In our January 2020 Grains, Oilseeds and Pulses Outlook, we identified three major trends to affect profitability for the sector:
- Trade tensions’ influence on the global economy and agri-food markets
- African Swine Fever’s (ASF) disruption of livestock and meat markets
- Large global supplies amid challenging growing conditions for crops
How did we do in the first half of the year?
The COVID-19 pandemic triggered a global recession, highlighted by severe supply chain disruptions, including reductions in processing capacity and plant shutdowns. Despite these challenges, trade of Canadian grains, oilseeds and pulses has performed well in the first half of 2020.
According to the Canadian Grain Commission, producer deliveries were 13.5% higher year-to-date (YTD) and exports 8.1% higher. Exports are competing with a strong domestic demand: AAFC projects domestic use of principal field crops in the 2019-20 crop year to be 3% higher than last year.
Global trade tensions continued to weigh on markets. In January, China and ;the U.S. agreed to a Phase 1 trade deal, which called for the export value of U.S. farm products to China to increase by 50% relative to 2017. Yet, it looks as if China won’t meet its ambitious target – even if their recent purchases of corn, wheat and sorghum have been aggressive. Canada - China trade relations remained lukewarm. Conversely, a reduction of Indian tariffs on Canadian exports of lentils provided a boost to lentil demand.Click here to see more...