Optimism Rises

In a survey released in January by Farm Credit Corporation, farmers in
the supply-managed sectors, came out as more optimistic than other
farmers and particularly more optimistic than the currently battered
beef and hog sectors.

Supply management, it appears, breeds optimism.

In a survey released in January by Farm Credit Corporation, farmers in the supply-managed sectors, came out as more optimistic than other farmers and particularly more optimistic than the currently battered beef and hog sectors.

Despite uncertainty, a recent Farm Credit Canada (FCC) survey reveals that farmers feel positive about the future and new opportunities.

Dairy producers topped the chart with 70 per cent coming in as optimistic. This is consistent with two previous surveys by FCC that also showed dairy producers to be the most optimistic in the farm community.

Poultry producers were next in line with 60 per cent indicating they are optimistic about the future.

Meanwhile, 40 per cent of beef respondents in 2009 are optimistic about the future of Canadian agriculture.

More than half of all crop respondents (57 per cent) are optimistic about the future of agriculture, but the number who are pessimistic rose to 16 per cent in 2009 compared with 13 per cent who were pessimistic in 2007.

Dairy and poultry producers also focused on supply management as a key to the future. More than a third of poultry producers (36 per cent) cited protection of supply management as providing the greatest opportunity for agriculture. Just two per cent said free markets were an opportunity.

Dairy producers came out even stronger in citing supply management as key to the future, with 44 per cent saying supply management provides their greatest opportunity. Just one per cent of dairy producers said free markets would open the door to opportunity.

Optimism in Canadian agriculture 2009, www.fccvision.ca/InAction.aspx, p.10

The optimism of poultry producers is also reflected in other parts of the survey. For example, poultry producers are more likely than those in any other sector of Canadian agriculture to say they are much better off now than they were five years ago.

Farm Credit Canada reports that 29 per cent of poultry farmers surveyed reported they are much better off. This compares to 26 per cent in the crop sector and 21 per cent in the dairy sector. Meanwhile, 49 per cent of the hog producers surveyed and 27 per cent of the beef producers said they are much worse off than they were five years ago.
When those poultry producers who believe their farm is much better off are added to those who believe their farm is a little better off the total is 73 per cent. Nineteen per cent said the farm was a little or much worse off and eight per cent reported no change.
In 2008, 74 per cent reported they were much or a little better off, 23 per cent said they were worse off and three per cent reported no change.

In 2007, 74 per cent reported they were better off, 13 per cent worse off and 13 per cent reported no change.

When asked, in the 2009 survey, if their farm will be better off in five years, 67 per cent said they expected to be better off, 16 per cent expected to be worse off and 18 per cent expected no change. In 2008, 77 per cent said they expected to be better off, 17 per cent expected to be worse off and six per cent expected no change. In 2007, 72 per cent expected to be better off, 16 per cent expected to be worse off and 11 per cent expected no change.

In the 2009 survey, 60 per cent of poultry producers said they were optimistic, 26 per cent were cautious and 14 per cent were pessimistic. In the 2008 survey 63 per cent were optimistic, 25 per cent cautious and nine per cent pessimistic. In 2007, 48 per cent were optimistic, 42 per cent cautious and 10 per cent pessimistic.

Optimism in Canadian agriculture 2009, www.fccvision.ca/InAction.aspx, p.12

When asked to look at opportunities in agriculture, more than one-third of poultry respondents (36 per cent) report that the greatest opportunity is in the protection of supply-managed production, followed by diversification (13 per cent). Other opportunities mentioned included niche markets, new and emerging technologies, increased demand, and new domestic and global markets. Two per cent said marketing freedom. Meanwhile, no one mentioned new and emerging management practices.

Rising input costs remain the greatest challenge facing poultry farmers according to 20 per cent of those surveyed in 2009. This is down from both 2007 and 2008. Making a profit was the biggest challenge for 18 per cent up slightly from 2007 and 2008. Competition was the top challenge for 13 per cent and government regulation was mentioned by 12 per cent. Other challenges include financing the farm, environment, expanding urbanization, commodity prices, access to labour and new farm management practices.

As to plans for the future, 26 per cent said they plan to expand, 11 per cent plan to diversify, 28 per cent plan to expand and diversify, 19 per cent plan no changes and 11 per cent plan to get out of the industry.

Agriculture as a whole
In the broader survey of all farm sectors, more than half of all respondents (55 per cent) remain optimistic about the future of agriculture. This is consistent with optimism levels in 2007 (53 per cent) and 2008 (54 per cent) in spite of respondents’ concerns around issues such as falling commodity prices and rising input costs. Although more than half of all respondents  (60 per cent) believe that their farms or businesses are better off now than they were five years ago, respondents in 2009 (19 per cent) are significantly less likely to state that they believe their farms or businesses will be much better off in the next five years than they reported in 2007 (21 per cent), according to FCC.

In 2009 respondents continue to see career opportunities in agriculture: respondents are more likely to state that they have recommended a career in agriculture in 2009 (40 per cent) than in 2007 (36 per cent), and respondents remain advocates for careers in agriculture or an agricultural field, as two-thirds (67 per cent) would encourage a friend or family member to enter the field in 2009, FCC said.

Optimism in Canadian agriculture 2009, www.fccvision.ca/InAction.aspx, p.10

Agriculture continues to present challenges
Respondents continue to identify challenges in the agriculture sector; however, this year the list of top challenges has broadened. In 2009, respondents were less likely to cite rising input costs (26 per cent) as the greatest challenge facing agriculture compared to 2007  (41 per cent), whereas in 2009 respondents were more likely to cite making a profit (24 per cent) as the greatest challenge compared to 2007 (17 per cent). Conversely, respondents continue to see a variety of opportunities in agriculture, specifically an increased demand for products (11 per cent), public demand for products (11 per cent) and protection of supply management (10 per cent). In 2009, a shift in opportunities identified by producers occurred; respondents are significantly less likely to cite commodity prices (seven per cent) and ethanol/biofuel production (six per cent) as the greatest opportunities in agriculture compared to 2007 (15 per cent and 17 per cent respectively), according to the FCC report.

Regardless of the challenges that agriculture presents, respondents continue to look forward and focus on the opportunities, as one-quarter of respondents (23 per cent) stated that they are planning to expand their farms or businesses. The hope and commitment to the future of agriculture is a true testament to how resilient Canadian producers and agribusiness owners truly are, FCC said in a news release.

The survey
A total of 4,515 people out of a possible 8,508 responded to the survey for a response rate of 53 per cent. The margin of error is +/-1.43 per cent, 19 times out of 20 on a sample of this size. Subgroups will have a higher margin of error.

Optimism in Canadian agriculture 2009, www.fccvision.ca/InAction.aspx, p.12

Definition of optimism
The results of two key survey questions are combined in order to create the optimism indicator. The first is, “Looking ahead, do you believe that your farm or business will be better off or worse off in five years than it is now?” An answer of either a little better off or much better off counted towards the optimism score. The second question is, “If a friend or family member was considering a career in agriculture or an agricultural related field, would you encourage them to enter the field?” An answer of either: slightly encourage them or strongly encourage them counted towards the optimism score.

If a respondent reported that they believe their farm or business will be better off and they would encourage a career in agriculture, they were defined as optimistic. If a respondent reported that they either believe their farm or business will be better off or they would encourage a career in agriculture, they were defined as cautious. If a respondent reported that they do not believe that their farm or business will be better off and they would discourage a career in agriculture, they were defined as
pessimistic.