Farmscape for April 6, 2020
The Chief Agricultural Economist with Farm Credit Canada encourages Canada's red meat producers to focus on strategies that will allow them to ride out the short term economic impact of COVID-19.
In response to changing global economic dynamics resulting from efforts to contain the spread of COVID-19, Farm Credit Canada has updated its 2020 Outlook for Canada's Red Meat Sector.
FCC Chief Agricultural Economist J.P. Gervais says, while we can expect average cattle and hog prices throughout 2020 to largely stabilize close to average 2019 prices, their current drop relative to the five year average reflects anticipated changes in consumption and highlights the plight plaguing the sector.
Clip-J.P. Gervais-Farm Credit Canada:
Definitely the outlook is tighter than what it has been at the beginning of the year.
We were going into 2020 very positive about what the year could look like and then we had the crisis and we had a few other factors that brought prices down and so short term I think the outlook is not as good as it was in the beginning of the year.
The big question is the length and the magnitude.
We talk about smoothing the disease curve, the pace at which the disease is moving throughout the country.
In some ways as well we should be talking about smoothing the economic curve, making sure that we minimise losses in the short term for our businesses to be able to last and then to thrive once we have a rebound because I really do think that we are going to have a rebound.
If you think of red meat, there's going to be a rebound in red meat as well.
It's just a question of timing.
How long are we going to be in this situation as well as to what extent things are going to get better or worse and how fast?
That's really the unknown right now but short term there's definitely some economic pain on the horizon but I know that there's going to be a rebound and I know that fundamentally the demand for red meat was very strong before we began the crisis and I see no reason to believe that it's going to be otherwise on the other side of the crisis.
Gervais observes we have a very resilient supply chain and he is optimistic the challenges that will come our way will be met with some very creative solutions.
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