Fruit and Leaves

Regional Market Studies

As a mature, high-cost agricultural economy, naturally we have to pay attention to emerging-producers, be it in Asia, South America or Africa, as they have a long way to go in increasing their yields as well as quality. Equally importantly, however, we have to pay attention to the US in our own backyard, world’s largest producer and exporter. Currently as misguided as us, they are even more dependent on low-value bulk-exports -- soybean, corn and wheat. But they can just as easily wake up to the specialization-imperative and follow suit at a much larger scale to dwarf our efforts.

We have some unfinished work from a few years ago on China, how a minor player on the world grain scene became a major producer (close 2nd to the US) and by far the largest importer (3-times more than our exports). We are updating this work and will soon make it available on this platform, titled The China-Factor. The reason we are placing importance on this report is not because we are at all optimistic that Canada-China relations will improve any time soon, but changes in China’s trade-patterns and import-sources will profoundly impact crop-prices and global-trades.

On the coattails of our China-project we plan to turn our attention to a related topic, production increases in a huge region to China’s west and north -- stretching from Mongolia and Kazakhstan, through Central Asia, to Georgia and Ukraine, with Russia across the north, we call the New Grain Belt. Yield increases across this region are evident, likely to have major impacts on global trades, putting downward pressure on most crop-prices. These trends will likely impact our bulk-export prospects most, thereby putting more pressure on producers to shift to specialty-crop niches.

 

We have another initiative on the horizon, digging into the EU grain industry -- 3rd largest producer and 4th largest trader, with balanced imports-exports. This is a highly regulated, at least policy-driven, market -- legacies of member-states as well as new agricultural policies. Thus, its relevance may be limited to highly liberalized US and Canada, but there are many lessons to learn in crop-specialization and containerization. Also, the EU has achieved a high degree of crop-food-alignment together with supply-chain-integration across agriculture and food-industry sectors.

Major Grain Producing Regions

We are one of the largest grain-producers in the world -- nowhere near the US or China but still 8th in the world.  Taking comfort in our rapid export-growth in recent years, however, we have not paid much attention to where we fit into the global trading scene -- among our traditional competitors, or in relation to emerging producers.

In trying to drive our diversification in the coming years, we plan to pay a great deal of attention to global markets through production and export trends.  In the coming months we have a report coming, The China Factor, followed by another, New Grain Belt.  These will be followed by two others on the EU and US.