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Canada agribusiness

Canadian agricultural production will continue to experience only moderate growth over the medium term, largely due to increasing competition for export markets and relatively small domestic demand growth. The government is helping the sector through both investments in production (for beef) and tariffs for imports (poultry). However, beef production is forecast to decline over the medium term, while poultry production will still not run a surplus in 2014/15. Indeed, only corn and soybean show potential for significant growth over the medium term - mainly due to increasing poultry production. One bright spot, however, will be the increasing growth of the country's value-added dairy sector. Wheat production growth to 2014/15: 2% to 25mn tonnes. This will mainly be due to greater export competition from new global players, particularly Russia, as well as some farmers switching to soybean production due to its hardier nature. Sugar consumption growth to 2015: -5% to 1.4mn tonnes. This will largely come from government efforts to lower sugar consumption on the back of rising obesity concerns. Poultry production growth to 2014/15: 11% to 1.34mn tonnes. This will come from consumption increases due to the perceived healthier nature of poultry, along with greater export opportunities, which have been rising in recent years. Canada will likely remain a net poultry importer over the medium term, with a quota system currently in place to manage those imports. 2010 Real GDP Growth: 3.1% (up from -2.6% in 2009; predicted to average 2.8% from 2010 until 2015). Industry Developments In an effort to help the struggling beef sector, the Canadian government announced a raft of initiatives. Among these, it established a CAD3mn fund to support the beef industry. The investment, which follows the Government of British Columbia (BC)'s CAD2mn investment that will fund projects recommended by BC's Ranching Task Force, will aid the sector through developing new marketing opportunities to help farmers and food processors increase their revenues. Another initiative is the joint Abattoir Competitiveness Program, which will provide CAD25mn to help Canadian cattle slaughterhouses maintain critical capacity for two and a half year old calves. In 2010/11, we are forecasting pork production to fall slightly again to 1.83mn tonnes. One factor for this is a generally favourable outlook for the Canadian economy has put pressure on the Canadian central bank to lift interest rates, which should strengthen the Canadian dollar. This could lead to exports being less competitive. This is especially concerning since most of Canada's exports go to the United States, which is experiencing a weakened dollar on the back of the Federal Reserve Bank's decision to inject further liquidity into the market in early November. Between 1999 and 2003, an estimated 61% of total immigrants came from Asia. By 2017, it is expected that 22% of Canadians will have been born outside the country. By 2031, immigrants from South Asia, including India, Pakistan and Bangladesh, will become the country's largest visible minority group in Canada at 28%. These groups will continue to introduce new trends to Canadian cuisine and up to now consumers have shown a preference for many of the ethnic foods that these groups have brought. This will lead the country to have strong rice consumption growth over the medium term.

by S. C.
30 july 2011, World News > America

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