Reaction to the U.S. slapping tariffs on Canadian products going south of the border has been swift from several farm groups.
On Tuesday, the wide-ranging 25 per cent tariffs on all Canadian goods and a 10 per cent levy on Canadian energy took effect, so did Canada’s retaliatory 25 per cent tariff on $30 billion worth of U.S. products with another round of tariffs on $125 billion worth of American exports to take effect in three weeks.
Bill Prybylski, the President of the Agricultural Producers Association of Saskatchewan (APAS), says on one hand, the tariffs create certainty as to what farmers will deal with moving forward, as there had been concern over whether the tariffs would take effect or not. But on the other hand, Prybylski says the tariffs create more uncertainty over which specific products would be targeted.
“How’s it going to affect our commodity prices and our input costs? And a lot of uncertainty as well as to the retaliatory tariffs as what products are going to be included and how is that going to affect producers, so still a lot of uncertainty out there.” said Prybylski.
Asked if the tariffs could impact farmers’ seeding plans or ability to sell grain, Prybylski said it would be more of the latter than the former.
“I think for the most part, producers have their seeding intentions wrapped up…I think some of the changes might be if there is going to be prices affecting our inputs, there maybe some changes as to where we get our fertilizer, what kind of fertilizer is coming in, and if the tariffs are going to be affecting fertilizer prices (and) how significant are they going to be,” Prybylski said of possible impacts to seeding intentions.
“I don’t think it’s going to affect our ability to sell grain, it’s going to certainly affect the prices that we’re going to be paid for our commodities. Being the States is such a huge customer for our products currently, and if we’re going to have to look to find alternate markets that maybe not as good a price coming out of some of those (places) for a lot of reasons because freight being one of them – it’s a whole lot cheaper to ship our product just across the line than having to ship it halfway around the world. So there’s plenty of opportunity to market in other parts of the world but it remains to be seen how that’s going to affect our overall prices.” Prybylski said of potential impacts to marketing grain to the U.S. and other international markets.
As the situation unfolds, APAS and other provincial farm groups are organizing a Saskatchewan Ag Summit for March 27th in Saskatoon. The Ag Summit will have speakers from the Canadian Agri-Food Policy Institute, University of Calgary, and more to talk about the current challenges and ways to navigate around them.
Prybylski says the tariffs was going to be a part of the Summit but it’s now going to be the primary focus.
“We’re hoping at this summit, we’ll be able to get some of the answers that producers are looking for,” he added.
“Disappointed” with the tariffs placed on Canada: SCA
The Saskatchewan Cattle Association is ultimately disappointed with tariffs in place on Canadian products.
CEO Christina Betker says it’s not good considering the American and Canadian cattle industries are “highly-integrated”.
“A lot of our animals move back and forth, both south and north, and processors in the U.S. do rely on our animals to come down to maintain their business as well, so it’s not a good situation for us,” added Betker.
Asked if the tariffs would impact cow-calf producers’ ability to market cattle, Betker believes it wouldn’t affect producers immediately but it could affect feedlots “a lot quicker” since feedlots move livestock to and from the States.
“So you could end up with some of the guys in the U.S. saying ‘no, we’re not going to take your stuff’ even though they kind of make those deals. so there could be issues that way,” she said.
In a February 2nd news release highlighting the significance of Canada-U.S. trade, the Canadian Cattle Association said, “Every day, $3.6 billion CDN in goods crosses the Canada–U.S. border, resulting in a $1.3 trillion annual trade relationship. Notably, Canadians purchase $722 USD/person of U.S. agricultural products each year while Americans purchase just $118 USD/person of Canadian agricultural products annually.
The American and Canadian beef and cattle industries are partners in that cross-border trade, with small and medium sized processors and local and regional food systems on both sides of the border relying on the free flow of cattle and beef across the border.
“The impact of this tariff on cattle producers will be felt immediately and severely. The cattle sector is a highly integrated North American market. When dealing with live animals you are not able to pivot quickly, and this tariff could cripple the world-renowned beef industry on both side of the border,” said Will Lowe, Chair of the National Cattle Feeders’ Association in the release.
“Tariffs will create significant impacts on both the Canadian and American beef and cattle industries, implicating prices, production, trade flows, and margins as well as the utilization of feedlots, packing plants, trucking, and on our other upstream and downstream partners in the supply chain. We can expect an immediate increase in volatility.” said Nathan Phinney, President of the Canadian Cattle Association.
Tariffs “threatening family-run grain farms”: Grain Growers of Canada
The Grain Growers of Canada (GGC) were another farm group “sounding the alarm” over the threat of U.S. tariffs. The GGC pointed out the potential impacts it will have on grain farms.
“Tariffs of this magnitude will put family-run grain farms at risk by introducing widespread market uncertainty,” said Kyle Larkin, Executive Director of the GGC in a news release from Tuesday. “The U.S. is by far our largest trading partner, with over $17 billion CAD of Canadian grain and grain products exported to every year. These unjustified tariffs threaten that trade relationship—and farmers’ livelihoods.”
Canada, which exports more than 70 per cent of its grain production globally, relies heavily on international markets. The tariffs are expected to drive down farmgate prices for key crops such as wheat, canola, oats, barley, and pulses, making it increasingly difficult for farmers to remain financially viable.
“As price takers, grain farmers are at the whim of the global markets that we export to,” said Tara Sawyer, Chair of the GGC. “Margins are already razor-thin, and an added financial burden like this could put the future of many family farms in jeopardy.”
“Canadian family-run grain farms are already facing death by a thousand cuts through increased input costs, regulatory burdens, and taxation,” said Larkin. “Uncertainty with our largest trading partner for grain and grain products, on top of ongoing instability with our second-largest trading partner, China, could push many family farms to the brink.”
Larkin adds, “a 25% tariff on Canadian grain and grain products is in effect a 25% tax on American consumers who purchase groceries every day. From bread and pasta to beer, oatmeal, and canola oil, dozens of products could see price increases amid an affordability crisis for both American and Canadian consumers.”
The Grain Growers of Canada wants the federal government to take action to eliminate the tariffs altogether, otherwise “farmers will face vast uncertainty and consumers will see a spike in their grocery costs.”