U.S. Farmers Struggling to Find Optimism in Ag’s Future; Canadian Farmers Fare Better

Owen RobertsThe optimism being felt by the Canadian government about agriculture in our country is certainly not shared by farmers to our immediate south, about their own future.

Ottawa issued a news release a few weeks ago, proclaiming happy days were here for Canadian farmers. It painted a positive outlook for farmers, pointing specifically to what it called “growing strength in the cattle and hog industry, strong crop sales resulting from high carry-in grain and oilseed stocks despite softening grain prices, and relatively stable input costs.”

It sounded like good news for farmers. And some days, good news is hard to find in agriculture, with all the pressure it’s facing.

But it turns out that some Ontario grain producers disagreed with such a sunny financial outlook. Sales are OK, they say, but prices aren’t, and the price forecast is average, at best.

Indeed, some farm management specialists are urging farmers to give a lot of extra thought to the way they market their grain this year, even before seed is put in the ground, so they can take advantage of all possible sales opportunities.

But even the most pessimistic among those in Canadian agriculture don’t appear to be as lacklustre about the future as their U.S. counterparts.

In the U.S., a company called DTN which produces The Progressive Farmer publication, released the results last week of its thrice-yearly agricultural confidence survey, which it expresses in the form of an index. DTN surveyed 500 U.S. crop and livestock farmers at the end of February and beginning of March. It’s been doing so for the past five years. And compared to Canada’s upbeat outlook, the headline describing the survey results couldn’t have been more different.

It reads “Ag producer confidence reaches all-time low.”

Indeed, since December, producer confidence has shifted from what DTN calls an optimistic rating of 103.4, to a pessimistic level of 98.8 (the value of 100 is considered neutral, above 100 is optimism, values below are not).

The DTN markets editor called it the “the most pessimistic producer confidence reading yet” and noted it’s the second time in the last three surveys that producers’ confidence levels were pessimistic.

A year ago, producer confidence stood at a comparatively high 106.9.

What? How can two neighbouring countries be so far apart? What about the upswing in the U.S. economy and the strengthening of the American dollar?

Well, according to DTN, concerns over stagnant or falling crop prices (a phenomenon not exclusive to Canada, by any means), increased crop production and rising crop input costs contributed to crop producers’ pessimism.

But it’s not just crop producers who aren’t feeling the love. In the survey, farmers who raise livestock were likewise glum because of the prospects of lower prices brought on by beef, pork and poultry expansion. When livestock inventories were low, as they have been for the past several years, these producers started expanding their herds and flocks. Once supply catches up with demand, the price is likely to come down, and that clearly has them worried.

It’s a tough situation. On a webinar about agricultural advocacy last week, I spoke about the need for farmers to communicate with the public. That’s because farmers have such a high credibility rating, not to mention a hands-on perspective of what happens on the farm – something people are confused about right now.

Imagine, though, how hard it is to be publicly upbeat about your industry when you have such a grim outlook.

Maybe in the U.S., confidence and attitude won’t intersect. But that seems unlikely. And even though it’s the truth, at least in the U.S., I doubt pessimism is the image consumers are looking for from farmers.

 

Owen Roberts

Owen Roberts directs research communications and teaches at the University of Guelph, and is president of the International Federation of Agricultural Journalists. You can find him on Twitter as @theurbancowboy

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