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Coronavirus could impact Canadian farm incomes

Analysis from Farm Credit Canada's principal agricultural economist
grain silos stock
(Shutterstock)

The impact of coronavirus on the agri-food industry is still unclear but Farm Credit Canada principal agricultural economist Sebastien Pouliot sees four connections.

A weaker global economy could result from restricted movement of people, goods, delayed investment plans and closure of plants.

The SARS outbreak in 2013 reduced the global economy by .1 per cent but China was a less important factor then.

Since then Chinese output has quadrupled to make up 15 per cent of the world’s economy.

A slower economy will push commodity prices down, as already experienced by oil prices. Demand for food isn’t expected to fall but restricted travel and port unloading rules could create concerns.

Lower incomes from a slower economy could hurt ability to pay for food.

Reduced oil prices should reduce value of the Canadian dollar acting as a cushion to farm income.

Pouliot expects a slow economy will keep interest rates low, even cause central banks to reduce rates.

Ron Walter can be reached at ronjoy@sasktel.net

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