Canadian Farmers Will Benefit from Increased Global Food Trade

Contributed by Lutz Foerster

 

Personally I believe Canadian farmers will benefit from increased global trade. Why? Well the reasons are quite simple, yet in my eyes they are valid. Canada is a a highly developed country. In these countries the demographic statistics tend to indicate only very little population growth. This is important for Canadian farmers as the domestic population might lose its significance as a market, because we will not have enough consumers. Therefore our produce is sold abroad. Other countries are economically growing, and so is there population. Demand in our in country, unless the production of crop based biomass becomes more popular, will not necessarily rise. In other countries although, demand will rise, opening new markets for us. This new demand, which we are already noticing in the markets this year, must be captured by us. The global market gives us an opportunity, if we market our produce correctly, to capture positive market swings which would likely not even exist without access to global markets. This year and the last part of last year showed us how beneficial global markets are to us. Although yields for the traditional commodities were high in Ontario this year, we were, or still are, able to sell our grain for good prices, as supply from the other producing countries was lower than usual. Although it must be said that prior to this recent market rally, commodity prices were lower than we would have liked them to be. Of course this shows how global markets may work against us. To protect ourselves against a market with low prices, the best thing we can do is market our produce correctly. So a farmer can successfully market his crops, he must be on the verge of the market and world news all the time. Markets will have to be followed closer, and it must be learned what influences them. We also need to learn how to control our greed. Set the price where we can make a profit and start selling new crop at that point to secure income. This way we can sell our crops at an average price catching most of the high, but not dropping to far in the low. It is also important to look at the market when purchasing inputs. High market prices will result in rising input costs. If prices are predicted to rise, the early purchase of inputs is an important thing to consider. It might mean that you have to take up credit, but in the long run, the possibility of saving a lot of money is there.

As the world keeps turning, global commodity markets become more complex with more influencing factors. To keep up with this we will need to constantly keep educating ourselves and not be ignorant to our surroundings. I believe if we use the tools the market gives us, we will be able to benefit from global trade.

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