Canada's agricultural sector is expected to see higher growth rates over the next few years than they have over the past two decades. According to the Canadian Agricultural Prospects report by BMO Capital Markets Economics, the sector is projected to expand between 2.5 per cent and 3 per cent in 2012. This is due to an increasing demand for Canadian agricultural products from emerging markets.   

Ross Purdy, BMO's Senior Manager for Agriculture and Agribusiness says on the crops side, farmers are likely to increase their output with a record large canola crop expected. On the other hand, livestock gains aren't expected to be as dramatic because of the relatively small cattle and hog herds.

"We haven't had good growth in 2009 and 2010, and actually there was some contraction in the agricultural industry.  But last year saw better growth rates than previous years," Purdy says.  "Prices may moderate in 2012 which a lot of people are predicting, basically because there is going to be a lot of corn planted in the United States and if we have an average yield,  that's gonna put a lot of production for sale and if you have a steady demand then prices may moderate."

Overall, the near future of agriculture looks pretty bright and Purdy says its because of the merging economies in Asia. "When people increase their wealth, move from middle class to upper, or lower to middle, they begin to shift their protein needs from crop based protein to animal based protein, so that increases the demand for pork and beef," he explains. "We are exporters of both of those products, so with those markets increasing their demand for those products, we're in a really good position to capture that market."