The institute’s year in review brought together about 40 agriculture insiders for an overview of what the organization is doing to help farmers become more profitable, resilient and sustainable. The institute financially supported 26 projects last year to the tune of $1.4 million, from market studies to educational programs. It currently has 20 projects on the go.
Jack Slibar, president of Strategic Capital and Intelligence Group Ltd., is preparing a study for the Agriculture Management Institute looking at how leading producers navigate through business challenges and how to share their best practices. Things have never been more volatile for agriculture, Slibar said. Huge global forces are affecting the industry at all levels.
While commodity prices are currently enjoying a resurgence due to world events and market conditions, predicting what the future will bring is not only challenging, but near impossible, he suggested.
“We are in an incredibly changed environment,” he said. “There are more global issues coming onto the farm than at any other time in history.”
The global economy remains locked in the “Great Recession,” he said — a recession sparked by the bursting of the U.S. housing bubble, with its cascading effect of the near collapse of the world banking system. It is far from over, Slibar said bluntly to an audience that grew noticeably anxious.
The world is still in the process of finding its way out of the recession — a steep economic collapse that has held a grip on the global economy for four years running, and has virtually caused a “total collapse of economic growth globally,” he said.
“We really haven’t even begun to get out of the hole,” Slibar said. The situation may yet result in a global economic depression. If nations default on their debts, interest rates will shoot up and stagflation could result. International trade could collapse.
A staggering 30 million people around the world lost their jobs in the first two years of the crisis, which is having a negative impact on demand for all sorts of products, including agricultural ones.
All of these influences are bringing uncertainty to agriculture, Slibar said. But there is more to worry about. Unrest in the Middle East, which was ignited by the rising cost of food, is jeopardizing the world’s oil supply and causing a price shock at the gas pump. Energy is a major cost on the farm, and high fuel and natural gas prices are a serious threat to profitability and viability.
Can this cycle of economic volatility be broken? No one seems to know for sure, Slibar suggested. But it is clear that some agricultural operations are able to cope. While there is no right model, he said, operations based on the “extended family co-operative” appear to have a measurable competitive advantage.
Debt management is crucial in this time of uncertainty. “This is the time for producers to deleverage themselves,” Slibar said, adding that locking into interest rates might also be advisable.
While Slibar brought a sober perspective to Tuesday’s proceedings of the Agriculture Management Institute, others brought more optimistic overviews of the agricultural landscape. Murray Hunt, general manager of the Ontario Sheep Marketing Agency, said there is much room for growth in raising sheep. A pasture-based industry, it is suitable for a number of areas of the province, including the Bruce Peninsula, the Lindsay-Peterborough area and parts of eastern and northern Ontario.
Sheep farming is particularly attractive for young farmers, he said, because huge capital investments aren’t necessary to get into it.
“It’s opportune at this time because there are such good markets for lamb,” Hunt said in an interview, adding that Canadian production is only meeting 41 per cent of demand. “A lot of people who are coming to Canada consume lamb products.”
Young people with limited capital can get into the sheep business by renting a farm and making relatively small investments in sheep and necessary equipment, he said.
Ron Bonnett, treasurer of the Agriculture Management Institute, said the organization is in place to help producers better understand farm business management. Since only 22 per cent of farmers have formal, written business plans, according to information presented at the year in review, there appears to be much work still to be done to promote business planning in the sector.
“There are tremendous opportunities in agriculture as we go ahead,” Bonnett said, “and the key is how we are going to manage those opportunities and position ourselves for success.” source guelphmercury.com... For the latest updates PRESS CTR + D or visit Stock Market news Today
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