May 25th, 2015
The landscape of Canadian farming is always changing. Global trends affect the daily operations of even the most rural and insulated farms. In biology, the phrase “adapt or die” is a harsh but constant truth.
Predicting where trends in agriculture are taking us may be harder than guessing what the weather will bring in the next growing season, but following the trends in Canadian agriculture is the best way to protect yourself, and flush out business opportunities.
Erosion of Farmers
The erosion in the agriculture industry we are talking about isn’t about topsoil, it’s about people. Census information shows us the number of farms, and farmers, is declining roughly 1% per year. While 1% may sound like a small number, that is 4,000 people who left farming in Canada this year.
Meanwhile, the number of acres in production remains relatively constant. What that translates into is a set of bigger farms operated by less people.
To what opportunities does this trend lead in the farm industry?
While there is a huge inclination in Canada to preserve the family farm, there is no reason that family farms can’t embrace economies of scale, efficiency, and creative marketing to remain profitable. Farmers today must be more than just producers; they must be their own marketers.
Global Warming in Canada
A team of academics from Columbia and Stanford Universities recently estimated that climate change caused wheat and corn yields to drop about 5%, or the equivalent of the Mexican corn harvest. Canadian farmers were largely insulated from this effect, perhaps because our northern climate is more resilient to warming.
The result of this reduced supply was of course price increases, up to 20%, and increases in soybean and rice prices as well as they took up the market slack.
The trend highlights two important needs for the Canadian agriculture industry.
Increasing Farm Efficiency
One way is to remain committed to increasing the efficiency of farms, to combat potential yield losses caused by global warming. Increasing resilience is always good, especially resilience from fluctuating oil prices, which might have dropped recently, but will only become more volatile as oil runs out.
Predicting Market Opportunities
The other strategy is to try and anticipate which crops will suffer most globally, to try and take advantage of the higher prices caused by higher demand. Farmers are no strangers to the uncertainty of the future. While there are no guarantees in life, factoring climate change into the equation only makes sense.
Trends in Canadian Agriculture
Global warming and the erosion of the number of farmers are lead to similar coping strategies. As crop yields and farmers per acre go down, operational efficiency must go up. It is no longer viable to “plateau” at an acceptable level of efficiency. What was “good” yesterday simply won’t cut it tomorrow. Creative marketing is another strategy of resilience. Direct marketing and adding value to basic products through secondary processing can both help preserve a healthy bottom line. Keeping an eye on not just the weather, but also the effects of climate change on agricultural commodities is now an important part of the landscape of keeping ahead of trends in Canadian agriculture. Check out this program that provides government funding for businesses in the agricultural sector for marketing.