Canadian banking sector are now close to retirement. Just like the industry, the many faces of agriculture are changing and progressing. 

Apprehension

Many in Canada are quite apprehensive about the upcoming U.S. elections. I heard phrases like, “What is going on south of the border?” and “Are American politics some sort of reality show?” and lastly, “Is the U.S. committing political suicide?” Concerns included potential free-trade limitations, the proposed construction of border walls, as well as the amount of money and time spent on U.S. political campaigns. In turn, Canadians are also concerned whether their newest federal spending programs under Mr. Trudeau will actually provide stimulus and growth to the Canadian economy.

Prices, regulations, transition and uncertainty are significant issues for any agricultural operation, regardless of its location. Only time will tell how the United States and Canada will progress through these issues; however, as part of a world that brings surprises with each turn, the global stage will certainly not be boring!   

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