by KRISTIAN PARTINGTON
High commodity prices and a growing global demand for quality beef are some of the factors driving a sense of hopeful optimism in Canada’s farm community, which has struggled for years with red bottom-lines. But Larry Martin, senior research fellow at the George Morris Centre, a Guelph-based independent agri-food think tank, warns the good news of today may well be a prelude to the serious challenges of tomorrow.
Global meat consumption has tripled in the last 15 years as incomes rise in developing nations, he said, and this trend shows no signs of reversal. While Canadian livestock producers stand to benefit from this surging demand, sustainability of meat production for the global market is a real concern.
“I think we have no idea how important and how fundamental this shift in demand is going to be,” said Martin. As resources continue to dwindle in other regions, Canadian producers, with an ample supply of water and land, can fill a void. To do this, continued research and innovation and a more sensible regulatory framework to help boost lagging Canadian productivity, he said.
“Government organizations have never been blessed with huge amounts of wisdom and foresight,” Martin said, noting the recent decision by Canada's Natural Sciences and Engineering Research Council's recent decision to eliminate food production from its list of priorities. He also suggested decisions by governments across the globe to subsidize and support bio-fuel production have helped to boost commodity prices, which could result in a food crisis worse than what the world experienced in 2008.
“We've got this increase in food demand happening at the same time as we've got the policy-made markets for ethanol and bio-diesel increasingly eating up corn supply,” said Martin. “We're perilously close to disaster and until we tip over that edge to disaster, it could be good times for farmers.”
While the global supply challenges for commodities and livestock will continue to mount, forward-thinking producers stand to benefit, and from a Canadian perspective, “it's all positive,” he added. “There'll be bad times and lower prices and there will be more price volatility . . . but in general, this is a really good time to be investing in agriculture.”
Jack Holland, president of the Peterborough County Cattlemen's Association, said the picture isn't quite as rosy for beef farmers as recent reports might suggest. The same influences Martin cites as driving the rising price of corn cut into any gains made by beef farmers, he said.
Holland owns a cow-calf operation just outside of Peterborough. “The situation is improving,” he said, “but it’s got a piece to go yet because our costs have gone up so much.
Despite recent claims by Ted Haney, president of the Canadian Beef Export Federation that beef farmers returned to profit in 2009 and 2010, “I don't think there's a whole lot of enthusiasm around here in the beef business as of yet,” Holland added. “I'd like to see where he gets those numbers from.”
Kevin Suurd, who grows corn, soybean and wheat near Cavan, Ontario, about 20 minutes outside of Peterborough, sees an opportunity to experience positive returns in rising commodity prices for him and his colleagues.
But, “as the prices go up, so do our input costs,” added Suurd, who is also president of the Peterborough County Federation of Agriculture.
“I'm sure we won't see these prices forever but I hope we can see them around for a little while,” he said. “I'm sure there's a bit of a bubble caused by speculation . . . and we might see this for maybe a year or so but then we'll be back down to the $4.00 (per bushel/corn) range.” BF
Comments
“Government organizations have never been blessed with huge amounts of wisdom and foresight,” Martin said, ...Canada's Natural Sciences and Engineering Research Council's recently decided to eliminate food production from its list of priorities.
I am surprised at Martin's reaction to this decision. CPI(consumer price index) has not included food or energy for years as they are determined to be too volatile.
Meanwhile our current direction for agriculture is to be in two market categories food and energy not monitored for COP (cost of production) or CPI for inflationary influence. As price takers not much chance of getting paid as we should
Is this by chance or government design to be able to maintain a cheap food policy while utilizing and value adding our cheap food and energy with no checks and balances for cost, support or a sustainable food and or energy supply?
The focus has always been produce more food or energy through research with no regard or calculations for the economic side of profit margins assuring long term stability.
It's interesting to see someone who has as much knowledge as Larry Martin make these comments about Agriculture, and our brief opportunity to make some money. Many of us are now 60 years old or more, and can't find enough money to retire, because we would take more money out of the farm than it could afford. In a world where there is such a huge demand for energy, and for the most part, a surplus of food grain,it does not seem reasonable to think that we should not beable to use some of it for energy production. Other wise our current world grain prices would be in the toilet. When the world is short of food to the point that these stocks of grain are needed for food, then they can then go back into the food chain. In the meantime, Agriculture needs this economic shot in the arm. In the meantime, our city cousins continue to make sizable profits a the expense of Agriculture. I think that this window of opportunity simply represents our turn.
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