February 19 2016

Growing the North 2016– Too Optimistic?

Posted on the 08:46 am under Business,Monthly News by Darren Boyer

Attending the 2016 conference titled Growing the North Feb 17-18 was a real pleasure.  The atmosphere was very positive and the variety of the speakers was amazing.   One of the most controversial speakers was Peter Ladner, author of the Urban Food Revolution .  Peter is part of the David Suzuki Foundation and started off his presentation with some criticisms of inefficiencies in the cattle industry.  This is a very tough way to warm up a crowd in northern Alberta during a recession!  I am sure if Peter comes back he will bring his message with a great deal more alignment to the local needs of the Peace Region.  I personally found his core message of how to bring variety and control over your food supply by innovative local growing methods and approaches to be refreshing and inspirational.  As a garden grower and someone who is very interested in the nutrition in the food we eat these topics are important to me and my family.  Thanks Peter for standing tall in the hallway after such a politically charged Q&A session!  That took some courage.

 

Reluctantly not wanting to fade popular consensus I’ll take Jackie Forrest’s glowing forecast of world oil demand in the 2nd half of 2016 to task.  Jackie is a hometown Grande Prairie girl now Vice President of Energy Research in Calgary with ARC Financial Corp and author of the blog ARC Energy Ideas.  Sharp, knowledgeable and one of the closing speakers what she had to say carried a lot of weight.  Her price forecast for oil was to see it rebound based on increased demand in Q3 and Q4 2016.  To me this message felt good.  If oil production and demand were going to equalize in the 2nd half of this year it encouraged a feeling of let’s just hang on 6 more months and then hope for going back to the way it was will return.  This is a technology blog but as CEO of pcit I am also responsible for gauging reality.    Our little tiny resources and financial perspective is willing to step out on a limb and suggest there is no way at all this forecast has a chance of being reality.

 

Demand is not going to pick up in the 2nd half of 2016 for several reasons.

  • ECRI index gives little hope this will occur
  • China’s private debt is over 200% of GDP.  This equals crisis in every historical occurrence.  It does not equal increased demand.  The descent into much slower growth versus the hope of increased demand is already very apparent.
  • Recency bias in how GDP has performed in the past is a long standing estimation error by economists world wide.  There is a consistent and pervasive trend to overestimate the potential of the future the last 7 years.
  • Over 600 rate cuts worldwide by central banks since the 2008 recession have exported deflationary forces to external foreign currencies.  This does not translate to increased demand it translates into a deflationary environment.

While I’d love to be riding the wave of a booming economy as much as anyone else the other side of the wave is the trough.  Very few have wanted to think of the trough and how long and difficult that could be.  Perhaps it would have been less of a positive message at the conference to push out hope to an unknown date.  But Growing the North first requires surviving the North.

Written by Darren Boyer

Darren Boyer

Darren Boyer is the founder and president of pcit.

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  • Peter Ladner said, on February 19th, 2016 at 14:20.

    Thanks for sharing this Darren.

    I am sorry you found that my presentation- or parts of it – were not ‘aligned with the needs of the Peace Region.’
    Just to be clear, I never intended to insult the cattle industry. Two of my 97 slides simply addressed the pressure on the cattle industry given exploding demand for food, limited global food capacity to grow protein, and the inefficiencies of eating beef compared to eating grains directly. This is a reality which I couldn’t avoid in an assessment of the world’s food crisis.

    It surprises me that this would be news to GP cattle producers, or they would not want to face up to a pretty widespread view which will impact their industry, albeit not for the better.

    I can fully understand their discomfort with it, but I’m puzzled that I would be reprimanded for accepting an invitation to speak in GP and sharing a viewpoint well-known to the conference organizers based on some unassailable facts that have been chronicled for decades by experts far more knowledgeable than me.

    Would you prefer that the oil price experts at the conference sugar-coated their predictions, or avoided dealing with tough realities so they would be “more aligned to the local needs?” Judging by your post, I think not.

    That said, a lot of people told me they were inspired by the central thrust of my talk which was that people in cities all over North America are gaining a new appreciation of their local food producers (all of them, including cattle ranchers!), and new ways they can support them and grow the local food economy.

    • Darren Boyer said, on February 19th, 2016 at 15:58.

      Thanks for the feedback! I am really glad to hear there were others who were also inspired by the innovation and interest in local growing. We are going to Vancouver the first week in March as a family and it will be great to show them a few of the examples in real life you presented.

      My parents have a small cattle farm here in the Peace Region. They farm because they like it. Their farm is small enough every cow has a name and their grandchildren usually know how each calf is making out through the course of the spring and summer. The presentation as I heard it was no insult to them nor threatening to my good friends who do farm as I heard it. And I do love a good steak!