Archive for the ‘economy’ Category

American Dairymen Have the Blues

September 17, 2009

The US dairy industry is really struggling to survive. Milk prices are depreciated which is causing significant financial hardship. In Canada, this seems to a bit of a foreign concept considering that Canadian dairies are supply managed. The current situation will definitely provide argument from the US to file to WTO and will entice Canadian dairyman to fight even harder to keep their sacred quota. It is no doubt that Canada’s quota system will be coming up on many occasions as the US negotiates any sort of agricultural trade. I think that it is going to become ever more difficult for the Canadian dairy industry to justify internationally the supply managed concept. In Canada, if I was a dairy farmer I would fight with every last breathe to hold on to the quota system so that I could avoid the situation the US is in.

Whether it is the economy, demand supply or other factors, the US dairy industry needs to stabilize because milk products are so integral to the foundation of human health. Please support your local dairy and drink milk eat cheese.

On a humorous note, here is a video by Will Gilmer of Alabama, who tells us why his dairy has the blues during this hard financial time for the industry.

Advertisements

ILC 2009: Glen Hodgson – What Can We Expect for the Economy, Interest Rates and the Currency Market

July 16, 2009

In talking to Glen Hodgson of the Conference Board of Canada  at the International Livestock Congress, I felt somewhat better about the economy and the outlook through the next 12 months.  Glen is the Chief Economist with the Conference Board of Canada which is Canada’s largest think tank.  In this video, Glen comments on the global recession, the future of interest rates and the volatility of the currency market.  

Check out more ILC 2009 content

Bill Lapp — Advanced Economic Solutions — Discusses the Commmodity Market Outlook

March 9, 2009

I just listened to Bill Lapp, an economist with Advanced Economic Solutions speak about the outlook for commodities in Edmonton. Lapp was very interesting, candid and provided great insight into the commodity market.

The key points that Lapp focused on were:

  • Brazil, Russia, India and China have led the world growth over the last 10 years.
  • The rising US deficit is going to be an ongoing concern. As the US dollar weakens commodities should strengthen.
  • Commodities tend to jump and then plateau. He showed a chart of corn prices back to the 1800’s and showed the group that this has been in case with corn over history.
  • World coarse grain usage is now rising much faster than long term gains. The result is going to be acre battles between major crops. For example, corn and soybeans.
  • The ethanol industry in the US has moved from the gold rush to significant financial issues. Currently, 20% of the ethanol production capacity is idle in the US.
  • The US cattle and chicken industries are under significant financial pressure.
  • Food use of soy oil is going to decline in the US for the fourth consecutive year due to the growth of canola and palm oil. In the US consumers view, canola is a healthier oil.
  • The North American recession has created real financial trauma. The longer the economy is slow, the more likely the US moves to a protectionist agenda of which Lapp is extremely concerned about.

    If you are ever presented with the opportunity to hear Bill Lapp speak I encourage you to attend.

Part 2: Jay Bradshaw – Syngenta – How the Farm Customer Base is Changing and the Commodity Price Outlook

February 20, 2009

This is part two of my interview with Jay Bradshaw from Syngenta Canada. In this interview Jay discusses Syngenta’s strategy in Canada and how the decreasing amount of farmers is changing Canadian agriculture. Jay also talks about commodity prices over the last two years and what he thinks farmers can expect in the future.

Vilsack and Obama Continue Protectionist Plan

February 19, 2009

Today, President Obama visits Canada and sits down with Prime Minister Harper. Currently, the Democrats are using the poor economy as an excuse to push their protectionist agenda forward. Canada and Mexico need to be very aware of what is transpiring and how it will affect agriculture in the future. Please do not think that the steel and iron “Buy American” clause incident two weeks ago will be an isolated incident. Did you see 60 minutes last week? Check out this link to the video and listen to the protectionist rhetoric by the CEO of Nucor.

We need our political leaders to in the US and Canada to work together during this hard economic time. Based on the fact that Canada and the US share the longest open border in the world, there is large amounts of trade between the two countries. As stated on the CBC National last night, there is a lot of trade that is actual business to business collaboration which benefits both economies. After the Vilsack announcement yesterday, the protectionist objectives of the new US administration is very clear and becoming more of a main stream concern. It drives me crazy to watch the TV and see people in Canada cheering Obama as he drives the streets of Ottawa like it is a rock concert. President Obama in his short term in office is appearing to be a real threat to our ability to trade with our largest trading partner, the United States. Canadian agriculture requires trade with the United States to thrive and we desperately need the US to reconsider its protectionist agenda so that both countries can prosper in the long term.

Other links:
See what Harry Siemens said about Vilsacks comments

Part 1 – Jay Bradshaw – Syngenta Canada – Optimism in Canadian Agriculture and Who is the Canadian Farmer

February 3, 2009

Today I had a chance to talk to Jay Bradshaw, President of Syngenta Canada in his office in Guelph, Ontario. This is part 1 of several clips that I will be posting from my interview with Jay. In this clip, I asked Jay if there was reason for Canadian farmers to be optimistic in 2009 based on what is in the news regarding the economy and the volatility of 2008. We also discussed the characteristics of the Canadian farmer and what advantages that provides Canadian agriculture in general.

Jay has been in the leadership position at Syngenta Canada for 7 years and has increased the Canadian business significantly over that period of time. The full interview will be posted in two weeks when I return from Chile.

Tiffin Conference – Larry Hicks – Managing Risk in the Beef Business

January 23, 2009

Larry Hicks of Cattlehedging.com was one of the keynote speakers at the Tiffin Conference yesterday in Lethbridge. Larry spoke about the necessity of risk management in the beef business. Larry very clearly outlined what hedging is and that there is much more involved than calling your broker to buy or sell futures contracts. He emphasized that you must have a hedging plan in order to really obtain success.

I had a chance to sit down with Larry before his Tiffin speech to discuss some of the pressing issues in the beef business and get a better idea of how he views the beef business going forward.

Tiffin Conference – John Scott – The Grocery Business is Changing

January 22, 2009

John Scott, President, Canadian Federation of Independent Grocers, spoke on the grocery market this morning in Lethbridge Alberta at the Tiffin Conference. John emphasized that grocers are trying to “be something” to the consumer. He emphasized that consumers are going to different stores to get different products. When I think my families purchasing habits we buy different products at different stores which apparently is common. Rarely do we purchase all of our food products at the same retail point.

“You [the grocer] must differentiate yourself or you are really going to struggle,” John Scott told the crowd. He continued by saying, “As a grocer you cannot be everything to all people.”

John also stated that large grocery chains are not grocery stores but are health and wellness stores now. There is a focus on health and wellness for people 18-33 year olds. If you are marketing a food product, you need to be willing to ensure that your products fits the trend towards health a wellness. To me this explains the recent trend of full service counters with chefs and nutritionists behind the beef counter. John told the crowd that nutritionists in the grocery store is a fast growing market in Canada. In my mind, this is much different than the traditional butcher look and feel. Meat has been not represented well at the counter in the past. When buying meat people do not want to see a butcher dressed in a blood soaked apron. It makes you wonder why we stopped there? Why not show the slaughter of the animal right in the store? Sounds appetizing doesn’t it.

John stated that, “the chain has to work together in a collaborative fashion to make sure that the beef industry is promoted effectively.” He stated that, “it is not the sole responsibility of one member of the chain.” I agree with John that expecting government to carry this role is wrong. The industry has to lead the charge, but as we all know getting the whole value chain on the same page is quite difficult and easier said than done.

Scott also mentioned that buying local is not going away. The consumer’s environmental sustainability focus will not be changed by the current recession. The”echo” consumers are pushing things like buying local that is changing the way beef and all food is marketed.

I thinks that John’s message of health and wellness is right on. This is one mistake the beef business has made in trying to market 16oz steaks to today’s consumer. The beef industry must continue to adjust and promote the healthy characteristics of beef and try to break the negative perceptions that are prevalent in the marketplace.

Risk, Currency and the Canadian Dollar

January 15, 2009

Risk is well known board game, played on a map of the world, in which players effectively bet (take on calculated risk) and play to take over more and more countries and ultimately rule the world.

I am just musing here, but if you were taking stock of countries and their respective currencies, would it be wrong to consider a common sense sort of bird’s eye view of the countries in the world in say five different categories and give strong consideration to the impact of the results of such an exercise?

I would consider:

  1. current status (stage and reputation in economic development and world reputation),
  2. political climate (democratic, responsible, international reputation/relations and involvement, the people/voters)
  3. resources (educated or trained people , access to credit/money, water, food production, oil, metals, minerals, lumber etc)
  4. institutional infrastructure and resources (stability of financial institutions, existence of or ability to create education/training to meet needs)
  5. location (ocean ports, proximity/access to significant markets).

It is hard for me to imagine a combined assessment of the above comparing Canada against most countries in the world, would be anything but in favour of Canada. In a time of growing world population, there is surely going to be an opportunity, a reliance even, on Canada to be a significant contributor in the world economy.

I often run strategic business decisions through a “what if gauntlet” to see how they survive different scenarios. So if this kind of assessment makes sense to you like it does to me, maybe some thought in your business should be given to business and managing risk in an environment where in the long term the Canadian Dollar trades much closer to par with the US Dollar than the flirting with the 70’s that it has been doing recently. Just a thought……

Crop Week – What Farm Credit Canada is Hearing

January 13, 2009

In my role at Haney Farms, I get to chat with many farmers from across the country which allows me to keep my finger on the pulse of the farming community. Another great way to further understand the pulse or the issues of farmers is to talk to equipment dealers, grain buyers and financiers to name few. At the Crop Production Show I chatted with Denton McGregor, Relationship Manager at Farm Credit Canada in Saskatoon to get his read on the current situation and what he is hearing from his clients.
Denton also talks about Ag Day in Canada which is hosted by Farm Credit Canada on January 28th. If the video does not embed properly in your browser click here for the video.