Agriculture
Viewed from the highway, farming might look like a slow-moving business, but in reality it is in a constant state of flux. The types of commodities farmersproduce and the methods and technologies they use change every year.
What does not change much are the long-term economic and social pressures bearing on agriculture: declining commodity prices, increasing mechanizationand a growing number of larger enterprises as farms are consolidated.
Commodity prices fluctuate with supply and demand. But beyond the short-term ups and downs, prices for most commodities have been in long-term decline. For example, despite short-term price surges in 1988/1989 and 1995/1996, the price of grains in
Fewer farms, fewer farmers
These economic pressures have also driven the trend toward fewer, larger farms.
Slimmer profit margins have pushed farmers to be more competitive and have accelerated the drive to adopt more mechanization, advanced breeding methods and new management techniques. For example, in 2001, one million dairy cows produced more than 30 billion glasses of milk (about 7.6 billion litres). There were half as many dairy cows in 2001 as in 1976, but the herd produced 10.6% more milk than in 1976. Similarly, pigs and chickens now grow to maturity faster than ever. Crop yields have also improved as a result of new, higher-yieldingvarieties.
The value of farmland has been on the rise, increasing in constant dollars from $17 an acre in 1941 to $100 an acre in 1971 and to $862 an acre in 2001. Even when accounting for inflation, this is a large increase in price. In 2004, the average per acre price of farmland in Eastern Canada was $2,671, more thanfour times higher than the average of $632 an acre in Western Canada.
If “fewer farms, larger farms” is a trend throughout Canadian agriculture, it’s particularly dramatic in the poultry sector. The number of poultry farms declined from nearly 8,700 in 1981 to just over 4,900 in 2001. However, the number of birds reported on these farms rose from 89.1 million in 1981 to 123.6million in 2001. That’s 39% more birds living on 43% fewer poultry farms.
In addition to the fewer-but-larger trend, the poultry sector is becoming more and more vertically integrated. In other words, one firm often controls several stages in the production process, from hatcheries to processing poultrymeat and eggs.
Rural demographics changing
Fewer farms mean fewer farmers, and those who are left in farming tend to be older. The median age of a Canadian farm operator in 2001 was 49, comparedwith 47 in 1996.
In 2001, some 32,500 operators of Canadian farms were foreign-born, comprising 9.4% of total farm operators. The
The declining number of farmers is also having an effect on rural communities where agriculture is a key industry, especially on the Prairies. Shrinking farm populations and the disappearance of local or country grain elevators have caused other businesses to dry up, causing small towns to suffer. Thenumber of Prairie elevators in 2002 fell to 412, from 3,117 in 1981.
Farm income statistics illustrate how the situation in different agriculture markets can vary greatly. At any particular time, some markets are more profitable or stable than others. The health of agricultural markets can change due to a variety of factors such as changes in international trade and competition,weather, and consumer demand.
For some farm enterprises—such as cattle, hogs and greenhouse vegetables—free trade with the
Changing weather, shifting demand
Weather is another fickle variable. Serious droughts on the Prairies contributed to severe declines in wheat production in 2001 and 2002. The average yield of wheat in the Prairie provinces fell to 1,700 kilograms per hectare in 2002,the lowest yield in over a decade.
Changes in consumer demand have also brought about shifts in what is grown. An interest in international cuisine has been triggered by
Some products have increased in popularity due to the presence of niche markets. Lentil production, due both to increased domestic demand and a strong export market, climbed to 1,277,900 tonnes in 2005 from 38,900 tonnes in 1984. The value of Canadian-grown ginseng, which is used as a medicinal herb, reached$62.3 million in 2003, compared with $2.8 million in 1980.
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