Canada Agribusiness Report Q2 2013
BMI View: Canada''s position in the global grain market is being reinforced in 2012/13 thanks to betterthan- expected wheat and corn production and in a context of tight supply from other major producers. The country could temporarily gain export markets from the US, as the wheat Canada produces is the closest to the US hard winter wheat. The country''s livestock industry could suffer from the implementation of country of origin legislation (MCOOL) in the US but margins for the dairy and livestock sectors should improve overall in 2013 thanks to moderating grain prices. As a result, we highlight growth potential in the near term for poultry and bakery processor Maple Leaf Foods.
Grains & Livestock Ahead Canada - BMI Market Value By Commodity (as % of total)
Note: The BMI Market Value is an addition of all domestically produced commodities'' value (calculated by multiplying the production with the international benchmark prices, converted in US$/tonne).
- Wheat production growth to 2016/17: 9.2% to 27.6mn tonnes. Liberalisation of the Canadian Wheat Board will increase competition between exporters and encourage farmers to boost production.
- Beef consumption growth to 2017: 0.6% to 1.0mn tonnes. We see potential for consumers to shift to cheaper and healthier types of meat such as pork and poultry.