Paul Martin's Business Update - November 5th

Paul Martin's Business Update - November 5th

Farming is a good business to be in these days and should be for a while to come.

That’s the primary message of an analysis of the outlook for agriculture prepared by the economists at TD Canada Trust. In a report issued this week, the bank observes that this year’s bumper crop is good news for grain and oilseed producers. There simply is no substitute for inventory. And, while the volume has put pressure on prices, that may work out well for livestock growers as feed costs are dropping.

If there’s a cloud in this story it will be the challenges related to storage and shipping this year’s larger volume to export position.

Looking ahead the bank forecasts that prices we’re seeing now will hold relatively steady for the next few years but after that, growing demand globally, will become the dominant factor in the industry. And, given that the world’s population continues to rise, it is a positive long-term story for prospects in the agricultural sector as major input costs – fertilizer, interest rates, labor and fuel – have been steady or falling.

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