The Canadian dollar is expected to be one of the key economic drivers for the agri-food supply chain in 2017.
J.P. Gervais, Farm Credit Canada’s Chief Agricultural Economist explains.
"We believe that with oil prices remaining fairly stable and with interest rates not moving up to fast, although we do expect that borrowing cost so producers are going to go up. We expect the Canadian dollar to average 75 cents in 2017," he said.
He says a 75 cent loonie is positive for Canadian Agriculture as it improves our ability to sell into foreign markets which is important to the global economy and our agricultural exports.
"The positive trend for farm cash receipts in Canada has been the fact that our currency is weaker than the US dollar. That has turned out to be a positive for us if you compare the results we had in Canada to the US farm sector, which has experienced quite a bit of a downturn in 2015 and 2016," Gervais said.
Other factors influencing the sector's performance include energy prices, commodity prices, interest rates, and the global economy and their demand for our products.
On the flip side, a lower Canadian dollar also has an impact on producer inputs.