With U.S. President Donald Trump’s pledge to impose a 25 per cent tariff on imports from Canada starting Feb. 1, Manitoba farmers are scrambling to understand what it means for their products and their livelihoods.
Oats, canola, and soybeans from Colin Penner’s farm near Elm Creek usually go right to the United States. Now, he’s not sure where they’ll go.
“Our canola, I’ve marketed it to a processor here in Manitoba, but their final product ends up going into the States.”
Farmers across the province are bracing for price drops. Penner thinks he’ll still be able to pay his bills, but his profit margins will be slim. He’s also expecting to pay a lot more for the U.S. products he needs to run his farm.
“A lot of our equipment comes from the states. So, with the weak Canadian dollar, that’s going to really negatively impact us there,” says Penner. “A lot of our phosphate fertilizers come from the states. We’ve got that at home, it’s in the bin right now, but for next year, that could really impact us negatively.
“Tariffs are going to be bad for farmers on both sides of the line,” he goes on. “Whether Canadian or American, it won’t be positive.”
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The U.S. is Canada’s largest trading partner. Manitoba exported $4.5B (CAD) in agri-foods south of the border last year.
Colin Hornby, general manager of Keystone Agricultural Producers, says the market impact could be massive.
“We have to diversify and look at other markets where we can sell our stuff,” says Hornby. “There’s talk about potentially, could the domestic market in Canada take up some of the slack? Well, we don’t necessarily have the capacity or the demand here with Canadian consumers. We’re not a big enough country.”
Hornby says they won’t know the full impact until the tariffs kick in. But he adds some U.S. grain buyers have pre-emptively stopped or slowed down their Canadian purchases.
“It’s not like there’s a wait to see what happens. Things have already happened.”
It won’t just be growers that will struggle, but livestock producers as well. Tyler Fulton, vice-president of the Canadian Cattle Association and a director with Manitoba Beef Producers, says 35 per cent of all Canadian beef exports are destined for the States.
“It really throws a wrench into whether or not the feed lots can buy our cattle, and whether the processors can sell the beef into the normal flows,” says Fulton.
Experts say farmers will have to focus on products they have a viable market for, but it’s extremely difficult to plan a route forward with so much uncertainty, causing anxiety for farmers.
Penner says he can plan for market variability, and insure himself against bad weather, but it’s unclear how he can protect himself against a threat this big.
“Some of these unique insurance products that will end up, in the long run, costing me a lot of money, I think they’ll probably be the route that I’ll need to go,” he says.
“It’s just, how do I insure myself to make sure that I’m able to pay my loans and pay myself at the end of the day.”