Expanding, diversifying, and evaluating our markets — a LIVE! with J.P. Gervais
Guess what? We have another great RealAg LIVE! episode for you and today’s focus is Farm Credit Canada’s latest trade report. Joining host Shaun Haney is J.P. Gervais, chief economist with Farm Credit Canada (FCC).
RealAg hosts a LIVE! Q&A on a timely topic each weekday on social media at 1 pm M/3 pm E!
- This year FCC’s report on trade was focused on food and how to expand trade and different markets, other than just the U.S.
- There are variables that are in our control, and ones that are out of our control.
- Is there any low hanging fruit left? If we are going to make some gains in trade, there’s some serious legwork and effort that need to take place to make that happen.
- What the report is doing, is looking at this data top-down, even though the data is conducted from bottom-up.
- To be successful at that export market, we need to increase our export density.
- Focus is really on those small and medium-sized businesses — to diversify. How do we unpack that? What sort of assistance do these companies need? The internal resources aren’t necessarily there. How do we close that gap?
- The one thing we haven’t invested is in marketing as much as we should. Businesses need some help with this.
- Marketing is how we get involved with the supply chains. We have lots going for us, and we need to ramp it up.
- Establishing relationships with buyers is a fixed cost. Those fixed costs need scale. Start small — the demand is there. It’s the execution we need to step up a bit.
- The report focuses on food — finished food, not so much the raw commodities.
- You have to take a look at where we are under-selling these products, that’s where the opportunity arises.
- Take a look at Europe and Asia, but the smaller markets, first. Not so much the U.S. and China necessarily.
- Have to be able to consolidate… how do we balance this?
- Business still have to be able to look at that bottom line, so it’s important to know what’s best for your business.
- We are a global leader when it comes to food security. We have major opportunities!
- What resources are available for small to medium businesses to leverage themselves? It’s hard to understand where to go. Financial support to get product from A to B, or to understand the regulations, can go a long ways.
- We need government support to make it easier for businesses to be able to do this. A concierge type service is something that is being considered.
- When prices are low, we look for resources. Right now we have a situation where commodity prices are looking pretty good. How can we make the businesses take a look when things are well. Not an easy answer, but we need to start looking more long term, versus short term.
- Are we doing enough to attract the diversity of processors? It’s the question of the hour. Gervais says the more we can add value, the more we can have efficiency. More people need to focus on the same idea as Protein Industries Canada has done with pulses. We need to do more as an industry to really leverage ourselves.
- It’s relevant to look at our food supply and to make sure we have enough, but we do have more than enough? We need to make sure we are still focusing on getting that food to our export markets.
- So the big question: How do we increase these export these markets. What do we do? Keep looking at the supply chain. Keep focusing on marketing. Keep your eyes on those smaller markets, as they provide so many great opportunities.
- Lots of questions coming to Gervais about vaccines — don’t wait for the Bank of Canada to increase interest rates, we are already seeing lots happening in the stock markets. It’s not happening in the bond markets yet. The introduction of vaccines is a good news story when it comes to the economic market; however, it’s still rearing on the cautious side. And always remember, what goes up, must come down.