Farmers are enjoying what is a near anomaly in terms of agriculture as there are good prices on both the livestock and grain side of things.
The idea of mixed farms, producing both grain and livestock, was once the norm as a natural buffer against low prices. Farmers reasoned if grain prices were low, livestock would be higher, and vice versa.
That has been the norm in most years, even as farmers moved away from the idea of mixed operations.
This year things have been good on both sides and the expectations for 2012 are for good prices to continue for livestock and grains and oilseeds.
The prospect for livestock may be longer term as well. Sheldon Wilcox, manager of DLMS Alberta, a speaker at this year's Grain Millers Harvest Showdown, said he sees "two, three, maybe four years" of good prices ahead for cattle, adding "if I had to guess, I'd say four."
The reason for the strong prices and prospects is simple: the Canadian and North American beef industry went through a huge downsizing in terms of cow numbers over the last few years.
"Where we are right now is a much smaller cow herd in Western Canada," said Wilcox. "We're no longer producing twice what we consume ... we're producing a lot less beef."
The same trend occurred in the sheep industry and that sector is currently enjoying strong prices.
The continuing change in the ethnic mix of Canada with more immigrants from countries where lamb is a more traditional food may help carry that industry forward too.
Analyst Mike Jubinville was among the speakers at this year's Saskatchewan Canola Expo held in Yorkton as part of the Grain Millers Harvest Showdown. He said the year ahead will see prices soften, but not dramatically.
"I don't think canola markets are in threat of collapse ... I don't look at the year ahead as a calamity in the making," he said. "I think the highs are behind us ...
Assuming no production glitches ... no real production threats ... there will be slightly tighter margins to work with than we had this year."
That said, he said "we are trading new dynamics in this market," adding that "the old highs are likely the new lows."
While the returns may not be as good next year, Jubinville's forecast suggests canola will again be profitable.
Canola is becoming a crop which, with its unique oil profile, and ability to be diverted to the biodiesel sector, is buffered somewhat against broader trends in the vegetable oil sector.
Jubinville said he also expects wheat prices to move lower in the new year, and while cereal prices may back off from this year, profitability should still be possible with the market options available.
Eventually however, farmers internationally will over-produce markets and prices will dip below the cost-of-production again.
And, as Wilcox said with regard to cattle markets, strong prices will stay until the industry "screws up and over-produces," adding, "and we will."
As a result, the good prices remain for "as long as it takes us to screw it up."
That statement is applicable across basically all agriculture commodities and tells the story of a supply/demand market, but for now producers have to look forward with the expectation of another good year.
