COVID-19 may hurt Canadian farmers in the future, but for most commodities, other than cattle, there hasn’t been a huge impact, says Agriculture and Agri-Food Minister Marie-Claude Bibeau.
“Actually the food sector might be one of those that will be the least impacted because we will keep eating during the crisis so I don’t see any concrete impact except the complication in terms of getting people to work (in the food chain) and being asked by certain suppliers to be paid quicker,” Bibeau said during a news conference March 23.
Bruce Burnett, director of markets and weather at MarketsFarm, agrees. Oil prices have fallen up to 70 per cent recently, while grain futures markets are down about five per cent, he said. Grain markets were side-swiped by hedge funds adjusting their portfolios following the stock market crash, he added.
The demand for agricultural product really hasn’t changed because of COVID-19.
“People still have to eat,” Burnett said.
Oil prices, stock values and the Canadian dollar are down because of COVID-19. But a lower dollar has boosted Canadian grain prices, which are traded in American dollars, he said.
Farmers are facing harder times — a trend that started eight or nine years ago as world grain production started creeping up relative to demand, Burnett said.
Last year’s tough harvest added to farmers’ woes.
“Right now the reality is we’re still shipping grain, we’re shipping cattle, the milk, egg and poultry producer, there is good demand,” Farm Credit Canada’s president and CEO Michael Hoffort said in an interview. “It’s not normal business, but I think we’re as close to normal as you could expect for the circumstances in the ag business. So how do we keep that going and how do we maintain this structured food production and food processing for our own citizens and those around the world who are demanding our products right now?”
Despite tightening margins, Canadian farmers’ balance sheets are generally strong, Hoffort said.
“That overall creates industry strength,” he said. “Our book, from a repayment perspective, was very similar to previous years so very, very clean, and it wasn’t lost on us — we received some tighter profitability on the operations when we were getting their (farmers’) financial statements updated in the last 12 months.”