Canadian Farmers Dealing With Recession By Cutting Back

It comes as no surprise that Canadian farmers, just like U.S. farmers, are cutting back on buying new equipment and fertilizer, as well as holding off to buy new technology. But how deep and how long this time of cutbacks will go is what all the speculation is about.

Ian Wishart, president of Keystone Agricultural Producers in the Canadian province of Manitoba said, “They’re [farmers] being extremely careful with their money. I don’t think I’ve ever seen a spring where guys are conscious of costs as they are.”

Todd Stucke, vice president professional producers marketing for Georgia-based AGCO Corp, said North American tractor sales are down, but farmers are still kicking the tires. Figures have shown, farmers are still asking for quotes on new equipment as often as ever, but sales of small and medium-sized tractors were down by roughly one-quarter across the industry, according to AEM.

Reuters reported that instead of buying new, farmers are bidding up prices 10% to 15% on used farm equipment. Grain and oilseed growers are also coming off a year of bumper crops and high prices, tempered by rising input costs.

The Canadian livestock sector, however, is in dire straits because of low prices, food-labeling laws in the U.S. and flu-related trade bans on North American pork and another confirmed case of mad cow disease. Farmers have been slow to buy high-priced fertilizer, although cutting back on applications for crops that need nutrients can end up costing farmers in the end.

Fertilizer prices have dropped from a year ago, but not enough for farmers who are holding off on purchases. Non-traditional farming tools like global-positioning systems and auto-steering, are also falling victim to farmers’ thriftiness.

There appears to be a limit to penny-pinching, however. Canadian sales of Ford’s pickup, the F-150, are up 3.8% year to date, said Lauren More, vice-president of communications for Ford Canada.