Producers cast wary eyes on trade horizon

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This article was published 24/03/2025 (190 days ago), so information in it may no longer be current.

Seeding season is coming fast, but Chinese tariffs are already here.

And for Sally Parsonage, geopolitical tensions are making it difficult to commit to 730 acres of canola.

“I’ve thought about switching out a field, maybe, but I like to stick to my rotation,” said Parsonage, who farms near Baldur.

She intends to cover a quarter of her land with canola, in part, for soil health. However, China recently unleashed 100 per cent tariffs on Canadian imports of canola oil and meal, and U.S. President Donald Trump has threatened further tariff action April 2.

Chinese tariffs have also hit Canadian peas, seafood and pork, at varying levy rates.

The trade war environment with two of Canada’s biggest agricultural export markets has farmers questioning their future profitability.

Chuck Fossay has watched the price of canola decline over the last three months. He’s anticipating an $80,000 income drop at his Starbuck farm.

“We’re just going to wait and see here what’s going to happen,” Fossay said.

He aims to plant 1,000 acres of canola this spring, like usual. Still, the back-and-forth of tariff decisions south of the border and the Chinese duties imposed last week have his canola buyers lowering the price they’re willing to pay. They’re seeking alternate markets for their canola oil and meal, Fossay explained.

“China was a very lucrative market,” said the Manitoba Canola Growers board member.

Canada exported $4.9 billion worth of canola to China last year, including $920 million of canola meal and $21 million of canola oil.

The Canadian Canola Growers Association is eyeing Canada’s canola seed exports. If China tariffs the $4 billion industry, it will be bad news, said the association’s chief executive.

“The lion’s share is in the seed,” Rick White stated.

China launched an anti-dumping investigation on Canadian canola imports in September. The investigation is ongoing; tariffs on canola seed could be an outcome, White said. The investigation follows duties Canada placed on Chinese electric vehicles, steel and aluminum products in 2024.

The Canadian Canola Growers Association is calling for market diversification, including looking within Canada. Increasing production and use of biofuel — of which canola is an ingredient — would allow for a market “we have control over,” White said.

He, Parsonage and Fossay said direct cash payments to farmers would be needed if Chinese (and American) tariffs reduce revenue.

“The problem with loan products is they need to be paid back,” White said. “Farmers should not have to borrow their way through this.”

Last week, the Manitoba government released a 2025 contingency budget to combat the effects of tariffs. Up to $100 million has been tabbed for farmer and producer supports. However, specifics on the supports have not been released.

“It’d be nice to know what the government is planning,” Fossay said, noting farmers make their own plans up to eight months in advance.

Tariff scenarios keep changing, Manitoba Agriculture Minister Ron Kostyshyn highlighted. For now, the province is meeting with industry and other governments to craft a response should tariffs amplify, he said. He didn’t provide further details about the $100 million.

“I think there’s an opportunity to hopefully settle this with China, and (the) U.S. as well,” the former farmer said.

Kostyshyn has met with fellow Canadian agriculture ministers twice to discuss a “Team Canada” approach to tariffs. There’s increased compensation through AgriStability, a business risk-management program cost-shared between the federal and provincial governments, he underscored.

Ottawa announced Saturday the program’s compensation rate would jump from 80 to 90 per cent, and the payment cap would double to $6 million.

“The Manitoba government must step up with a plan and immediate relief,” said MLA Jeff Bereza, agriculture critic for the Progressive Conservatives. “And realistically, how far will $100 million go in almost a $9.5 billion business?”

New announcements from Ottawa are unlikely since a federal election is underway. Even so, directing part of Canada’s tariff revenue to Manitoba farmers would be helpful, said Colin Hornby, general manager of the Keystone Agricultural Producers.

KAP is among the organizations discussing relief options with the Manitoba government. Changing crops and supply chains to avoid tariffs cannot happen “on a dime,” Hornby said. The United States buys canola for biofuel in a way that’s hard to replace, he added.

Manitoba exports some $130 million in pork goods to China annually, per Manitoba Pork numbers.

Much of the pork shipped to China — such as pig feet — isn’t wanted elsewhere, noted Rick Préjet, chairman of Manitoba Pork. He’s taking a “watch-and-see” approach to his own farm at Notre Dame de Lourdes.

Long-lasting tariffs could cause producers to leave the sector, reduce their herds or conserve cash otherwise, Préjet forecast.

gabrielle.piche@winnipegfreepress.com