Ontario producers chart
new opportunities
In a time of change, RBC Royal Bank’s Gwen Paddock sees an industry taking charge of its future.
Looking back just a few years, you might have been forgiven for thinking that agriculture in Ontario had seen better times. The BSE crisis was in full
swing, cash crop prices were very low and a rising Canadian dollar was putting upward pressure on many costs.
Now consider the picture as the harvest of 2007 wraps up. Prices for some crops are significantly higher and BSE for slaughter cattle is having less of an impact. Despite evident challenges in some sectors, with tobacco prominent among them, a brightening outlook was reflected in the positive sentiment at many industry gatherings this past spring.
“Generally, the tone at industry meetings has been optimistic,” says Gwen Paddock, RBC Royal Bank’s Guelph, Ont.-based Vice President of Agriculture, Agribusiness and Commercial Banking. “If you look at the way prices have improved from a year ago, the grain sector in particular is feeling positive.”
New assignment reflects industry commitment
This past spring, Paddock assumed a new role within RBC Royal Bank’s Agriculture and Agribusiness group. Internally, among other functions, she serves as a conduit between the national Agriculture and Agribusiness office and the bank’s specialized team of Agriculture Account Managers located throughout Ontario.
The rationale for specialization? As farms become larger and more technologically advanced, it becomes harder for a nonspecialist to understand the management vision behind a client’s credit requirements.
“We’re the bank that pioneered specialization in serving Canadian agriculture,” says Paddock, “and our clients continue to say that knowledge of and commitment to agriculture are vitally important. At a time when others seem to be pulling back from agriculture, we are going deeper and providing more.”
Paddock’s external role includes representing RBC at a variety of industry groups and events, from the Ontario Agribusiness Association to numerous
producer organizations.
Guarded optimism on ethanol
Ethanol production is expected by many to have a transforming effect on Canadian agriculture. In Paddock’s view, both the short-term and long-term impacts on grain and livestock markets should be assessed. A positive effect on corn prices may be offset by price and supply concerns for livestock producers. “The impact of ethanol is putting us at a crossroads,” she says. “We were starting to believe that you can’t make money growing bulk commodities, but for now, growing commoditized corn could be very profitable.”
Amid the land-rush mentality that ethanol inspires in some, Paddock urges caution. While corn will dominate the current wave of ethanol production,
cellulostic technology could emerge even stronger in the medium term. Higher demand for perennial switchgrass by ethanol producers could eventually
reduce the demand for corn.
From food production to materials production
For crop-producing areas, ethanol brings a historic shift from food production to energy production. While ethanol might have great benefits for agriculture and rural Canada in the long run, another opportunity excites Paddock even more. She believes that biotechnology and bioproducts have even greater potential to change the agriculture industry for the better.
“There are amazing things going on,” she says, citing the “bio-auto initiative” that’s studying ways to use plant-based materials in car manufacturing. “Traditionally, we’ve been a commodity based industry, but these new agriproducts will have a strong value-added component.”
New blood wanted
Despite stronger prices for some crops, Paddock sees several pressing issues on the Ontario industry’s radar screen. One is concern about the province’s hog processing capacity. Others include the impact of WTO talks on supply-managed sectors and the feedgrains price squeeze being felt by livestock producers.
If there’s one issue that keeps her up nights, though, it’s the shortage of young people entering the industry. The bright new University of Guelph grads Paddock’s been hiring as RBC trainees are the exception that proves the rule: the industry is aging.
In her view, one answer lies in communicating that agriculture is at the leading edge of science, management and personal growth.
“I’d like our young people to see the industry that I see every day in Ontario,” says Paddock. “There’s a lot of potential in areas that didn’t exist 10 or 20 years ago. I’m quite confident that we can continue to advance in this industry, and that agriculture and agribusiness are a great
place to be.”
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