BMO report expects increased global demand for meat.

 

Demand for meat is expected to grow at "brisk rates" in the next year according to a new report from the Bank of Montreal.

BMO's "Canadian Agricultural Prospects " report, led by BMO senior economist Kenrick Jordan, says Canadian agriculture output is set to fall by between 1 and 1.5 percent this year. The outlook for both crop and livestock producers is positive though, as the report predicts a 2 percent growth in output in 2011.

"2010 is not going to see great things for the ag industry, although things will pick up significantly in 2011," says Brian Lemon, commercial banking area manager with BMO in Manitoba.

He explains they expect demand for meat will grow as developing countries broaden and enrich their diets. "We're seeing a bit of a global recovery, which will impact our exports. We're seeing some import restrictions being lifted and if they're not lifted, there's a weakening or lessening of them."

On the grain and oilseed side, BMO economists expect prices will remain "above historical norms and generally move higher." "They have been moving up on a fairly gradual basis over the last year and we expect them to continue to do that," says Lemon.

As for challenges, the report says input prices are expected to remain at elevated levels by historical standards. Volatile currency markets and trade restrictions will also add risk to the industry.

~ Tuesday, October 26, 2010 ~