Farmers could see impact of poor global economy

By Calvin Daniels / Estevan Mercury
January 23, 2012 01:00 AM

Sometimes there is a feeling we live in a vacuum in this world, and being on the Canadian Prairies, and in particular Saskatchewan, right now is one of those times.

Certainly driving around the local community you see signs all over looking for staff. They may not be jobs that pay the wages to match rising home costs, but at least there are jobs to be had, and lots of them.

Look across the economy and things are generally strong. Oil, gas, mining and agriculture are all steady, with several of the areas coming off some record, and near record prices.

When you have an economy cooking, and jobs plentiful, it should be a time of great optimism. Certainly locally that optimism is being manifested in an expected busy construction season in Yorkton. There are at present two car dealerships, three strip malls, two hotels, and a number of other businesses with announced construction planned for 2012.

But every time you pick up a newspaper covering stories outside of Canada, you see clouds of uncertainty hanging over world economies.

For farmers that is particularly troublesome since world economies dictate prices for grains and oilseeds.

We only need to look south to the United States to see an economy in turmoil at best.
In fairness, if they did not have their tentacles so entwined around the world, they would be in collapse. The debt on the federal, state and local municipal levels would have bankrupted a country with less political influence.

That is bad news for Canada, since they are this country's major trading partner.
It is doubly worrisome since the Americans tend to become increasingly protectionist in times of economic distress, meaning imported goods are often the focus of unwarranted consumer and political backlash.

Turn to Europe and the situation late last year in Greece is all one needs to think about to become somewhat concerned about the economic underpinnings of that region. There is a very real concern that Greece is only the visible example of troubles that ripple through the region.
The one region that seemed to be holding things steady was the Far East, where China, Korea, India and Japan were bustling.

Japan has been hit by natural disaster, and India is in a spiral too. The rupee fell some 20 per cent against the U.S. dollar in the last half of 2011, and the U.S. dollar isn't exactly bullet proof right now either.

When the rupee gets hit, the ability to buy import goods declines. For Prairie farmers, that could mean less interest in our pulse crops, which has to be on their minds as they plan 2012 cropping intentions.
So while things look good close to home, it may be a case of being at the calm centre of a growing economic storm around the world.

© Copyright Estevan Mercury


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