There is a lot of excitement in Canadian agriculture today.
From the tremendous increase in farmland values to food processing — Canada is a country that has it all! In all my travel, I have never met a person who did not want to live, farm, visit or be educated in Canada. The ultimate destination, we are considered one of the five breadbaskets of the world.
What makes up the fantastic business we call agriculture and what drives it?
Our vast landscape may be seen as a bit of a handicap to us, but that looks like a world of opportunity to foreign investors. As crop and livestock receipts strengthen, domestic interest in land is also fuelled and that creates a competitive situation. Farmers wisely look at the low interest rates and determine that with a growing global population, the need for agricultural products will increase. This is also true for grasslands as the value of the carbon sequestration is part of the price.
Farm Credit Canada reported that the national increase in farmland value in Canada in 2013 was 22.1 per cent, with Saskatchewan at 28.5 per cent and Manitoba at 25.6 per cent. I am not surprised as both domestic and foreign investors love the opportunity presented by a virtually untapped resource. (Manitoba or Saskatchewan residents may feel a little crowded but the truth is they have more opportunity than any space left on earth.) Alberta farmland values slowed to a 12.9 per cent increase.
Although primary farming accounts for 1.7 per cent of GDP, Canadian farmers are backed by a food-processing industry that uses 40 per cent of primary product and is the leading sector in terms of employment and GDP — greater than auto manufacturing. Food companies come to Canada, often settling in Quebec, to take advantage of our corporate system of taxation and they contribute to our trade. Canada is the sixth-largest importer and exporter of food in the world, sending more than $40 billion of food product out the door each year. (Although Canadians continue to source 30 per cent of their diet from imported foods.)
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Our domestic wealth allows for Canadians to consume what they want and that is usually more than 3,300 calories per day or $181 billion a year on food, drink and smokes. This is still less than 10 per cent of disposable income, so the domestic market, although rich with calories, has room to grow. On the flip side, the diversity within the country presents a great opportunity for stretching outside of traditional crops. This is particularly evident in Ontario, where ethnic diversity drives crop decisions. Ethnic demand and investment also contributed to Ontario farmland values which increased by 15.9 per cent in 2013.
Consumer demand comes from several camps. Farmers in Canada have responded, with many going back to the small-farm model and basic production practices to capture the niche markets. These farms are strong on relationships and are in the face of the consumer. They are young farmers and those in their 50s who are coming to the farm as a second career. These small farms also use modern technology and innovation for further value adding and are often spectacular when it comes to social media.
Big farms are family farms, too — 98 per cent are family operations — there is a great interest in science and technology, innovation, and marketing power on these larger farms. Canadian farmers are savvy and open minded to using the benefits of research to enhance their production. These farms often contribute to commodity export, but that is changing now too with farmers investing in further processing and owning part of the food production pie. This is good news for Canada as we need to fill in the food trade deficit as the last outstanding line in an otherwise page turner of a story.
We know that our marketing infrastructure is broken, but that can be fixed. We know that we have a processed food deficit, but many farms and firms are now engaged in closing that gap. More importantly we know we have great land and lots of it, tremendous talent in our people, great consumers, access to science and technology, a licence to export and an unlimited global client base.
Life is good.
The enthusiasm for agriculture that I have seen worldwide, even in the poorest of countries, is just starting to germinate in Canada. What I have heard is farmers repeatedly expressing their importance to society. They have a direct thought line from the crop in the field to the food on the table. That is what ag is all about. The importance of you and I as farmers — for the greater good of Canadian society.
This is our story and it is worth telling!