Farm Credit Canada's Chief Economist, JP Gervais, was in Swift Current yesterday to present his annual agricultural outlook, and talk with producers about the optimism in the ag sector.

"Farm income's been going up, the demand for the products we sell is really high, and we've got a deal done with the European Union, so there's more market access for Canadian products," he said. "I think the outlook is very positive, but that doesn't mean that we don't have a few issues and a few challenges to address, when you think of labour, or farm input costs or farmland values, but overall, I think it's a very positive outlook for the sector."

Gervais believes that grain prices will eventually stabilize above average despite the recent decline, while on the red meat side, consumption in developing nations still has an upside.

He adds there’s a definite relationship between grain prices and farm input pricing, and given that, we can expect to see Farm Input prices continue to soften.

"With crop prices, naturally, a lot of upside and we think crop input prices, naturally, have a lot of upside as well," Gervais added. "The other thing is the capacity to produce farm inputs is expanding at a rapid rate, so we bring more inputs into the market, with demand that is slowing down, compared to what it was two or three years ago. This is the reason why we are saying that there's less upside to farm input prices."

He says it’s important that producers "Think Globally and Act Locally."