Views From Canada

I had the opportunity to spend a week in Western Canada recently. Sometimes we take our neighbors to the north for granted, but they are the U.S.’s biggest trading partner. The U.S. is also the biggest foreign investor in Canada, over 50%, followed by England and Germany.

The province of Alberta, north of Montana, is becoming very wealthy. The whole area from south of Calgary up to the Yukon border is oil patch rich. This is definitely impacting farming and ranching. First, the midsized farms are able to continue in business because of increased land values due to the oil wealth.

Some farmers are able to work in the oil patch. Starting wages are about $30/hour (Canadian), thus many youngsters are quitting school or foregoing college to work in the energy industry. If only these kids would realize that it won’t last forever and similar circumstances occurred in the 1970s followed by a bust in the 1980s.

Producers are being squeezed by fuel and energy and a rise in interest rates. Labor is a real problem because of the demands from the oil fields. The beef industry has rebounded and is doing very well, moving to more value added through an organic and natural focus, which the consumer is demanding.

Side Notes:

· Gasoline prices are $4-4.25/gal. in some areas.

· The Canadian government is showing a surplus.

· The average home price in Calgary is $414,000 – sounds like California.

· Calgary is the youngest and most highly educated city in North America.