Crop prices are expected to remain strong well into 2013, and that means continued challenges for the Canadian livestock sector.
"This is likely going to be a period of strong prices, right through next year. It's going to take a while to recover from the impact of the drought in the US, so things are looking fairly positive there," says Ron Bonnett, president of the Canadian Federation of Agriculture, looking ahead to 2013.
That translates into high feed prices in other ag sectors.
"The big issue in 2013 will be the livestock sector adapting to high feed prices and trying to build profitability back into those operations. The feedlot sector and the hog sector have really had their margins stretched," he says. "We need to watch how we carry over through this tough period as prices adjust to a new level, because when you look in the long term, Canada is well-positioned to be the supplier of choice for increasing demand, particularly in Asian countries. We have to make sure we take steps to make sure we don't lose the core infrastructure."
2013 will also see the beginning of a new five-year agricultural policy framework, as Growing Forward 2 will come into effect on April 1st.
"We're watching to see how the details unfold with the non-business risk management programs. There's a lot more focus on innovation and research," notes Bonnett. "Each of the provinces will likely be customizing some of the programs to meet needs in their areas so that's going to be something to watch."