Canada Agribusiness Report Q4 2012
Business Monitor International, October 2012, Pages: 77
The 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.
BMI View:
Canada’s involvement in the Trans-Pacific Partnership negotiations has the potential to begin a process that could ultimately see the country’s dairy and poultry supply management system dismantled. After the abolition of the Canadian Wheat Board’s monopoly on grain trading, dairy and poultry could be the next industries to be shaken up. For now, we expect milk, poultry and pork production growth to be mild in 2011/12. We forecast corn output to decline in 2011/12 but to remain strong in the coming years as higher renewable fuel content requirements encourage the construction of new ethanol plants.
Plummeting Prices
- Corn production growth to 2015/16: 10.7% to 13.0mn tonnes. Large domestic demand growth coming from the livestock sector and higher renewable fuel content requirements will drive output growth.
- Milk production growth to 2015/16: 6.8% to 9.0 tonnes. Output will increase on the back of continued yield increases and investment in the sector. The recent signs of reconsideration of the supply management system could be beneficial to the industry in the medium term.
- Poultry consumption growth to 2015/16: 13.7% to 1.1mn tonnes. The perceived healthier nature of poultry, as well as increasing export opportunities, will support consumption growth.
- 2012 real GDP growth: 2.0% year-on-year (y-o-y). Down from 2.5% in 2011 and predicted to average 2.4% over 2011-2016.
- Consumer price inflation: 1.8% y-o-y in 2012. Down from 2.9% in 2011 and predicted to average 2.2% over 2011-2016.
- BMI universe agribusiness market value: 3.9% y-o-y decline to US$23.6bn in 2011/12.
Forecast to average US$23.8bn a year between 2010/11 and 2015/16.
Industry Outlook
Owing to favourable weather and higher global prices in 2011, we expect improved output for Canadian wheat in 2012/13. There was much speculation about the end of the CWB as the sole marketing authority for Western Canada’s wheat on August 1 2012 and its effect on future production. We believe the end of the monopoly is likely to have broader and positive effects for farmers in the coming years, as they could receive higher prices in a more competitive market with several purchasing entities. The industry is also likely to benefit from Canada’s free trade agreement (FTA) with Morocco, which is set to offer Canadian wheat unrestricted access to one of the world’s largest wheat importers.
In 2011/12, we forecast poultry production to increase slightly, driven by demand from the retail sector and as more consumers switch away from beef. The Canadian government will invest more than CAD600,000 into the Atlantic Poultry Institute to improve feed and health research. The investment is aimed at increasing the region’s poultry producers’ competitiveness, enabling them to increase quality of their products to meet demand from the more health-conscious consumer. This is expected to support production in the longer term, as will increasing export opportunities and high poultry prices.
In 2011/12, we forecast mild milk production growth. The number of milk cows in Canada has fallen by 17% over the last decade but this has been countered by a increases in yields and greater consolidation at farm level. BMI believes Canada’s involvement in the TPP has the potential to begin a process that could ultimately see the country’s dairy and poultry supply management system dismantled. In our view, this could be the catalyst that leads the system to the same fate as the CWB. Over the short term, this development could reduce Canada’s dairy production but it presents upside risks to our long-term production outlook.
Executive Summary 5
SWOT Analysis 7
Canada Agribusiness SWOT 7
Supply & Demand Analysis 8
Canada Sugar Outlook 8
Table: Canada Sugar Production & Consumption, 2011-2016 8
Table: Canada Sugar Production & Consumption, 2008-2012 9
Canada Livestock Outlook 10
Table: Canada Poultry Production & Consumption, 2011-2016 11
Table: Canada Pork Production & Consumption, 2011-2016 11
Table: Canada Beef & Veal Production & Consumption, 2011-2016 11
Table: Canada Poultry Production & Consumption, 2008-2012 15
Table: Canada Pork Production & Consumption, 2008-2012 15
Table: Canada Beef & Veal Production & Consumption, 2008-2012 16
Canada Dairy Outlook 17
Table: Canada Milk Production & Consumption, 2011-2016 18
Table: Canada Butter Production & Consumption, 2011-2016 18
Table: Canada Cheese Production & Consumption, 2011-2016 18
Table: Canada Milk Production & Consumption, 2008-2012 20
Table: Canada Butter Production & Consumption, 2008-2012 20
Table: Canada Cheese Production & Consumption, 2008-2012 21
Canada Grains Outlook 21
Table: Canada Wheat Production & Consumption, 2011-2016 22
Table: Canada Corn Production & Consumption, 2011-2016 22
Table: Canada Barley Production & Consumption, 2011-2016 23
Table: Canada Wheat Production, Consumption And Trade, 2008-2012 27
Table: Canada Corn Production, Consumption And Trade, 2008-2012 27
Table: Canada Barley Production, Consumption And Trade, 2008-2012 27
Commodity Price Analysis 29
Monthly Softs Update 29
Cocoa: Momentum Waning 30
Coffee: Temporary Rally 31
Cotton: Forming A Base 32
Palm Oil: Underperforming The Complex 33
Sugar: Scope For A Moderate Rebound 35
Table: Select Commodities: Performance & Forecasts 36
Monthly Grains Update 38
Wheat: Little Relief From Southern Hemisphere 39
Corn: Looking The Weakest 40
Soybean: Prices To Stay Relatively Supported 42
Rice: Still The Underperformer 43
Table: Select Commodities: Performance & Forecasts 45
Upstream Analysis 46
Americas GM Outlook 46
Americas Machinery Outlook 50
Americas Fertiliser Outlook 53
Canada Agribusiness Report Q4 2012
© Business Monitor International Ltd
Page 4
Downstream Analysis 57
Food 57
Food Consumption 57
Table: Food Consumption Indicators – Historical Data & Forecasts, 2009-2016 57
Confectionery 58
Table: Confectionery Value/Volume Sales – Historical Data & Forecasts, 2009-2016 59
Prepared Food 59
Table: Canned Food Value/Volume Sales – Historical Data & Forecasts, 2009-2016 60
Table: Fish, 2009-2016 60
Table: Frozen Fruit & Vegetables, 2009-2016 61
Table: Oils & Fats, 2009-2016 62
Drink 63
Alcoholic Drinks 63
Table: Alcoholic Drink Value/Volume Sales – Historical Data & Forecasts, 2009-2016 64
Table: Alcoholic Drinks, 2009-2016 65
Hot Drinks 66
Table: Hot Drinks Value Sales – Historical Data & Forecasts, 2009-2016 67
Soft Drinks 67
Table: Soft Drink Value Sales – Historical Data & Forecasts, 2009-2016 67
Mass Grocery Retail 68
Table: Mass Grocery Retail Sales By Retail Format Type (%), 2010-2020 69
Trade 69
Table: Trade Indicators – Historical Data & Forecasts, 2009-2016 69
Country Snapshot 70
Table: Canada’s Population By Age Group, 1990-2020 (‘000) 71
Table: Canada’s Population By Age Group, 1990-2020 (% of total) 72
Table: Canada’s Key Population Ratios, 1990-2020 73
Table: Canada’s Rural And Urban Population, 1990-2020 73
Our Forecast Modelling
74
How We Generate Our Industry Forecasts 74
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