During an afternoon session on Nov. 30, 2023 at the CFGA’s 14th Annual Conference, Josh Callen with the Hoyt Report and Aaron Goertzen with BMO participated in a panel discussion about forage exports and markets where they shared their perspectives on the current risks and trends impacting the agricultural sector. The conversation, moderated by CFGA chair Eric Boot, covered various facets of the industry, from macroeconomic risks to export market dynamics and shifts in crop production. This week’s blog provides some highlights from that discussion.

Risks in the hay export market 
Josh: One significant factor to watch is China’s economy. China is a major consumer of forage, including hay from both the U.S. and Australia. Recently, China has reduced its hay imports due to a weaker economy and lower milk prices. This reduction could become a permanent trend if their economic conditions don’t improve. The decreased demand from China affects global markets, as the surplus hay needs to be redirected, either consumed locally or offered in other markets, potentially at lower prices. It’s crucial for producers to stay updated on international market trends and adapt their strategies accordingly. 
 
The impact of currency and inflation 
Aaron: A weaker Canadian dollar can benefit exports by making them cheaper for foreign buyers. However, it also poses inflationary risks due to higher import costs. The Bank of Canada primarily relies on interest rate adjustments to manage inflation and currency value. In a situation where the currency weakens significantly, the bank might consider raising rates. However, this could further strain the domestic economy. Unfortunately, the Bank of Canada has limited tools beyond adjusting interest rates and cannot directly intervene in foreign exchange markets. 
 
Concluding thoughts 
The panel concluded with a reflection on the complexities of global agricultural markets and the need for producers to adapt to evolving conditions. From macroeconomic risks to shifts in crop production and international trade dynamics, the discussion underscored the importance of staying informed and flexible in an ever-changing industry landscape. 
 
As the session wrapped up, the experts expressed their appreciation for the engaging dialogue and the opportunity to share their insights. The conversation provided valuable takeaways for producers, helping them navigate the current challenges and opportunities in the agricultural sector. 

2023 conference recordings 

To hear all of Josh’s session, you can purchase access to it and all of the recordings from the 2023 conference proceedings. Note, if you attended the 2023 conference, the recordings are available for free to those who registered for the conference. For more information, email [email protected].

2024 annual conference    

We’re heading to Guelph, Ontario Dec. 3 to 6 for the Canadian Forage and Grassland Association’s (CFGA) 15th annual conference. The CFGA is excited to partner with the Ontario Forage Council on this not-to-be-missed event that will celebrate the important environmental and economic role forages and grasslands play in Ontario, across the country and around the globe.   
  
This year’s theme is Roots to Success: The Foundation of Resilient Agriculture. During this not-to-be-missed three-day event, we will learn about exciting and cutting-edge happenings in the forage sector and gain valuable information and inspiration for anyone involved in the forage and grassland sectors across the country. Visit the conference website for more details.