Canadian food manufacturers experienced strong profits in 2004, largely due to low cattle prices and strong demand, but will likely see a decline this year and next according to the Conference Board of Canada.
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The culprit: the strong Canadian dollar, which reduces revenues generated by Canadian products sold in the US. The Board predicts Canadian cattle prices will rise closer to historic levels in 2008, but much depends on whether a US ban on Canadian beef in the wake of a third case of bovine spongiform encephalopathy is lifted in March.
Weaker price growth in other key segments of the food manufacturing industry, such as grain, oilseed, fruits and vegetables, will further dampen revenue growth, the Board said.
