Canadian grain producers grappling with the vagaries of diplomacy

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<q data-attributes = "{" lang ": {" value ":" fr "," label ":" English "," data ": {" id ":" fr "," name ":" English "} }, "value": {"html": "The Canadian share of total Chinese wheat imports has skyrocketed from% in 2017-2018 to more than 60% in 2018-2019 "," text ":" The Canadian share of total Chinese wheat imports has skyrocketed from 32% in 2017-2018 to more than 60% in 2018-2019 "}}" lang = " en ">Canada's share of total Chinese wheat imports has soared from 32% in 2017-18 to over 60% in 2018-2019, reports the latest issue of Canada's Grains and Feeds Newsletter from the United States Department of Agriculture.

The report, produced by an agricultural attaché at the US Embassy in Ottawa, states among other things that Canadian farmers' gains were made at the expense of their US counterparts.

US wheat exports to China have fallen and Australian export supplies have fallen sharplycan we read in the document.

Canadian wheat sales boom in China

Canadian wheat sales boom in China

Photo: CBC

In addition, many Canadian wheat producers also plant canola. For the latter, higher sales of wheat to China offset some of the decline in canola sales. This leaves them with the choice to decide what they will plant next year in an unstable global trading climate.

China accounted for nearly half of our seed exportssaid Jim Everson, president of the Canola Council of Canada.

We would say that prices have dropped by about 10% to 12% since the beginning of the conflict in March. Last year, canola producers received $ 10 billion in cash receipts as a direct payment for the marketing of canola. That's 10% to 12%, so it's over $ 1 billion from the canola economy.

Jim Everson, President of the Canola Council of Canada

Cam Dahl, President of Cereals Canada, confirms that Canadian wheat producers have benefited from the escalating trade war between Washington and Beijing.

<q data-attributes = "{" lang ": {" value ":" fr "," label ":" French "}," value ": {" html ":" We had very robust wheat sales in China, he explained. We also had a good year for barley. With wheat, we normally export between 450000 and 500000 tonnes to China, and this year we will be about two million tonnes. "," Text ":" We had very robust wheat sales in China, "he said. We also had a good year for barley. With wheat, we normally export between 450000 and 500000 tonnes to China, and this year we will be about two million tonnes. "}}" Lang = "en">We had very strong wheat sales in China, he explained. We also had a good year for barley. With wheat, we normally export between 450,000 and 500,000 tonnes to China, and this year we will be about two million tonnes.

Portrait of Cam Dahl

Cam Dahl, President of Cereals Canada

Photo: CBC

Although China produces more wheat than any other country in the world, Dahl said it has generally turned to three countries to provide some varieties: Australia, Canada and the United States.

Australia is experiencing a series of droughts and simply has no supplies available, and because of trade problems with the US administration, China does not import wheat from the United States, either. he continued. This is the reason for the significant increase in Canadian exports to China.

Canola: loss of income and area

The increase in wheat sales could result in an increase of about $ 500 million in the pockets of Canadian farmers.

But, according to Cam Dahl, this will not offset the loss of income suffered by Canadian farmers because of China's decision not to buy their canola.

Portrait of Jim Everson

Jim Everson, President of the Canola Council of Canada.

Photo: CBC / Jeff Stapleton

Jim Everson noted that the collapse of the canola market is reducing the production of a dominant crop in Canada.

Farmers will tell you that canola is the preferred crop because it pays a lot of the bills, he said. Input costs are high for canola, but on the other hand, the value they get on sales is very good. This has resulted in an increase in area and production for many years.

While the Canola Council hopes that farmers will choose to plant canola again next year, Everson would not be surprised to see a reduction in acreage, as farmers try to protect themselves and reduce their acreage. initial costs.

In southern Alberta, where there is a lot of beef production and there are feedlots in the area, for example, a farmer may decide to grow feed barley rather than canola. They could decree that given the circumstances, it would be safer to move some of their land this way.

Jim Everson, President of the Canola Council of Canada

There is no formal link between Canada's ban on Canadian canola and its high-profile dispute with Canada over the arrest of Meng Wanzhou in Vancouver last December for extradition to the United States. United States for conspiracy, fraud and obstruction.

But diplomats and political experts say China's trade pressures on one of Canada's largest agricultural exports are clearly part of Beijing's strategy to convince Canada to let Meng Wanzhou go.

Soil, time, politics

Whether they grow canola or wheat or both, Canadian farmers agree that their unpredictable activities have become even more volatile as the world becomes more protectionist.

Farmers are thinking next year when harvesting this year's harvest. And most of them are getting organized in the fall to buy the seeds they plan to plant next spring.

In normal times, the calculations used to choose one crop over another are around the soil, weather conditions and commodity prices.

A farmer driving his tractor passes a field of canola.

Farmers are already thinking about their production for next year.

Photo: Reuters / Todd Korol

Farmers can rotate crops to avoid soil depletion and spread diseases, for example, while commodity prices are usually determined by well-known rules of supply and demand.

These calculations tend to be disrupted by the many trade wars, such as the one between China and the United States.

Trade and international politics are as important to a farmer today as the weather is.

Cam Dahl, President of Cereals Canada

Trade policies that affect Canadian producers' prospects for next spring go far beyond the disputes over China. Wheat is a good example.

Barriers rise from Italy to India

Until recently, a large portion of Italian pasta was made from Saskatchewan durum, and Italy was the largest buyer of Canadian wheat in the world. But not anymore.

<q data-attributes = "{" lang ": {" value ":" fr "," label ":" English "," data ": {" id ":" fr "," name ":" English "} }, "value": {"html": "They have put in place a labeling indicating the country of origin that really targets protectionism, said Mr.Dahl. The result is that Italian pasta manufacturers give priority to Italian and European durum wheat, not to Canadian exports. "," text ":" They have put in place country of origin labeling that really targets protectionism, "said Dahl. The result is that Italian pasta manufacturers give priority to Italian and European durum wheat, not to Canadian exports. "}}" lang = "en">They have put in place country of origin labeling that really targets protectionism, "said Dahl. The result is that Italian pasta manufacturers give priority to Italian and European durum wheat, not to Canadian exports.

<q data-attributes = "{" lang ": {" value ":" fr "," label ":" French "}," value ": {" html ":" This resulted in a decrease of about 60% of our exports to Italy, following the signing of a trade agreement with the European Union (CETA). We therefore see protectionist measures on the part of Italy to reduce our exports after the signing of a trade agreement with that country. "," Text ":" This has resulted in a drop of about 60% of our exports to Italy. Italy, following the signing of a trade agreement with the European Union (CETA). We therefore see protectionist measures on the part of Italy reducing our exports after the signing of a trade agreement with that country. "}}" Lang = "en">This has reduced our exports to Italy by around 60%, following the signing of a trade agreement with the European Union (CETA). We therefore see protectionist measures on the part of Italy to reduce our exports after the signing of a trade agreement with that country.

Protectionist policy also closes the Indian market to Canadian producers, added Cam Dahl.

In a very short period of time, countries were looking for ways to facilitate trade, reduce barriers to trade, and a free market that greatly benefited Canadian agriculture, a new era of protectionism. . Barriers to market access are really raising and threatening some of these key markets for Canadian crops.

Cam Dahl, President of Cereals Canada

High stakes decisions

Many Canadian farmers will have to make risky calculations over the next month or two months – knowing that a decision taken behind closed doors in Beijing, or an inflammatory tweet from the Oval Office, could plunge their carefully prepared plans into a real one. chaos.

These are tough decisions that farmers must make right now for their plantations because they affect the entire economy. Whether it is about new equipment to buy or transformations that could improve their capacity … They must now think twice before making these investments.

Jim Everson, President of the Canola Council of Canada

Cam Dahl has reached the same conclusion as Jim Everson: some farmers will be tempted to limit their investments to reduce their exposure to the vagaries of trade wars and will be forced to limit their spending, perhaps even setting up crops that have a lower production cost.

According to a report by Evan Dyer of CBC News



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https://ici.radio-canada.ca/nouvelle/1282412/commerce-canola-ble-chine-canada

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