|
|
 |
|
Viewing report
|
|
|
|
Canada Agribusiness Report Q4 2011
Business Monitor International, Oct 2011, Pages: 61
Canada Agribusiness service provides proprietary medium term price forecasts for key commodities, including corn, wheat, rice, sugar, cocoa, coffee, soy and milk; in addition to newly-researched competitive intelligence on leading agribusiness producers, traders and suppliers; in-depth analysis of latest industry developments; and essential industry context on Canada's agribusiness service.
The Canadian agriculture sector will remain a relatively regulated industry, although the expected closure of the Canadian Wheat Board in the coming months should increase competition in the country's wheat sector and benefit farmers, especially large ones. Despite the liberalisation, we are revising down our 2011/12 wheat output forecasts as bad weather affected plantings. Corn output will remain strong over the forecast period as ethanol plants are expected to come online in the coming years. Elsewhere, we continue to see poor growth prospects for Canada's livestock sector (excluding poultry) even though high prices and government support have led to an unexpected increase in output in 2010/11. Given poor consumption growth and our expectation of moderating grain prices (which will ultimately lead to lower cattle prices), we continue to see poultry as being the outperformer among the grains complex over the medium term.
Key Trends
- Pork consumption growth to 2015: 4% to 1.04mn tonnes. Consumption growth will be weak over the medium term as consumers switch to other livestock products. Pork consumption growth will, however, remain stronger than beef due to competitive pricing.
- Corn production growth to 2014/15: 13% to 13.06mn tonnes. This will come from large domestic demand increases, owing to the Canadian government's decision to raise the renewable fuel content. As of yet, new ethanol plants have not come online but they are expected to in the coming years.
- Dairy production growth to 2014/15: 8% 8.99mn tonnes. This will be due to continued yield increases and investment in the sector. However, the regulatory framework surrounding the sector should prevent any significant production increases. .. 2011 Real GDP Growth: 2% (down from 3.2% in 2010; predicted to average 2.6% from 2010 until 2015).
Industry Developments
We have revised down our forecast for 2011/12 Canadian wheat production to 22.6mn tonnes as persistent floods limited plantings. Consequently, we expect the country's wheat production surplus to reach 15.2mn tonnes, slightly lower than the 10-year average of 16.1mn tonnes. We believe lower 2011/12 Canadian wheat production would tighten global supply somewhat for several reasons. First, even though Canada represents only 3.6% of global wheat production, it is the world's 8th largest wheat producer. Also, as this revision is made in the context of others (such as our revision down of 2011/12 EU-27 wheat production) the change leads us to forecast a 2011/12 global wheat deficit of 2.8mn tonnes. This is in contrast to our previous expectations for a 2011/12 surplus.
Canadian cattle inventory on July 1 2011 was 5.18mn head, 1.7 % lower y-o-y. A significant proportion of the reduction came from lower beef cow numbers, which were reported at 4.20mn head, 2.1% lower yo- y. The total cattle inventory in Canada peaked in 2005 at 16.90mn head but has declined ever since, particularly since the supply of fed and feeder cattle to the US resumed in the late 2000s. Consequently, producers liquidated a significant portion of their beef and dairy herds and kept fewer cattle for herd rebuilding. The country's pig herd managed to increase slightly in 2011 on the back of high prices and relatively strong export competitiveness. However, we still see production ultimately falling slightly over the long term.
In October 2010, the new federal complex for dairy production research at the Dairy and Swine Research and Development Centre in Sherbrooke (Que) was officially opened. It was announced in August 2011 that The Newfoundland and Labrador livestock sector will receive more than CAD11mn to promote innovation leading to a reduction in the risk of foreign animal diseases. Specifically, CAD7.5mn will go towards the Agriculture Research Initiative to help farmers enhance environmental sustainability, reduce production costs and capitalise on new livestock and crop management practices. A further CAD3.9mn will be dedicated to the Foreign Animal Disease Preparedness and Specified Risk Materials Disposal Initiative, which endeavours to build a new animal disease laboratory that will help increase surveillance of animal diseases.
Product samples
A sample for this product is available. Please Login/Register to download this sample.
|
|
|
|
