Canada Agribusiness Industry Update Quarter 3 2012

  • July 2014
  • -
  • Business Monitor International
  • -
  • 122 pages



BMI View:
Canada's involvement in the Trans-Pacific Partnership negotiations has the potential to begin a process that could ultimately see the country's dairy and poultry supply management system dismantled. After the abolition of the Canadian Wheat Board's monopoly on grain trading, dairy and poultry could be the next markets to be shaken up. For now, we expect milk, poultry and pork production growth to be mild in 2011/12. We projection corn output to decline in 2011/12 but to remain strong in the coming years as higher renewable fuel content requirements encourage the construction of new ethanol plants.

Key Trends
- Corn production growth to 2015/16: 10.7% to 13.0mn tonnes. Large domestic demand growth coming from the livestock segment and higher renewable fuel content requirements will drive output growth. - Milk production growth to 2015/16: 6.8% to 9.0 tonnes. Output will increase on the back of continued yield increases and investment in the segment . The recent signs of reconsideration of the supply management system could be beneficial to the market in the medium term. - Poultry consumption growth to 2015/16: 13.7% 1.1mn tonnes. The perceived healthier nature of poultry as well as increasing export opportunities will help to support consumption growth.
- 2012 real Gross Domestic Product growth: 2.0% year-on-year (y-o-y). Down from 2.5% in 2011; predicted to average 2.4% over from 2011 to 2016 .
- Consumer price inflation: 1.8% y-o-y in 2012. Down from 2.9% in 2011; predicted to average 2.2% over from 2011 to 2016 .
- BMI universe agribusiness industry value: 3.9% y-o-y decline to US Dollar 23.6bn in 2011/12; projection to average US Dollar 23.8bn between 2010/11 and 2015/16. Market Outlook Owing to favourable weather and higher global prices in 2011, we expect improved output for Canadian wheat in 2012/13. There was much speculation regarding the end of the Canadian Wheat Board as sole industry ing authority for western wheat (starting on August 1 2012) and its effect on future production.

We believe the end of the monopoly is likely to have broader and positive effects for farmers in the coming years, as they could receive higher prices in a more competitive industry with several purchasing entities. The market is also likely to benefit from Canada's recent free trade agreement with Morocco, which is set to offer Canadian wheat unrestricted access to one of the world's largest wheat importers. In 2011/12, we are projecting poultry production to increase slightly driven by demand from the retail segment and as more consumers switch away from beef. The Canadian government announced an investment of more than CAD600,000 into the Atlantic Poultry Institute in order to improve feed and health research. The investment is aimed at increasing the region's poultry producers' competitiveness, enabling them to increase quality of their products in order to meet demand from the more healthconscious consumer. This is expected to support production in the longer term, as will increasing export opportunities and high poultry prices. In 2011/12, we projection mild milk production growth. The number of milk cows in Canada has fallen by 17% over the last decade, but this has been countered by a subsequent increase in yields and greater consolidation at the farm level. BMI believes that Canada's involvement in the Trans-Pacific Partnership has the potential to begin a process that could ultimately see the country's dairy and poultry supply management system dismantled. In our view, this could be the catalyst that leads the system to the same fate as the abolished Canada Wheat Board. Over the short term, this development could reduce Canada's dairy production, but it presents upside risks to our long-term production outlook.

Table Of Contents

Executive Summary 5
Industry SWOT Analysis 7
Canada Agriculture Swot .. 7
Supply Demand Analysis ... 8
Canada Sugar Outlook .. 8
Data : Canada Sugar Production and Consumption, from 2011 to 2016 . 8
Data : Canada Sugar Production and Consumption, from 2008 to 2012 ... 10
Canada Livestock Outlook ... 10
Data : Canada Poultry Production and Consumption, from 2011 to 2016 . 11
Data : Canada Pork Production and Consumption, from 2011 to 2016 . 11
Data : Canada Beef and Veal Production and Consumption, from 2011 to 2016 . 12
Data : Canada Poultry Production and Consumption, from 2008 to 2012 . 15
Data : Canada Pork Production and Consumption, from 2008 to 2012 . 16
Data : Canada Beef and Veal Production and Consumption, from 2008 to 2012 . 16
Canada Dairy Outlook . 17
Data : Canada Milk Production and Consumption, 201-2016 ... 18
Data : Canada Butter Production and Consumption, 201-2016 . 18
Data : Canada Cheese Production and Consumption, 201-2016 ... 18
Data : Canada Milk Production and Consumption, from 2008 to 2012 . 22
Data : Canada Butter Production and Consumption, from 2008 to 2012 ... 22
Data : Canada Cheese Production and Consumption, from 2008 to 2012 . 22
Canada Grains Outlook ... 23
Data : Canada Wheat Production and Consumption, from 2011 to 2016 ... 24
Data : Canada Corn Production and Consumption, from 2011 to 2016 . 24
Data : Canada Barley Production and Consumption, from 2011 to 2016 .. 24
Data : Canada Wheat Production and Consumption, from 2008 to 2012 ... 31
Data : Canada Corn Production and Consumption, from 2008 to 2012 . 31
Data : Canada Barley Production and Consumption, from 2008 to 2012 .. 31
Commodity Price Analysis 33
Monthly Softs Update ... 33
Cocoa: 2012 Outperformance To Continue 33
Coffee: Next Support At USc130.0/lb .. 35
Palm Oil: False Break? .. 37
Sugar: More Fears Over Brazilian Crop 38
Cotton: Technical Bounce Over? 39
Data : Select Commodities: Performance and BMI Projections ... 40
Monthly Grains Update ... 41
Wheat - Deteriorating Supply Prospects . 42
Corn - Anticipating US Supply Downgrades ... 43
Soybean - Range Trading Ahead . 44
Rice - Ample Supply To Keep Prices In Check 46
Data : Select Commodities: Performance and BMI Projections ... 47
Upstream Analysis 48
GM Plantings Growth To Slow, Americas To Remain The Largest Exporter ... 48
Americas Fertiliser Quarterly .. 52
Canada Agribusiness Report Q3 2012
© Business Monitor International Ltd Page 4
Downstream Analysis ... 54
Consumer Outlook ... 54
Food. 55
Food Consumption .. 55
Data : Food Consumption Indicators - Historical Data and Projections .. 56
Confectionery.. 56
Data : Confectionery Value/Volume Sales - Historical Data and Projections, from 2009 to 2016 ... 57
Prepared Food 57
Data : Canned Food Value/Volume Sales - Historical Data and Projections, from 2009 to 2016 58
Data : Fish, from 2009 to 2016 ... 58
Data : Frozen Fruit and Vegetables, from 2009 to 2016 ... 59
Data : Oils and Fats,2009-2016 60
Drink 62
Alcoholic Drinks . 62
Data : Alcoholic Drinks Value Sales - Historical Data and Projections, from 2009 to 2016 63
Data : Alcoholic Drinks, from 2009 to 2016 ... 63
Hot Drinks .. 65
Data : Hot Drinks Value Sales - Historical Data and Projections, from 2009 to 2016 . 65
Soft Drinks .. 65
Data : Soft Drink Value Sales - Historical Data and Projections, from 2009 to 2016 ... 66
Mass Grocery Retail 66
Data : Mass Grocery Retail Value Sales by Format - Historical Data and Projections, from 2009 to 2016 . 67
Data : Mass Grocery Retail Sales By Retail Format Type (%) 67
Trade .. 68
Data : Trade Indicators - Historical Data and Projections, from 2009 to 2016 68
Canada Demographic Outlook .. 69
Data : Canada's Population By Age Group, 1990-2020 ('000) 70
Data : Canada's Population By Age Group, 1990-2020 (% of total) ... 71
Data : Canada's Key Population Ratios, 1990-2020 .. 72
Data : Canada's Rural And Urban Population, 1990-2020 72
BMI Projection Modelling 73
How We Generate Our Market Projections .. 73

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