Agriculture North of the Border

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A couple weeks ago I trekked to Saskatchewan to be part of the RBC Royal Bank of Canada Speaking Series. Saskatchewan is now known as Saska-boom because it is currently the most positive economic province in Canada. After many years of lethargic or slow growth, world events, along with changes in government rulings on land ownership, have positioned the province as a global economic strategic player. However, the province of Saskatchewan has rich resources in uranium and this stock has plunged dramatically because of the events in Japan.

Speaking stops in Moose Jaw (I love that name) and Saskatoon, and a meeting with the Ministry of Agriculture and other agribusiness leaders, along with numerous TV, radio, and media interviews made for an exhausting but rewarding trip north of the border. By the way, a visit to Moose Jaw should be on everyone's Bucket List. The gangster, Al Capone, used this town as a retreat, and a tour through the underground tunnels would be a fun event in the summer.

In Saskatchewan, agricultural producers are struggling with too much moisture, which has hindered both planting and harvest. The concept of no-till was envisioned in this province, and many producers have been moving toward irrigation since the province has an abundance of water.

It was interesting that a producer agribusiness group was impacted by the turmoil in Libya. A large shipment of pulse and oilseed destined for Libya was seriously devalued because of lack of access to the port. This is a classic example of a black swan or unusual event that can impact both cash flow and profits.

The Canadians were interested in what would happen to the next farm bill in the U.S. My comment was that support will be reduced and altered dramatically.

Canadians were very concerned about supply management, for example, quotas used in milk, poultry and other enterprises and whether the World Trade Organization’s rulings would change it. Earlier in the week while in Madison, WI, at the PDPW Business Conference, many dairy producers were considering this concept for future dairy policy in the U.S.

 

Observations from both sides of the border

  • More youth and women at my winter speaking events.
  • Many lifelong learners interested in global events’ impact on their business.
  • Concern about the economic health of the livestock industry.
  • Food vs. fuel debate as events in the Middle East and Asia are impacting public perception. This issue is heightened with 24-7 worldwide media.

Crisscrossing strategies between the U.S. and Canada could result in “one and one equaling three” through the advantages of collaboration. Short run cycles and political agendas on both sides of the border sometimes break down the obvious.

 

Editor’s note: Dave Kohl, Corn & Soybean Digest trends editor, is an ag economist specializing in business management and ag finance. He recently retired from Virginia Tech, but continues to conduct applied research and travel extensively in the U.S. and Canada, teaching ag and banking seminars and speaking to producer and agribusiness groups. He can be reached at sullylab@vt.edu.

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