BMO economists say Canada’s agriculture industry is performing strong
By Amanda Brodhagen, Farms.com
The Bank of Montreal (BMO) released a report saying that Canada’s agriculture industry is a solid performer, noting that the sector’s net worth increased by 78% since 2003.
"Rapid economic expansion in emerging markets and lagging demand growth from south of the border has resulted in increasing export market diversification," said Aaron Goertzen, Economist, BMO Capital Markets. "Although global competition is stiff, Canadian producers' productivity edge has contributed to a large and growing trade surplus."
The report says that innovation has consistently expanded the industry leading to its productivity, noting that output per hectare has more than quadrupled over the past 50 years. The report also highlights that 2012 marked the second-largest harvest on record. Global demand growth has also increased agriculture product prices over the past decade, driven by population increases and income growth of the middle class in emerging markets.
"While some Canadian producers in central Canada faced challenges due to drought, improved demand and increased production led the sector to solid revenue growth in 2012," said Karl McLaren, Manager, Agriculture, BMO Bank of Montreal. "These factors, along with ongoing technological improvements, continue to have a positive impact on the agricultural sector. We look forward to working with our farm customers to support their growth and success."