It’s been another week of surprises.
Who’d have thought we’d see gasoline prices below 60 cents a litre again?
Who’d have thought we’d see the federal government backstopping 75 per cent of the wage bill for the entire country?
Who’d have guessed the concept of a universal basic income would suddenly be on the minds of many?
Who’d have ever thought that we’d see empty store shelves in Canada? And be unable to buy grocery basics like potatoes and flour? Or having to line up and wait to gain entry to the store itself?
That was something for socialist dictatorships, as they circled the global geopolitical drain, not a modern market economy like Canada.
And who’d have ever thought that the status of the Canada-U.S. boundary as the “longest undefended border in the world” would seriously be under threat?
Who would have imagined that grocery clerks, janitors and truck drivers would suddenly reveal themselves as vital cogs in the economy after decades of being viewed as semi-disposable?
We are clearly, as the saying goes, ‘living in interesting times.’
But for all the uncertainty that we’re facing, the agriculture sector can draw some real comfort in the resilience it’s demonstrating, the importance with which it is being viewed and the way people have reached, reflexively, for familiar sustenance in their time of troubles.
For a country where agriculture has, in the eyes of many, been viewed as a quaint relic of our time as “hewers of wood and drawers of water” to use the familiar phrase, it’s now being seen as what it really is: a fundamental pillar of our economy and a vital link to the world.
Perhaps farmers too could enjoy a new level of respect from the general public, a public that had, in recent years, become more critical of the sector’s activities.
While it’s always important to pay attention to criticism and strive for improvement, it may be that the nation’s farmers find themselves conversing with a more sympathetic audience in the future.
It’s also entirely possible the sector could weather the storm better than many other parts of the economy will. One of the benefits of being a basic building block of the economy is that it’s also one of the most durable.
As more than one person has observed as the economic waves (or tsunamis) have rippled out, people still have to eat. More than many other sectors, demand will remain durable for food.
There are some storm clouds of course, such as lower ethanol production due to lower demand for gasoline. But that also seems to have been, at least temporarily, offset by higher demand as consumers stockpile food and other supplies to wait out the pandemic at home.
Looking forward to the recovery — and recovery will inevitably come — agriculture could also again find itself in an admirable position.
The unique position the sector finds itself in can be seen in this chart from MarketsFarm’s Bruce Burnett, that shows the relative price fall of all the various global financial markets, including other commodities and some stock market indexes.
Oil led the losses, unsurprisingly, show a 64 per cent hit over the course of the calendar year. COVID-19 has battered global demand for energy at the same time that Russia and Saudi Arabia are engaged in a brutal price war.
The major stock indexes were falling fast too. The Dow Jones Industrial Average and the Toronto Stock Exchange’s TSX index were both off by a quarter.
Copper, the metal that’s seen by many as a proxy for global economic prospects, was also off by about 25 per cent.
Going down the chart, the losses become smaller. Wheat, for example, did take a hit, but losses were only eight per cent. Canola lost about six per cent.
And gold, long considered the reflexive safe haven in times of economic storm, was off three per cent itself. The numbers suggest agriculture will remain strong.
Another great asset of agriculture is one that doesn’t fit quite so neatly onto a spreadsheet — the resilience and adaptability of the people living and working in it.
They’re a group to whom social distancing and economic uncertainty are a way of life. They’re quick thinkers and fast to adapt to changing conditions.
All of these brush strokes combine to paint a picture of a very well-positioned sector. It is entirely conceivable to envision a future where agriculture will be seen as a safe haven on par with gold.
That’s not entirely new; after all, in the years following the 2008 financial crisis, agriculture enjoyed some very successful years.
Whether or not that happens again is far from certain, but in these uncertain times there are worse positions to be in than that of a farmer in Western Canada.