With the Canadian dollar falling in value to 70 cents U.S., Saskatchewan’s agricultural industry is looking at potential profits.
Producers may actually benefit from the low dollar, president of the Agricultural Producers Association of Saskatchewan Norm Hall said.
“Considering…97 per cent of what we produce in Saskatchewan gets exported, the low Canadian dollar will be good for everything going out of Canada,” Hall said.
Selling grain to the United States and being paid in American dollars also means greater financial returns for Canadians.
“But on the other side of that equation, virtually everything we buy – be it fertilizer, tractors, combines – everything we buy is based on the American buck,” Hall said.
For that reason, Saskatchewan producers can expect to pay more for their purchases.
According to Hall, that could also have an effect on the cattle industry.
“The feedlots are probably not importing corn right now,” he said. “They’re buying barley instead, just because of that Canadian dollar.”
Hall said drugs for cattle are brought in from the United States and are priced by the American currency. This could have a negative impact on the industry, making these items much more expensive for Canadians to buy.
Prices on the world grain market will also be a major factor in determining whether the low dollar will have a positive or negative impact on Saskatchewan agriculture.
Hall explained there are some things that can be done to prepare for a further drop of the Canadian dollar.
“You can hedge currency rates and support your prices into the future too a bit,” he said. “Or when you’re pricing out into the future you lock in the currency rate at the current time, so there is those sorts of things you can do.”