Farm Credit Canada’s J.P. Gervais and an economic Q & A

As we enter the second month of physical distancing and economic shut down during the COVID-19 pandemic, discussions have begun on easing restrictions and potentially allowing some people to get back to work. But we don’t know how long that might take, or when it will happen, or what the economic recovery will look like when it does begin.

In this Q & A recorded live April 28th on RealAgriculture’s social media channels, Farm Credit Canada’s chief economist J.P. Gervais offers his thoughts on the economic rebound and recovery, because there will be one — but when and how is the big question.

Comparing the market moves and fall out to the 2008 financial crisis, Gervais says that financial markets, currency, and other economic indicators have not behaved entirely as expected, and that probably makes sense as we’ve never experienced a global pandemic in modern times.

That said, the longer social isolation rules are in place, the slower or longer the rebound will be, he says.

For the agriculture industry, farm profitability in the livestock sectors will be hard hit this year, and possibly even looking further into 2021 as the futures markets are not allowing producers to lock in profit. Interest rates have nowhere to go but up, but aren’t likely to begin that climb anytime soon. Perhaps the one bright spot in all of this is land values, which should still see modest growth, even in these tough times.

“I just don’t see (farmland) being exposed to significant downside risk,” Gervais says.

Listen on to hear more about where Gervais sees the Canadian dollar moving, some excellent advice for those sitting on expansion plans right now, and what two economic indicators he’ll be watching that will signal the economic recovery.

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