The Chief Agricultural Economist with Farm Credit Canada JP Gervais told producers at an Economic Trends in Agriculture event that there is a strong demand for our agricultural commodities worldwide.

“We’re well positioned in Canada for a number of different reasons trade deals, being very competitive, very productive, our good quality, and our reliable reputation as a supplier. All of that makes me really optimistic, but there are a few headwinds for sure, from a pricing standpoint and profitability as well. So, those are the things that operations need to monitor going into the year.”

Gervais is forecasting a 75 cent Canadian dollar and expects to see at least one hike in interest rates coming in the second half of 2019.

He notes that Canadian households carry a lot of debt adding that farm debt has been climbing fast in recent years along with the strong growth we’ve seen in the industry.

Gervais says just in Saskatchewan, for example, we’ve been able to grow gross farm income by more than $600 million a year for ten years.

“Of course, that has actually fed into asset values going up and we’ve had some very strong appreciation rates for farm assets, especially farmland and with that farm debt has grown. So, with that, I think now we have to be a little more cautious."

He suggests producers take a second look and see where they stand in terms of financial risk in their operation, especially with borrowing costs climbing.

Gervais expects margins will be tighter in 2018-19  adding that farm asset values, farmland in particular, in Saskatchewan will be more stable or grow at a more moderate pace.

Send your news tips, story ideas and comments to [email protected]

 

 

More Ag News

Chinook Junior Stock Show Celebrates 24 Years

Over 200 young beef enthusiasts were competing at the Claresholm Agriplex on Wednesday for the 24th Annual Chinook Junior Stock Show. Show Organizer Cecilie Fleming says showing cattle equips youth…

Young Guns Contest Is Back!

There's some serious cash on the table for young people involved in beef 4-H, junior cattle shows or beef production in Alberta. The Alberta Beef Producers' Young Guns contest is back for people ages…

CochraneNow.com is Cochrane's only source for community news and information such as weather and classifieds.

Search the Biz Guide

Login