Download Diapositive 1 - Canadian Federation of Agriculture

WORLD AGRICULTURAL SITUATION
Niagara Falls, October 2009
Farmers had a miserable time in
2008 and early 2009
 Scarce credit owing to banking crisis
 Reduced demand owing to recession
 Fall in trade with product backed up on
domestic markets
 Collapse in commodity prices in 2nd half
2008
 High input prices especially for fuel,
fertiliser and feed
Global Recovery 2009-2010
 World emerging from
deepest recession in 60
years
 Recovery led by Asia
 Massive intervention by
govts. to stimulate
economic activity
Economic Growth-advanced economies
Economic Growth–developing countries
Real GDP Growth (%)
– World & Advanced countries
Source: IMF
Recovery in the BRIC Countries
Trade and commodity prices are
recovering
 Trade is picking up
especially with Asia
Commodity prices
are recovering
Food and
agriculture was
more resilient to
the recession than
other sectors
Trade volume & Commodity prices
(% changes)
Developing countries driving
growth in farm exports
Export growth from 2006-08 average to 2018
60
50
40
30
%
20
10
0
-10
Wheat
Coarse
grains
Oilseeds
OECD
Sugar
Pigmeat
Non-OECD
Poultry
World
SMP
Exchange rate movements
(Index 2000=100)
Major currencies
Emerging and
developing economies
Commodity Price Developments
Commodity and Petroleum Prices
Impact on farmers

Oil prices rising
faster than food
prices

Low inflation &
interest rates

Large govt. fiscal
imbalances

Stable food and
agric. markets
Inflation & Interest Rates
Government Fiscal Balances
(% GDP)
Source: IMF
Major Food Crops - prices
Source: IMF
Major Food Crops - stocks
2) Corn, soybeans wheat, rice. Source: IMF
Major Food Crops - demand
Source: IMF
Major Food Crops - biofuel
Source: IMF
EU
Demand for vegetable oil
2018
USA
2006-08
2018
Indonesia
2006-08
non-biofuel use
2018
biofuel use
2006-08
0
5
10
15
20
Million tonnes
Source: OECD
25
30
35
Meat & Dairy prices
Source: OECD
Meat consumption increases are
mainly in developing countries
350000
Sheep
250000
200000
Poultry
150000
Pork
100000
50000
Beef
OECD
Source: OECD
non-OECD
2018
2006-2008
2018
2006-2008
2018
0
2006-2008
thousand tonnes
300000
WORLD
Policy needs
 Correct fiscal imbalances
 Increase investment in agriculture
 Incentives to mitigate and adapt to
climate change
 Strengthen banking regulations to reduce
excessive risk taking
Strengthen competition policy especially in
retail distribution sector
 Include risk management instruments in
farm programs
Conclusions
 The world economy is growing again –
along with trade - but growth is slow and
uncertain
 Farm commodity markets are
strengthening
 However, credit to remain tight; weather
patterns irregular
Overall the future looks better for farmers –
until of course the next economic recession
due around 2020
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Thank you for your attention
… the farmers’ voice at the world level