Canada

Canada’s Dairy Industry Thrives

Thu, 20 Nov 2025 14:00:00 GMT

Canada’s population growth climbed 3% in 2024, primarily through immigration, which has been good for the Canadian dairy industry and has helped the country maintain its highly protected and subsidized dairy industry, according to Sarina Sharp, analyst with the Daily Dairy Report. After years of exceptional gains, the rate of growth has slowed to a year-over-year increase of 0.9% for the first six months of the year to just shy of 41.6 million people. By comparison, the U.S. population grew by 0.98% in 2024 compared to 2023.

“Due primarily to an increasing population, Canadian dairy demand appears to be sufficient to absorb domestic milk production growth and accommodate more imports, and that’s good news for the U.S. and European dairy exporters,” Sharp said.

Canadian milk production reached an all-time high in the first half of the year, with output up 1.4% from 2024 volumes after adjusting for leap day, which means dairy producers are sending increasing volumes of milk to dairy processors. According to Statistics Canada, first-half deliveries were up 1% increase compared to the first six months of 2024. For the year, Canadian dairy processors expect to take in more than 7 million metric tons of milk this year, a record high.

“A growing population and greater demand for dairy have allowed Canada’s dairy sector to grow even as the historically insulated industry has been forced to open the door to more imports,” said Sharp. “While Canada has tried creative ways to import less dairy than agreed to in recent trade negotiations and dispute resolutions, Canada’s January through August imports of cheese and butter hit all-time highs.”

In the first nine months of 2025, butter imports outpaced 2024 volumes by an impressive 33%. The United States accounted for two-thirds of that total. For cheese, the United States supplied 36% of Canada’s imports, second only to the EU-27’s 50% share, according to data from Trade Data Monitor.

“While Canada remains a net exporter of skim milk powder, the positive trade balance has been shrinking,” Sharp noted. In August, Canada sent just 410,000 metric tons more skim milk powder abroad than it took in, the smallest monthly net exports since early 2016.

All The Details: Inside John Deere’s New F8 and F9 Forage Harvesters

Fri, 06 Jun 2025 18:20:35 GMT

John Deere is rolling out two new forage harvesters for North American dairy producers and custom harvesting operations.

The brand new F8 and F9 Series feature three factory-installed operator cab options, a technology stack that will one day enable autonomous operation, and enhanced feed quality via an integrated inoculant dosing system.

How are F8 and F9 different?
The F8 Series (425PS to 645PS) is a narrow base model that takes the place of Deere’s 8000 Series forage harvester, while the F9 Series (700PS to 1020PS) replaces the 9000 Series. Within the F9 Series is the F9 1000, which is Deere’s largest forage harvest machine to date.

(Editor’s Note: “PS” stands for Pferdestärke, which is the German term for horsepower. PS to horsepower is not an apples-to-apples equal ratio. The F9 1000, for example, features 1020PS which equates to 1,006HP, according to the manufacturer.)

The F9 is available in two engine options:

John Deere 18X (no DEF required)
Liebherr V12 24L

It has five horsepower options, while the F8 comes with the JD14X engine and can be configured across six horsepower options.

The manufacturer last rolled out completely new forage harvesters in 2019.

How much will each new model cost?

The feed rolls on John Deere’s F8 and F9 forage harvesters have integrated metal detection to keep unwanted material out of your feed.

(Matthew J. Grassi)

John Deere is not sharing its pricing just yet, but the two new models are built at its Zweibrucken, Germany, factory. John Deere dealers will begin taking orders for the aggressively styled, technology-packed harvesters this fall, with final delivery in time for the 2026 forage harvesting season.

Deere representatives declined comment on what effect, if any, the still-developing U.S.and E.U. tariff situation could have on its launch plans.

Ahead of the launch, Farm Journal went to Madison, Wisc., to kick the tires and learn all about the new machines. The F8 and F9 harvesters we viewed and climbed into were the first finished production units off the factory line. Deere says several units will be field tested with U.S. customers ahead of the full fall launch.

“We’re really excited about the new cab and the technology we’ve added to these machines like central tire inflation, ground speed automation and the new kernel processing units,” says Bergen Nelson, go-to-market manager, combines and forage harvesters.

Here’s some of what we learned about the new forage harvesters:

(Matthew J. Grassi)

Cab Comforts: The same three operator cab options offered with Deere’s X and S Series combines — Select, Premium and Ultimate — are available on the F8 and F9 Series. A smoothly swiveling captain’s chair, as well as an all-new corner post display that shows real-time machine data, are among the additions. Operators who spend long hours in the cab will also appreciate integrated entertainment like SXM Radio and an optional mini fridge.

(Matthew J. Grassi )

Foundational Deere Tech Stack: Each new forage harvester in the series includes Deere’s baseline precision tech enablement stack — which consists of its G5 display, Starfire 7500 receiver and JDLink modem.

Central Tire Inflation System: A completely new feature (top left inset photo) within the G5 display allows the operator to adjust front tire PSI up or down from the cab.

John Deere Inoculant Dosing System 2.0

(Matthew J. Grassi)

Inoculant Dosing System 2.0: New on both the F8 and F9, a high-volume 85 gallon inoculant tank and integrated pump allow the user to accurately adjust silage inoculant dosage rates from the G5 display in the cab. The system is easy to pump and prime as well with the touch of a button located at the rear of the machine.

Ground Speed Automation: This cruise control-like option reads RPMs and throttles the harvester up or down based on crop conditions. For example, harvesting corn at higher moisture levels will increase power output, so the machine will automatically slow down to ensure it doesn’t plug up or do a sub-optimal job harvesting. This feature comes standard on all base models for both series and does not require a yearly subscription unlock or per-acre fee.

Pro Touch Harvest: Another new feature within the G5 display allows the operator to shift the machine from road transport mode to harvest mode in a single click. It can also be used to quickly engage AutoTrac and ground speed automation once the operator arrives at the edge of field.

This all-new XStream 305 Kernel Processing (KP) unit is built by Scherer in Sioux Falls, South Dakota.

(Matthew J. Grassi)

New Kernal Processing (KP) Units: The new harvesters feature two completely redesigned KP units, the Ultimate 250 (also made in Germany) and the Scherer XStream 305, which is made in Sioux Falls, S.D. An integrated winch and internal rail mounting system makes switching the machine from corn forage to hay forage in the field quick and simple. The number signifies each KP unit’s roll diameter width in millimeters.

“Both KPs will go in both machines and have four different roll options depending on how aggressive the dairyman wants their end feed quality to be,” says Shane Campbell, product marketing manager, forage harvesters.

(Matthew J. Grassi)

Integrated Harvest Lab 3000: This on-demand constituent sensing module pulls over 4,000 samples per second with +/- 2% accuracy, and John Deere says it can save dairy operations time and money versus collecting and sending samples to a lab. The sensor tech (available as an add-on option) enables accurate measurement and documentation of dry matter, starch, protein, neutral detergent fiber and acid detergent fiber for both harvested forage and manure. The data can be stored, organized and shared via Deere’s Operations Center. Within Operations Center, users can take geo-referenced data and build out spatial starch content — as well as moisture and protein — maps for hybrid selection and fertility management. Because if you can’t measure it, you can’t manage it.

Active Fill Control 3.0: Using sensors and cameras on the grain spout, this tech feature automatically detects the trailer or grain cart next to the forage harvester and begins filling it with a preselected fill strategy. This reduces the number of times an operator has to adjust the spout manually and also lessens fatigue and neck strain, according to Deere.

(Matthew J. Grassi)

New Operating Modes: Several of the models within the F9 Series offer what Deere is calling its “Engine Power Plus” feature — which gives a sizeable horsepower boost when the machines senses it needs a little extra chopping power to the harvesting head. There is also an ECO mode that can be toggled on when the machines don’t need the extra torque.

Ease-Of-Access: Both models have side and rear panels that easily open to grant full access to the inner workings of the machines, making the new forage harvesters much easier to service and maintain without a lift or other heavy specialized equipment. The machine is setup so techs and mechanically-minded farmers will not have to climb underneath it to perform daily maintenance.

“At the end of the day, we know it’s all about the cow, and these machines will put out quality feed,” Nelson says. “We’ll have these out at the farm shows this summer, including Farm Progress Show, World Ag Expo, World Dairy Expo and the U.S. Custom Harvesters Convention.”

Your Next Read - Renewed Confidence: The Dairy Industry is Optimistic in 2025

Mark Carney’s Liberal Win: What It Means for Canadian Agriculture and U.S. Relations

Fri, 02 May 2025 18:12:04 GMT

America’s neighbor to the north has elected a new leader. The result is not a huge surprise to farmers across Canada, but it’s fair to say Liberal Party leader and new Prime Minister Mark Carney likely wasn’t many farmers’ first choice, either.

“I would say farmers are frustrated with the track record of what the (Liberal) Party’s done for agriculture over the last 12 years, and they are probably pretty concerned if they’ll see any change over the next four years,” says Saskatchewan farmer Kristjan Hebert when asked how his farming brethren felt about the result.

Shaun Haney, founder of RealAgriculture and host of RealAg Radio , thinks the aggressive rhetoric from President Donald Trump around the U.S. possibly annexing Canada as the 51st state had an impact. The Conservatives had a large lead in many polls leading up to the election, but there was a seismic shift as Election Day approached.

“The Conservatives couldn’t get out of the trough of many Canadians making the assumption they were just going to roll over to President Trump, which I don’t think was true but definitely was the branding they were labeled with, and now Mark Carney’s first election is over and he’s going to be the prime minister,” he says.

(iStock/Lori Hays)

If there is a silver lining for conservative-leaning Canadian farmers, Haney views Carney as better equipped to manage the high-wire tightrope walk that is dealing with Trump. The U.S. President did back away from the 51st state rhetoric post-election, and the two men share similar backgrounds in global finance. There appears to be a degree of respect between the two.

“I think (Carney) has the opportunity to get some respect (from Trump) in the sense that he’s worked in those circles, but he has been very pro on the climate file, which he backed off during the election. He’s going to want to park that if he’s going to stay out of some of the ire of President Trump,” Haney adds.

Haney talked about the Canadian Election results on AgriTalk today. You can listen to the “Free for all Friday” discussion here:

From the farmer point of view, Hebert says there are actually a few Trump policies that he and many Canadian farmers support; he just wants more respect from the U.S. leader.

“I think most (Canadian farmers) would argue he has enough things to right on his own ship before he needs to worry about everybody else’s,” he says.

One ag market that may become a political football is the dairy industry. There is a lot of shared interests between the two countries in that realm, and Canada has slapped a protectionist 200% tariff on U.S. dairy exports for years, as Dairy Herd Management editor Karen Bohnert wrote in an analysis piece in March.

“Dairy’s going to be really fascinating,” Haney says. “One of the outcomes of the election is the Liberals are going to need support from some of the other parties. That’s going to come from the New Democratic Party or it’s going to come from The Bloc Quebecois, which is based in Quebec. And where is the Canadian Dairy lobby the strongest? Well, it’s in Quebec. So, it’s going to be really fascinating to see where they go on dairy negotiations.”

Another industry with close cross-border ties is the farm equipment manufacturing world. The tariff situation has hit that market with brute force. Many farmers are delaying purchases of new tractors, combines and sprayers until the situation clears up. Manufacturers have responded by laying off factory workers and slowing production of new machines.

An example of the cross-border journey of one piece of agriculture equipment from raw material to delivery on the farm.

(AEM)

RELATED - From the Factory to Your Fields: Where Farm Equipment Is Made

“Six or seven years ago, spending was full bore and it was a good time (in the industry),” Hebert says. “Right now, operations are really looking for efficiencies, and that includes asset turnover, capital utilization and the efficiency of production models. You’re going to see producers really focus on using every dollar to maximize efficiency because the margins just aren’t wide enough right now.”

Haney hopes both countries can come to the table and realize a united North America is stronger than one divided.

“This is a critical trading relationship and economic partnership between two countries that neighbor each other; there are bigger fish to fry,” he says. “China, Brazil and India — those are the countries where we need to be working together and focusing on a partnership, rather than battling each other.”

Your Next Read: Economists Fear Trade War Will Push Agriculture Deeper Into a Recession

Tariff Escalation Clouds the Outlook

Mon, 21 Apr 2025 18:50:07 GMT

After a long winter, farmers have returned to the fields for a new crop year, and milk production is racing higher to the peak output weeks of the year. Milk prices were relatively healthy in the first quarter of this year, and when coupled with welcomed lower feed costs, there were likely profits earned on dairies in most regions of the country. However, recent policy shifts have clouded the outlook for the months ahead, introducing demand uncertainty at a time when milk production and components are increasing. These wildcard factors are driving increased volatility and have forced markets lower in recent weeks, must the concern of farmers who were hoping for continued healthy margins throughout this year.

Increasing Milk Production and Supply Dynamics

On the supply side, milk production returned to growth this year, with volume up 0.5% in January followed by a leap-year adjusted 1% growth rate in February. Globally, production gains are expected as well, with RaboResearch expecting 0.8% YOY growth from the Big 7 export regions in 2025. Regardless of a limited supply of replacements, U.S. cow numbers grew quickly early this year, likely driven by farmers keeping cull rates low to drive as much milk volume as possible when prices were good. With this additional milk after three years of stagnation, the outlook shifts to demand expectations, with trouble brewing for the export markets.

Trade Policies and Their Ripple Effects

Since the U.S. presidential inauguration in January, a range of tariffs have been implemented, with some ongoing and others temporary. Initially, the focus was on China, Mexico, and Canada, key markets for U.S. dairy products. China has issued retaliatory tariffs on a wide variety of U.S. dairy products, making it more expensive for product to move to the country. So far, Mexico has avoided any retaliatory action, but the situation with both Canada and Mexico remains tenuous, with USMCA-covered products like dairy avoiding the worst of the tariff impacts for now. Attention now turns to the major announcement that came in early April: the U.S. will institute a 10% import tariff on goods from all countries, with certain higher tariffs on goods from more than 60 countries. The likelihood of retaliation is high, which could limit dairy exports moving forward. With more products to be consume domestically, markets have reacted accordingly lower.

It is frustratingly impossible to estimate how the trade situation will play out. CME Class III milk futures have sunk below $17 per hundredweight for May and June contracts, reflecting the uncertainty on the trade front. What was initially expected to be a healthy year for on-farm profitability is now being questioned after the increasing trade ambiguity. Thankfully, milk production growth is not overwhelming, and certainly, the tariff situation is ever evolving and could change quickly. Expect ongoing volatility in the short run, with market attention focused on forthcoming policy changes in the coming weeks.

Your Next Read: No, You Aren’t Crazy: It Is The Windiest Start To Spring In 50 Years

Take Our Poll: Do You Agree With President Trump's Use of Tariffs?

Wed, 19 Mar 2025 17:07:05 GMT

Tariff whiplash is consuming the commodity markets — and the possible impact is stirring up quite the debate. At present, President Donald Trump says he’s sticking to his plan to impose additional tariffs on the United States’ top three trading partners starting April 2.

In early February, President Trump announced a 25% additional tariff on imports from Canada and Mexico , a 10% additional tariff on imports from China and a 10% tariff on energy resources from Canada.

Those tariffs were scheduled to go into effect in early March. However, President Trump made the decision to exempt goods from Canada and Mexico under the U.S.-Mexico-Canada Agreement (USCMA) from the 25% tariffs for another month.

What we know today is those exemptions for goods from Canada and Mexico covered under USMCA are scheduled to expire on April 2.

As agriculture waits to see what happens, the commodity markets continue to trade headlines and concerns are mounting about possible retaliatory tariffs. Tariff talk is already impacting input prices for farmers heading into spring.

Share Your Thoughts on Tariffs
In light of the ongoing tariff battle, we have two questions for you:

Do you support President Donald Trump’s use of tariffs as a negotiation strategy?
Do you believe USDA will compensate farmers for losses if agriculture is affected by a trade war, similar to the compensation provided through the Market Facilitation Program?

Click here to share your answers.

NOTE: We appreciate your input. The poll has been closed. Check back on Monday, March 24 for results and analysis.

Mexico and Canada Take Additional Actions to Ward Off U.S. Tariffs

Fri, 28 Feb 2025 20:18:21 GMT

A global stock selloff extended from Asia into Europe as investors worried that President Donald Trump’s planned tariffs on Canada, Mexico, and China could hurt economic growth. Asian shares fell as much as 2.5%, while the dollar strengthened. Trump announced 25% tariffs on Canada and Mexico starting March 4, with Chinese imports facing an additional 10% levy.

Economists warn the move could slow U.S. growth, fuel inflation, and trigger recessions in Mexico and Canada. China vowed “all necessary measures” in response, while Hong Kong saw some of the biggest losses, particularly in Chinese tech stocks.

The euro is at risk of further falls as markets are not fully priced for the prospect of a global trade war, ING analyst Chris Turner says in a note.

The U.S. economy is also showing early signs of strain as President Trump’s aggressive tariffs and federal spending cuts disrupt businesses, weaken consumer confidence, and spark concerns over inflation.

Job cuts across government agencies and funding freezes are forcing local officials to explore tax hikes and bond issuances to stabilize budgets.

Economists warn that escalating trade tensions and regulatory uncertainty could further dampen growth, with projections of higher inflation and slower economic expansion. While the administration insists its policies will strengthen the private sector, financial markets and businesses remain uneasy about the near-term outlook.

Trump Confirms Tariffs on Canada and Mexico, Additional Hike on China

President Trump announced that tariffs on imports from Canada and Mexico will take effect on March 4 as planned, citing inadequate efforts to curb drug trafficking.

Additionally, he declared a new 10% tariff on Chinese goods, doubling the previous levy imposed earlier this month. The move has drawn criticism from businesses and trade groups, warning of economic strain and higher consumer costs.

While Canada and Mexico have taken measures to address U.S. concerns, China’s response remains muted, potentially setting the stage for further trade tensions.

Mexico Extradites Top Cartel Figures to U.S.
In a historic crackdown on cartel operations, Mexico has transferred 29 high-profile cartel operatives to U.S. custody, including Rafael Caro Quintero, the infamous Sinaloa cartel leader wanted for decades.

The move, seen as a major victory for the Trump administration, signals increased co-operation between Mexican President Claudia Sheinbaum and U.S. authorities. Among those extradited is Miguel Ángel Treviño Morales, the notorious ex-leader of the Zetas cartel.

The mass transfer underscores ongoing diplomatic efforts to combat cartel violence and the drug trade across the U.S./Mexico border.

Will this and perhaps other measures that may be announced in the coming days be enough to impact the Trump threatened 25% tariffs on Mexico currently slated to take place March 4? Mexico authorities have arrested more than 700 people since early February, when President Claudia Sheinbaum agreed to deploy 10,000 National Guard troops along the U.S.-Mexico border. Sheinbaum said she was planning to have a telephone conversation with Trump in the coming days to follow up on the agreements reached by both leaders early this month. “We hope that we can make this call to close the agreement,” she said this week.

Canada’s ‘Fentanyl Czar’
As for Canada, it sent the country’s new “fentanyl czar” and cabinet ministers to meet with Trump’s border czar, Tom Homan, this week. Canada named the czar as part of an agreement earlier this month with Trump to increase its efforts to curb the amount of fentanyl crossing over from Canada to the U.S. Canada has argued that the amount of fentanyl seized at the Canadian border is a fraction of what is found at the southern border.

Even More U.S. Tariff Hikes Ahead
There are several actions set for April 2, from the completion of trade policy reviews ordered on Inauguration Day to the unveiling of 25% tariffs on automobiles, pharmaceuticals and semiconductors.

That is also the planned date for the announcement of Trump’s levies on reciprocal trade, which will seek to equalize U.S. tariffs with the duties and nontariff barriers imposed by other nations.

A White House official said a report will be released on April 2 that will “outline the equivalent tariff rate” for other nations and the “mechanics for how they would be implemented.” Details for some countries might be released before others, the official added. The official also declined to comment on the timeline for reciprocal tariffs, but said any talk of a bottleneck in implementing the trade agenda is “premature.”

Trump Trade Strategy Unfolding
Trump administration officials believe that a trade policy combining reciprocal trade action with sector-specific tariffs would be legally stronger and cause less disruption than a broad tariff approach.

This strategy would still allow the U.S. to impose tariffs on significant parts of the economy while minimizing harm to consumers and markets. The sectoral tariffs, particularly on steel, aluminum, and copper, could be announced on April 2. However, their implementation would likely fall under Section 232 of the Trade Expansion Act, which permits tariffs on national security grounds.

This process generally requires a 30-day notice and comment period, except for steel and aluminum tariffs, which are based on an existing investigation and may be enacted more quickly.

Trump Sows Confusion on Tariffs for Canada and Mexico, Floats 25% Duty for EU Goods

Wed, 26 Feb 2025 21:25:23 GMT

U.S. President Donald Trump on Wednesday raised hopes for another month-long pause on steep new tariffs on imports from Mexico and Canada, saying they could take effect on April 2, and floated a 25% “reciprocal” tariff on European cars and other goods.

A White House official, however, said Trump’s previous March 4 deadline for the 25% tariffs on Mexican and Canadian goods remained in effect “as of this moment,” pending his review of Mexican and Canadian actions to secure their borders and halt the flow of migrants and the opioid fentanyl into the U.S. Trump sowed confusion during his first cabinet meeting on Wednesday, when he was asked about the timing for the start of the duties for Canada and Mexico and replied that it would be April 2.

“I have to tell you that, you know, on April 2, I was going to do it on April 1,” Trump said. “But I’m a little bit superstitious, I made it April 2, the tariffs go on. Not all ofthem but a lot of them.”

Trump’s comments prompted jumps in the value of the Canadian dollar and Mexican peso versus the greenback.

Canada’s Finance Ministry and Mexico’s Economy Ministry both declined to comment on Trump’s remarks.

U.S. Commerce Secretary Howard Lutnick said the fentanyl-related actions were paused for 30 days but referred to “overall” tariffs on April 2. He did not specify whether the March 4 deadline was still in effect.

“So the big transaction is April 2, but the fentanyl-related things, we’re working hard on the border,”
Lutnick said during the cabinet meeting. “At the end of that 30 days, they have to prove to the president that they’ve satisfied him in that regard. If they have, he’ll give them a pause, or he won’t.”

EU Tariff Rate

Trump has targeted early April for imposing reciprocal tariffs that would match the import duty rates of other countries and offset their other restrictions. His trade advisers consider European countries’ value added taxes to be akin to a tariff.

Trump, asked whether he has decided on a tariff rate for goods from the European Union, replied: “We have made a decision, and we’ll be announcing it very soon, and it’ll be 25%, generally speaking, and that’ll be on cars, and all of the things.”

He said the EU is a “different case” from Canada and takes advantage of the U.S. in different ways.

“They don’t accept our cars. They don’t accept, essentially our farm products,” Trump said, adding that the EU was formed “in order to screw the United States.”

Roberta Metsola, president of the European Parliament, is in Washington and will meet U.S. lawmakers on Wednesday, a spokesman said. She is not slated to meet with any Trump administration officials.

New U.S. Trade Representative Confirmed

Also on Wednesday, the U.S. Senate voted 56-43 to confirm Jamieson Greer as Trump’s new U.S. Trade Representative, putting a veteran of the Republican president’s first-term trade wars fully on the job.

Greer, who served as chief of staff to former USTR Robert Lighthizer, won the support of five Democrats, including both senators from Michigan, the center of the U.S. auto industry.

Trade groups welcomed Greer’s confirmation, lauding his commitment to consulting with industry and standing up for U.S. businesses, farmers and workers. “We share Ambassador Greer’s desire for an active and pragmatic trade policy that creates

U.S. jobs and more resilient supply chains,” said Jake Colvin, president of the National Foreign Trade Council.

Greer told senators during his Senate confirmation hearing that he wanted to quickly renegotiate the U.S.-Mexico-Canada Agreement on trade to ensure China does not use it as a back door to the U.S. market to avoid other tariffs.

“Right out of the gate, I expect that we’ll be taking a second look at the USMCA,” Greer said.

Asked what changes he would like to see in the pact, Greer zeroed in on further tightening automotive content rules.

“I think we should look at the rule of origin for automobiles and aerospace and other things to look and see if we need to have any kind of restriction on content or value added from foreign countries of concern, or non-market economies,” he said, using language that U.S. trade officials often use to describe China.

(Reporting by David Lawder and Andrea Shalal; additional reporting by Bo Erickson and Ryan Jones in Washington, Brendan O’Boyle in Mexico City and Ismail Shakil in Ottawa; Editing by Dan Burns, David Gregorio and Paul Simao)

Canada, Mexico Hit Back with Retaliatory Tariffs on U.S. Imports

Sun, 02 Feb 2025 13:56:53 GMT

In response to President Donald Trump’s decision to impose 25% tariffs on Canadian and Mexican goods , Canada announced its own 25% tariffs on $155 billion worth of U.S. imports. Mexican President Claudia Sheinbaum also announced its own retaliatory measures to Trump’s 25% tariffs, but no specifics were unveiled.

Canada Strikes Back
Prime Minister Justin Trudeau stated that the tariffs will roll out in two phases, starting Feb. 4 on $30 bil. targeting American products such as alcohol, produce, household goods, and industrial materials, the same day the American tariffs are set to begin.

The tariffs on the other $125 billion worth of goods will come in 21 days, to allow impacted Canadian companies to adjust their supply chains. Trudeau emphasized that Canada’s response would be “strong but appropriate,” while also considering non-tariff measures like restrictions on critical minerals.

The move has drawn mixed reactions within Canada, with provincial leaders urging strategic countermeasures while ensuring minimal harm to the domestic economy. Meanwhile, the White House justifies the tariffs as a measure against drug trafficking and illegal border crossings, further straining trade relations between the two countries.

American items that Canadians tariffs will be applied to include:

Beer, wine, and bourbon
Fruits and fruit juices including orange juice, as well as vegetables
Perfume, clothing, and shoes
Major consumer products such as household appliances and furniture
Sports equipment
Other materials such as lumber and plastics

The government of Canada says a more detailed list of impacted products will be released soon.

More Tariffs Coming
Foreign Affairs Minister Mélanie Joly said on Jan. 31 that Canada’s retaliatory tariffs would be coming in rounds. “There would be a first round of measures, second round of measures, and a third round of measures,” Joly said at a press conference in Washington. “And we’ll keep ourselves also some leverage.”

When asked if Canada would be shutting off oil exports to the U.S., Trudeau said he will be ensuring Canada’s response will be “equitable” and won’t be damaging to one part of the country more than the others. Energy-rich Alberta has strongly opposed any export tariffs on oil, or for Canada to stop oil exports altogether. Trump said on Jan. 31 that the U.S. tariffs will be lower on Canada’s oil and gas exports, at 10%, while other goods will have a tariff of 25%.

Canada’s trade surplus in merchandise with the U.S. was around $100 billion (US$59 billion) last year, according to a report by TD Bank. If Canadian oil exports to the U.S. are removed from the figure, the “scales tip to America’s favor,” the report says, meaning the United States would have a $60 billion (US$41 billion) trade surplus.

Canada and U.S. Conduct Two-way Trade Worth $1.3T Every Year

According to the Canadian Chamber of Commerce, 2.3 million Canadian jobs are supported by exports to the U.S., and 1.4 million American jobs are supported by exports to Canada. A Bank of Canada analysis says that under a mutual 25% tariffs scenario, Canada’s GDP would take a 2.4% hit.

Mexico Announces Plans for Retaliation
Mexican President Claudia Sheinbaum announced its own retaliatory measures to Trump’s 25% tariffs, but no specifics were unveiled. Sheinbaum said she had told her economy minister “to implement Plan B” which she said “includes tariff and non-tariff measures” though it was not clear what those measures were exactly.

China Reacts
China’s Ministry of Commerce denounced Trump’s tariffs, saying they undermine “the normal economic and trade cooperation” between the U.S. and China.

The ministry said it would challenge the U.S. action at the World Trade Organization (WTO) and take countermeasures “to firmly safeguard its own rights and interests.” The WTO dispute settlement mechanism has been dysfunctional for years amid U.S. opposition to the appointment of new judges.

Your Next Read:
Trump Officially Signs Three Executive Orders Imposing 25% Tariffs on Canada and Mexico, 10% Tariffs on China

Trump Officially Signs Three Executive Orders Imposing 25% Tariffs on Canada and Mexico, 10% Tariffs on China

Sat, 01 Feb 2025 23:01:55 GMT

Big tariffs, big risks, big impacts: When populism and commercial agriculture collide.

President Donald Trump signed three executive orders for tariffs Saturday, the first time a president has used powers granted under the International Emergency Economic Powers Act of 1977. The orders also include retaliation clauses that would ramp up tariffs if the countries respond in kind. Trump cut the levy on imports of Canadian energy to 10%.

Trump officially announced plans to impose new tariffs on imports including computer chips, pharmaceuticals (without specifying which, at what level or when it would take effect), steel, aluminum, copper, oil, and gas by mid-February, expanding his administration’s trade war strategy. He said he would put new taxes on imported oil and gas on Feb. 18 and aimed to do the same for steel and aluminum this month or next month. This move is separate from scheduled tariffs — 25% on Canadian and Mexican goods and 10% on Chinese products set for Saturday, Feb. 1 — and aims to pressure Mexico, Canada, and China to address issues such as border security, drug trafficking, and migration.

Here’s the detailed Fact Sheet from the White House .

Of note: Canadian officials were told by U.S. officials on Saturday that the tariffs would be implemented on their goods on Tuesday, according to people familiar with the situation. Senior figures on Capitol Hill were briefed on the decision.

Trump also hinted at additional tariffs on EU products, citing poor treatment of the United States, though details remain vague. The president said he “absolutely” would impose tariffs on their shipments to the United States. “We are treated so badly: They don’t take our cars, they don’t take our farm products; essentially, they don’t take almost anything. And we have a tremendous deficit with the European Union. So, we’ll be doing something very substantial with the European Union,” he said.

Related News: Canada, Mexico Hit Back with Retaliatory Tariffs on U.S. Imports

Big impact. Such levies targeting imports from America’s top three trading partners — which together accounted for more than 41% of the U.S.’ goods trade in the January-November period of 2024 — potentially affect trillions of dollars in merchandise, like cars and farm products.

Trump said there was nothing the three countries could do now to stop the tariffs.

Trump announced general tariffs at his Mar-a-Lago, Florida estate. White House spokesperson Karoline Leavitt said the tariffs would be implemented immediately, but as noted, Canada said tariffs would be implemented on their goods on Tuesday. It typically takes weeks for tariffs to take practical effect.

Key points:

Sector-specific tariffs: New duties will target high-tech and industrial sectors, potentially covering more imports by dollar value than previous tariffs on China. Trump also suggested Friday he’d consider new tariffs on oil and gas, potentially by Feb. 18, though it wasn’t clear what he was referring to.
The duties come on top of existing tariffs on those products. The first Trump administration imposed tariffs on more than $300 billion worth of Chinese goods to respond to an array of unfair trade practices, including intellectual property theft. The Biden administration kept all of them in place and increased rates on $18 billion in goods, including electric vehicles, solar panels, medical equipment, lithium-ion batteries, steel, and aluminum.
A second wave of tariffs could follow a comprehensive review of the trade relationship among the three countries (Canada, Mexico and China) that Trump has ordered completed by April 1.
Exemptions and negotiations: There are ongoing discussions about potential carve-outs for critical industries (like oil and automobiles) amid intense lobbying by U.S. business and labor groups. Some hope for exemptions to mitigate domestic economic risks. Trump told reporters in the Oval Office on Friday that there was nothing Canada, Mexico and China could do to avoid the tariffs before Saturday. “Not right now,” he said, telling reporters that his tariff threat wasn’t a negotiating tool. “It’s a pure economic [decision],” he said. But he did say he was considering a lower tariff on Canadian crude oil — 10% instead of 25% (and that it was he announced on Saturday). At nearly $100 billion in 2023, imports of crude oil accounted for roughly a quarter of all U.S. imports from Canada, according to U.S. Census Bureau data. The tariff on China would be for what Trump said was failing to stop the manufacturing of fentanyl precursor chemicals.

Why a lower tariff on China? Trump’s threats on tariffs are clearly not all bark and no bite, said Wendy Cutler, vice president of the Asia Society Policy Institute in Washington and a former acting deputy U.S. trade representative in the Obama administration. “He’s clearly in an action-oriented mode and wants to use these tariffs to pressure the three countries to address serious U.S. concerns,” Cutler said. “This is the beginning of the story, this is the first salvo in what’s going to be a long four years,” she said. On why the tariff on Chinese goods will be 10% and not 25%, Cutler said this shows that Trump “may be more interested in seeking a trade deal” with Beijing.

Trump said the Biden administration had not enforced trade deals beneficial to U.S. farmers. During a Friday press conference in the Oval Office, Trump criticized the previous administration’s handling of trade agreements. During his previous term, Trump initiated trade disputes, particularly with China, which significantly impacted U.S. agricultural exports. He stated that China had committed to buying $50 billion a year in farm products, but claimed that former President Joe Biden didn’t enforce this commitment. Trump said, “We’re going to enforce it,” referring to this $50 billion annual purchase agreement with China. His recent statements suggest a continuation of this aggressive stance on trade, framing it as necessary to protect American farmers and correct perceived imbalances left unaddressed by the Biden administration.

· Trump’s team was initially considering a grace period between the announcement of the tariffs on Saturday and when they would be imposed, but White House press secretary Karoline Leavitt played down that possibility on Friday. Leavitt said that a Reuters report stating that the tariffs wouldn’t be implemented until March 1 was “false.”

· Reasons for the tariffs. Trump on Friday said, “We’ll be announcing the tariffs on Canada and Mexico for a number of reasons. Number one is the people that have poured into our country so horribly and so much,” he said about migrants that have entered the United States via its southern and northern borders. “Number two are the drugs, fentanyl and everything else, that have come into the country and number three are the massive subsidies that we’re giving to Canada and to Mexico in the form of [trade] deficits,” Trump said. “I’ll be putting the tariff of 25% on Canada and separately 25% on Mexico and we will really have to do that because we have very big deficits with those countries. Those tariffs may or may not rise with time,” he said.

· International reactions: Leaders from Canada, Mexico, and China are preparing responses. The scale of their responses will depend on whether Trump’s actions match his rhetoric, according to officials in Canada and Mexico.

Canada comments. “You will find when we do respond, at least initially, that we will focus on tariffing American goods that actually are sold in significant quantities in Canada, and especially those for which there are readily available alternatives for Canadians,” Natural Resources Minister Jonathan Wilkinson said in an interview cited by Bloomberg on Friday ( link ), hours after Trump reiterated his plan to bring in tariffs on Canada, Mexico and China.
Of note: Canadian officials were told by U.S. officials on Saturday that the tariffs would be implemented on their goods on Tuesday, according to people familiar with the situation.

Canadian Prime Minister Justin Trudeau warned of economic fallout, and Canada even weighed an export tax on oil to undercut Trump’s ability to exclude gasoline price hikes from his tariff fight. Mexican and Canadian officials have expressed frustration that they don’t know what actions would satisfy Trump’s demands, despite weeks of meetings between senior officials. A Canadian contact said Trump “keeps on moving the goal post… If Trump was trying to build anti-American sentiment in a country like Canada (who get mad about little except for hockey), he is executing well.” Trudeau’s government won’t unveil its retaliation list until it sees what the Trump administration moves forward with. After Trump tied tariffs to what he called an “invasion” of migrants and fentanyl, Canadian officials in December unveiled a $900 million border plan, to add helicopters, drones and other surveillance capacity. “Canada’s border is strong and we’re making it stronger,” said Public Safety Minister David McGuinty, speaking to reporters. “When our largest ally raises concerns, we take it seriously.” McGuinty was in Washington Friday to meet with U.S. border czar Tom Homan. Bloomberg reports that Canadian officials come to the discussions armed with documents, charts and even time-lapse videos of certain border crossings. Only 1.5% of migrants apprehended by U.S. Customs and Border Protection in the 2024 fiscal year and 0.2% of fentanyl seized at U.S. borders came from Canada.

Ontario Progressive Conservative Leader Doug Ford spoke in anticipation of Trump’s tariffs on Canadian imports, which are set to be implemented on Saturday, calling them “reckless… I wish I had better news to share but Donald Trump couldn’t have had been more clear. He’s moving forward with these reckless tariffs. He’s chosen to tear up decades of good will that has made life better for workers on both sides of the border, for businesses on both sides of the border, for families on both sides of the border,” Ford said at a campaign event in Brampton.”

Mexican President Claudia Sheinbaum vowed to counter with retaliatory measures. Sheinbaum said: “We have Plan A, Plan B, Plan C, depending on what the government of the United States decides. It’s very important that Mexicans know that we will always defend the dignity of our people, respect for our sovereignty and a dialogue among equals [with the U.S.], not with subordinates.” Sheinbaum noted that Mexico has been open to receiving its citizens sent back under Trump’s plan for mass deportation of unauthorized migrants and that it was prepared to take some from other countries, which represented a concession. Deputy Economy Minister for Trade Luis Rosendo Gutierrez is expected to travel to Washington on Monday, according to reports. But he can’t meet with U.S. trade or Commerce Department officials until they’re formally ratified, they said. Instead, he’ll talk to business leaders and associations. Sheinbaum has also pointed to Foreign Minister Juan Ramon de la Fuente as a key interlocutor to US Secretary of State Marco Rubio. High-level teams from Mexico’s foreign ministry and the State Department are in frequent communication working on security and migration, Mexico is the No. 1 trade partner of the United States, and sends 80% of its exports north. Mexico supplies around half of America’s imported fruit and two-thirds of imported vegetables, in dollar terms — tomatoes, berries, bell peppers, cucumbers. And it’s the largest source of imported beer. Mexico also is the No. 1 provider of medical devices to American hospitals and doctor’s offices, from surgical gloves to scalpels. Mexico emerged last year as the top market for American agricultural exports, totaling $30 billion.

· USMCA impact. While the U.S., Canada and Mexico have a standing free-trade agreement, it isn’t clear that the expected tariff action would immediately violate that pact. The U.S.-Mexico-Canada Agreement (USMCA), like most trade pacts, includes a provision that allows for the imposition of tariffs on national-security grounds.

One of Trump’s tariff goals is to push Canada and Mexico to accelerate a renegotiation of USMCA, now slated for July 2026. President Trump and his supporters believe that imports of cars and steel from Mexico (and China’s involvement in such activity) are weakening U.S. manufacturers. And they say the USMCA, the trade deal Trump signed in 2020 to replace the North American Free Trade Agreement, needs to be updated — or perhaps, scrapped.

Of note: According to economists at S&P Global, of the imports coming into the United States from Canada and Mexico, more than 18% of their value was created in the United States, before being sent to those countries. That’s far more than the proportion for other countries, and a sign of how closely the economies are integrated.

One out of three cars sold in Mexico last year came from China. That means Chinese exports are now meeting Mexican demand for cars, rather than exports from the United States, a blow to the U.S. auto industry.

· Economic impact concerns: “I think there could be some temporary, short-term disruption and people will understand that,” Trump said. Trump said the tariffs “will reinvigorate industry. “The way you bring it back to the country is by putting up a wall. And the wall is a tariff wall,” he said. “The tariffs are going to make us very rich and very strong.” He dismissed concerns that placing steep taxes on many foreign goods would lead to renewed inflation in the United States, where prices are still rising faster than the Federal Reserve’s target. “Tariffs don’t cause inflation. They cause success,” the president said.

Although Trump dismissed worries about inflation and supply chain disruptions, critics warn that broad tariff applications could disrupt trade and lead to higher prices for consumers, especially in border regions heavily reliant on imports from North America. Tariff-related price increases would hit consumers’ wallets at a time when beef prices are near record highs and costs for eggs have climbed after bird flu eliminated millions of egg-laying hens. “Any increase in expenses in the form of a tariff subsequently serves as a ‘food tax’ on consumers for imported products and is not a workable solution,” National Grocers Association spokesman David Cutler said.

Tariffs are paid by American importers and borne by consumers, though offset potentially by price reductions abroad. The burden will fall disproportionally on low-income households who spend more of their income on physical goods relative to higher income households who spend more of their income on services and experiences, which aren’t subject to tariffs.

A new analysis from the Budget Lab of Yale estimated that the proposed tariffs could raise annual costs on households by roughly $1,300. Researchers at the Peterson Institute for International Economics in Washington estimate that a 25 percent tariff on all exports from Mexico and Canada would lower U.S. gross domestic product by about $200 billion for the duration of the second Trump administration. A model gauging the economic impact of Trump’s tariff plan from EY Chief Economist Greg Daco suggests it would reduce U.S. growth by 1.5 percentage points this year, throw Canada and Mexico into recession and usher in “stagflation” at home. “We have stressed that steep tariff increases against U.S. trading partners could create a stagflationary shock — a negative economic hit combined with an inflationary impulse — while also triggering financial market volatility,” Daco wrote on Saturday.

Facts and figures: 17% of U.S. goods exports go to Canada, 16% go to Mexico and 7% go to China and totaled $763 billion in the first 11 months of 2024.

Of note: For many items, there is roughly a three-month wait until the tariffs impact consumer prices as retailers sell their existing inventory that are not subject tariffs. Getting a firm impact assessment of tariffs is difficult because some exporters will absorb some of the additional costs, and currency changes by some countries will temper the impacts. There will also mean changes to trade flow patterns as buyers seek alternatives sources and sellers look for other importers.

Mexican Economy Minister Marcelo Ebrard said a 25% duty on Mexican goods would have a multibillion-dollar impact on U.S. consumers, affecting millions of households. “Mexico is the main exporter of finished products like automobiles, computers, TV screens and refrigerators,” he said, adding that tariffs would also raise prices of fresh fruit and vegetables, meat and beer. “This impact will be greater in border states and cities that are big consumers of Mexican goods, like California, Texas, Florida and Arizona,” Ebrard said.

A Wall Street Journal opinion item ( link ) was headlined: The Dumbest Trade War in History; Trump will impose 25% tariffs on Canada and Mexico for no good reason.

House Ag Committee Chairman GT Thompson (R-Pa.): Trump’s tariff policy is a crucial tool. Following the imposition of tariffs on Mexico, Canada, and China by the United States, House Ag Chairman GT Thompson issued the following statement: “President Trump’s tariff policy has been an effective tool in leveling the global playing field and ensuring fair trade for American producers. Look no further than Colombia’s about face on accepting repatriated criminal migrants at the mere threat of tariffs. After four years of the Biden/Harris administration’s failure to expand foreign markets, which led to an inflated agricultural trade deficit of $45.5 billion, America’s producers deserve an administration that will fight for them. I look forward to working alongside of President Trump to support our hardworking producers and to make agriculture great again.”

House Ag Committee Ranking Member Angie Craig (D-Minn.) released the following statement ( link ): “No one wins in a trade war. The last time President Trump started a trade war, costs went up for America’s family farmers and consumers. The same will happen today. The cost of imported goods like oil, lumber, avocados, tomatoes, bell peppers, lettuce, broccoli, cucumbers, onions and mushrooms and other fresh food are likely to go up for Americans. At a time when farmers are struggling with high input costs and the American people continue to struggle with the cost of groceries, these tariffs will make it more expensive for farmers to grow food and for consumers to buy it. Additionally, when American farmers face the inevitable retaliatory tariffs from our trading partners, their profits take a hit. This action is especially questionable since President Trump’s previous administration negotiated our last trade agreement – USMCA — with Canada and Mexico.”

Imported goods.

(Bloomberg)

Tariffs coverage. Depending on carve-outs, this round of Trump tariffs could cover more trade in dollar value than his first-term duties on China. Trump’s four tranches of tariffs on Chinese goods in 2018-19 covered imports valued at around $360 billion at the time. New tariffs on Canada and Mexico plus additional tariffs on China would — if all items are subject to the action — cover imports valued at more than $1.3 trillion in 2023. Canada and Mexico combined supplied about 28% of U.S. imports in the first 11 months of 2024, according to Census Bureau data. China accounted for an additional 13.5%.

Price hikes: From Tonka trucks to tequila. While cars and lumber are obvious price hike targets, some unexpected items could see increases, too, according to the Wall Street Journal ( link ):

Cherry tomatoes: Canada and Mexico supply much of the U.S. market.
Tonka trucks: Made exclusively in China, these toys may see a price jump from $29.99 to nearly $40.
Maple syrup: With most commercial production coming from Canada, costs could rise. Canada and the U.S. are the only two countries that produce this at commercial scale, according to Canada’s agriculture department. More than 60% of Canada’s production is exported to the U.S.
Tequila & avocados: Mexico is the top supplier, meaning Super Bowl snacks and drinks could cost more.
Smartphones: Previously spared, they may now be hit with new tariffs.
Sledgehammers: Already taxed at 25%, additional tariffs could push prices even higher.

Securing the U.S. border and dealing with fentanyl are the two major goals of the Trump tariffs. According to Robert Marbut, former homelessness czar for the first Trump administration, fentanyl has killed more Americans in the past five years than all wars combined in the past 100 years. Marbut criticized Canada’s liberal drug policies and Mexico’s unstable regions, where cartels control the drug trade. He said that if the U.S. government is going to tackle fentanyl, it needs to recriminalize drugs domestically, stop China from sending precursors, get the biker gangs in Canada under control, and force Mexico to rein in the cartels. “Fentanyl is a hundred times more powerful than morphine,” he said. “Fentanyl dusts will kill children, fentanyl dusts will kill adults. So just three grains of salt equivalent will kill anybody.”

Tariffs as a revenue raiser. Peter Navarro, a Trump trade adviser, told CNBC on Friday that the tariff effort can replace the revenue of tax cuts. “Tariffs can easily pay for that,” Navarro said. “President Trump wants to move from the world of income taxes and countless IRS agents to the world where tariffs, like in the age of McKinley, will pay for a lot of government that we need to pay for and lower our taxes.” Perspective: The non-partisan Congressional Budget Office has put the cost of extending the 2017 tax cuts — Trump’s top legislative priority — at $4.6 trillion over 10 years. A 25% tariff on the more than $900 billion in annual imports from Canada and Mexico would raise roughly $225 billion annually or $2.3 trillion over 10 years if the tariffs had no impacts on trade, which many economists see as unlikely.

Of note: Navarro thinks corn exports haven’t been entirely benign. Navarro said that NAFTA had kick-started America’s illegal immigration problem, because when the United States began exporting corn to Mexico after the trade pact took effect, that put Mexican agricultural workers out of jobs, sending some of them into the United States. “That’s where that began, our illegal immigration problem,” he said.

Tariffs impact on the U.S. ag sector. American Farm Bureau Federation President Zippy Duvall wrote ( link ) to President Trump Friday urging him to consider U.S. farmers before proceeding with tariff action. “American farmers and ranchers rely heavily on export markets for their business success, especially during these times of economic distress across rural America,” Duvall wrote. A targeted approach to tariffs, with specific exemptions for fuel and fertilizer imports, Duvall added, could “minimize negative repercussions” for farmers. Mexico and Canada account for around a third of all U.S. agriculture exports, buying $30 billion and $29 billion, respectively. China received around $26 billion of ag products last year, Duvall said.

U.S. farmers face rising costs amid proposed Canadian import tariff. The proposed 25% tariff on Canadian imports is expected to have significant repercussions for U.S. farmers, particularly in their access to potash and fertilizers. Key Impacts:

Increased fertilizer costs: U.S. farmers rely on Canada for 85-86% of their potash. The tariff could raise fertilizer prices by $50 to $75 per ton, cutting into profit margins and potentially reducing crop yields.
Short-term supply challenges: With spring planting nearing, farmers may struggle to meet urgent fertilizer needs, as domestic production accounts for less than 10% of U.S. demand. Many farmers have already purchased and applied fertilizer for the 2025 crop season, potentially mitigating immediate impacts, but farmers are unclear as to whether their undelivered fertilizer from Canada will be impacted.
Long-term market shifts: Importers may seek alternative suppliers, and Canadian producers could absorb some costs, but a more significant price increase is expected for the 2026 crop season.
Broader economic consequences: Higher fertilizer costs may lead to rising food prices, strain U.S./Canada agricultural ties, and provoke potential retaliatory trade measures from Canada.

Survey quantifies Canadian farmers’ concern about impact of tariffs, potential trade war. New data from Real Agriculture’s RealAgristudies ( link ) confirms and quantifies the level of concern in Canada’s agriculture sector if the U.S. implements 25% tariffs on Canada on Feb. 1. Farmers who primarily produce livestock are slightly more likely to expect an impact on their farm business than mixed or primarily crop-focused farmers. Interestingly, there wasn’t much difference in how farmers see the potential impact when you compare age, farm size and geography.

Results of a survey of 660 Canadian farmers between Jan. 23 and Jan. 29 showed: 59% of respondents expect the proposed Trump tariffs will negatively impact their business. Only 7% feel there will be no effect. Another 7% don’t know if there will be an impact, while 27% see a possible impact of the Trump tariffs on their farm business.

When it comes to the likelihood of a trade war that significantly decreases Canadian agricultural exports, 29% of respondents feel that scenario is very likely, while 46% say it’s likely; 11% feel a trade war that hurts ag exports is unlikely.

Livestock producers tend to see a trade war as more likely (88%) than mixed (72%) or primarily crop producers (75%).

In terms of how Canada should respond to the tariffs, 34% of respondents said “all of the above” to including export tariffs on key items to the U.S., dollar for dollar retaliation and cutting off certain U.S. imports into Canada; 23% of farmers see an export tariff on key items like potash and energy as the best response as the best singular option.

· Tariff impact support for some industries. Canadian government officials have said that they would consider bailing out businesses and supporting workers who are most affected. Some industries would be swiftly disrupted: Agriculture, automobiles and energy suppliers, pillars of all three economies, would be upended by blanket tariffs.

Tariff aid for U.S. farmers. During her Senate confirmation hearing on Jan. 23, USDA Secretary nominee Brooke Rollins addressed concerns regarding potential tariffs and their impact on U.S. farmers. She acknowledged the possible adverse effects of such tariffs on the agricultural sector and emphasized her preparedness to implement support measures to mitigate these impacts. Rollins stated that she had consulted with former USDA Secretary Sonny Perdue, who oversaw $23 billion in trade aid to farmers during the previous Trump administration, and expressed readiness to execute a similar approach if necessary. She affirmed her commitment to working with the White House to ensure that any negative consequences of tariff implementations on farmers and ranchers are effectively addressed. While acknowledging the potential challenges posed by the proposed tariffs, Rollins conveyed confidence in Trump’s understanding of the agricultural community’s concerns. She described Trump as “the consummate dealmaker” who recognizes the significant support he has received from rural America and the agricultural sector.

U.S. farmers and various trade groups are very apprehensive about not only the potential negative impacts of tariffs on the U.S. ag sector, but what they do to garner new trade agreements, especially as they see China, Brazil, Russia and Ukraine announcing new trade accords or in the process of inking new ones.

Upshot: This latest tariff announcement underscores the escalating tensions in international trade policies and the potential for significant economic consequences if the disputes deepen. The tariff moves will test (1) the limits of Trump’s honeymoon period in his second term in the White House; (2) the U.S. economy and its tentative victory over inflation; (3) American consumers’ appetite to swallow fresh price increases; and (4) the patience of allies. The move against allies Canada and Mexico is a signal that no country is safe from his push to reshape global trade. Big experiment, big impacts, big risks, both economically and politically.

Trump Moves Forward With Plans to Impose 25% Tariffs on Canada and Mexico Starting Saturday

Thu, 30 Jan 2025 22:59:43 GMT

President Donald Trump announced that his administration will impose 25% tariffs on imports from Canada and Mexico starting Feb. 1, citing concerns over trade deficits, illegal immigration, and the fentanyl crisis.

Speaking from the Oval Office, Trump justified the tariffs as a response to what he described as excessive migration, drug trafficking, and unfair trade practices. While he suggested the tariff rate could rise further, he indicated that a decision on whether oil imports would be exempted would come soon.

“Mexico and Canada have never been good to us on trade. They’ve treated us very unfairly on trade,” Trump said, pointing to the huge trade deficits between those countries and the United States. Trump also complained about fentanyl entering the country, especially from Mexico.

Trump also reiterated plans to impose tariffs on China over its alleged role in fentanyl trafficking and suggested additional sectoral tariffs on industries such as pharmaceuticals, semiconductor chips, and steel. The policy shift signals a potentially disruptive turn in North American trade relations, threatening key industries like automotive and energy.

Market Reacts
Market reactions were immediate, with oil prices rising above $73 a barrel, the U.S. dollar strengthening, and the Canadian dollar and Mexican peso dropping. The move has triggered warnings of economic fallout, with both Canada and Mexico vowing to respond with retaliatory measures.

Five Key Questions to Ask

There are five key questions regarding tariff situation:

Will they be announced Sat., Feb. 1?
Will there be a last-minute agreement with Canada and/or Mexico?
What authority will be used to implement any tariffs?
Will there be any exemptions? Ongoing negotiations suggest a possible shift toward targeted measures, particularly affecting steel and aluminum, while oil may receive exemptions.
Will there be an implementation grace period to enable more negotiations?

Tariffs as a Tool to Pressure Canada and Mexico
The proposed tariffs are intended to pressure the two countries into negotiating on migration, drug smuggling, and reforms to the USMCA. The strategy reflects Trump’s preference for using tariffs as a tool to secure compliance with U.S. demands, as seen in a recent, albeit reversed, threat against Colombia.

While both Canada and Mexico have made overtures to address U.S. concerns, Trump’s administration remains unsatisfied. Canadian officials have prepared a list of retaliatory measures and expressed frustration over unclear demands and limited communication. Mexico, meanwhile, has stepped up efforts to curb migration and drug trafficking but faces similar obstacles in negotiating directly with Trump’s yet-to-be-confirmed economic team.

If enacted, the tariffs could disrupt key industries, particularly the ag sector and automotive manufacturing, where supply chains depend on cross-border collaboration. Critics warn of potential economic fallout, including higher consumer prices and a possible recession in Canada.

Despite these risks, Trump’s advisers, including Commerce Secretary nominee Howard Lutnick, advocate for a “tariffs-first” approach to bring trade partners to the table.

If tariffs going into effect on Feb. 1 and the tariff threats materialize, it potentially triggers a new trade war on the continent.

Too Soon?
Some feel Feb. 1 will be too early for any serious tariffs action. Reasons: Trump wants his top trade officials (Commerce Secretary, U.S. Trade Representative, Treasury Secretary, etc.) at their desks. That may take beyond Feb. 1, depending on Senate confirmations.

Also, Trump’s 23 trade executive orders assigned a review of prior trade agreements, trade deficits, practices, etc., with an April 1 deadline. One task involves the White House Office of Management and Budget assessing how foreign government subsidies impact U.S. procurement, with that report due by April 30.

Trump’s Pick for Commerce Secretary Back Tariffs, Slams Canada on Dairy
Howard Lutnick, President Trump’s nominee for Commerce Secretary, strongly defended tariffs and criticized Canada over dairy trade during his Senate confirmation hearing.

Lutnick accused Canada of treating U.S. dairy farmers “horribly” and vowed to secure better trade conditions under the USMCA, which President Trump wants a renegotiation on an accelerated timeline.

Of note: Canadian Pacific Kansas City says it expects shipments in North America to grow this year despite the looming threat of tariffs from the Trump administration.

Lutnick dismissed concerns that tariffs drive inflation, citing China and India’s policies, and expressed support for broad-based tariffs over a selective approach.

Lutnick also linked Trump’s proposed 25% tariffs on Canada and Mexico to border security and fentanyl concerns.

Lutnick said he prefers an “across-the-board” approach to imposing tariffs on foreign goods to put pressure on other countries to lower their own barriers to U.S. exports.

“Our farmers, our ranchers and our fishermen are treated with disrespect” by countries around the world, Lutnick said. “We need the disrespect to end.”

To accomplish that, Lutnick said he favors using across-the-board tariffs on all imports from a particular country, rather than a much more targeted approach.

“I think when you pick one product in Mexico, they’ll pick one product,” Lutnick said. “You know, we pick avocados, they pick white corn, we pick tomatoes, they pick yellow corn. All you’re doing is picking on farmers, which is just not going to happen.”

Canada Gears Up for Potential Trade Tensions with Trump

Tue, 07 Jan 2025 17:41:24 GMT

As expected, Prime Minister Justin Trudeau announced his resignation after more than nine years in office, citing declining approval ratings and internal party discord.

Trudeau, currently the longest-serving leader among G7 nations, plans to step down as head of the Liberal Party within months but will remain prime minister until a successor is chosen. Parliament is suspended until March 24 as the leadership transition unfolds.

“Canadians deserve a real choice in the next election, and it has become obvious to me, with the internal battles, that I cannot be the one to carry the Liberal standard,” Trudeau said.

The incoming Liberal leader will become Canada’s 24th prime minister but faces an uphill battle, with the Conservative Party currently favored to win the next election.

Meanwhile, Mark Carney, the former governor of the Bank of Canada and Bank of England, said he’s considering entering the race to replace Justin Trudeau as Canada’s prime minister. Canada’s currency strengthened after Trudeau said he plans to resign.

Bottom line:

Trudeau’s resignation reflects a culmination of long-standing issues, including declining popularity, internal party dissent, and external political pressures. Conservative leader Pierre Poilievre amplified demands for Trudeau’s resignation and early elections.

Gearing Up for Trade Tensions

As President-elect Donald Trump’s inauguration nears, Canada is preparing for potential trade challenges following Trump’s threat of a 25% tariff on Canadian imports. The Canadian government is considering a proactive approach, including the possible early release of a retaliatory tariff list.

A report from The Globe and Mail reveals that Canada might unveil a list of American goods subject to retaliatory tariffs ahead of time. This strategy was deliberated during a Canada/U.S. cabinet committee meeting on Jan. 6, 2025, though no final decision has been made.

Outgoing Prime Minister Justin Trudeau and his cabinet have been holding strategic meetings, emphasizing the importance of the issue. Canadian officials, including Trudeau, have engaged with Trump’s team to mitigate tensions. Ontario Premier Doug Ford proposed restricting energy supplies to certain U.S. states as a retaliatory option.

Says a Canadian contact: “This retaliatory list idea is very similar to past Canadian strategies and will likely strategically target certain states to influence reaction.”

Your Next Read:

GOP to Propose ‘Biggest Bill in American History'; Includes Tax Cuts, Deregulation and Border Security

Important Trade Talks Dominate this Year's MILK Business Conference as Farmers Watch Incoming Administration

Tue, 17 Dec 2024 20:25:54 GMT

Trade was a big part of the discussions that occurred last week at the 2024 MILK Business Conference, especially on how things could change with the incoming Trump administration. Dairy producers are keeping a keen eye on what potential tariffs could mean for top dairy trading partners. U.S. Farm Report host, Tyne Morgan, explains more.

“It’s amazing how quickly rhetoric can change,” Morgan says. “Last year here at the MILK Business Conference, the focus was on the lack of attention on trade with the current administration. Today, we’ve put the focus back on trade and what the Trump administration could mean for ag both in terms as to what’s at risk and what dairy could possibly gain.”
In the latest Farm Journal Ag Economists’ Monthly Monitor, Morgan asked this question:

Ag Economists’ Monthly Monitor

(Farm Journal)

“No surprise, 63% said China,” Morgan says. “But 37% says it’s Mexico.”

The National Corn Growers Association and the American Soybean Association recently conducted analysis just looking at China and what Trump’s possible 60% tariff on China could mean.

“In that type of situation, we’re looking at a 60% tariff on U.S. corn and soybeans, [which] translates to a 13 cent per bushel drop in corn price in the projection modeling that [National Corn Growers] did,” says Krista Swanson, lead economist at National Corn Growers Association. “But that doesn’t account for Mexico. And if we have a situation with Mexico, that’s a whole different ballgame because over 40% of our corn exports have gone to Mexico this year. They are a really critical trading partner for corn.”

According to Morgan, there is another big wild card when it comes to trade.

“During the first Trump administration, the U.S. struck a trade deal with China. Much of that created new and more demand for many U.S. ag goods. We actually had record corn exports to China as a result of Phase 1. But will Trump pick up where he left off? If so, that could actually be good for U.S. ag trade,” Morgan says.

Canada and U.S. Dairy

While Canada may not top the list as the biggest concern for agriculture if trade hiccups emerge, it is a big issue for U.S. dairy. And the potential for conflict is already stirring as U.S. dairy leaders question Canada’s commitment to the United States Mexico Canada Agreement (USMCA) signed during the last Trump administration.

According to the International Dairy Foods Association (IDFA), members have yet to receive the full range of dairy access promised by Canada under the agreement.

“Clearly the contract that we wrote isn’t fully being abided by,” says Mike North, president of producer division at Ever.Ag. “So, if we are going to spend some time to review this and revisit the language around dairy, I don’t know that we need to change it, but from a behavior standpoint we just need to get execution of the language that already exists.”

U.S. Dairy Product Exports to Canada

(USDA)

How big is this market? According to the USDA, from 2010 to 2021, U.S. dairy product exports to Canada (adjusted for inflation) rose 48% from $466 million in 2010 to $691 million in 2021.

Your Next Read: Schreiber Foods Announces New Expansion to Missouri Cheese Plant

Trump Vows New Canada, Mexico, China Tariffs That Threaten Global Trade

Tue, 26 Nov 2024 16:56:12 GMT

By Costas Pitas

President-elect Donald Trump on Monday pledged big tariffs on the United States’ three largest trading partners - Canada, Mexico and China - detailing how he will implement campaign promises that could trigger trade wars.

Trump, who takes office on Jan. 20, said he would impose a 25% tariff on imports from Canada and Mexico until they clamped down on drugs, particularly fentanyl, and migrants crossing the border, in a move that would appear to violate a free-trade deal.

Trump separately outlined “an additional 10% tariff, above any additional tariffs” on imports from China. It was not entirely clear what this would mean for China as he has previously pledged to end China’s most-favored-nation trading status and slap tariffs on Chinese imports in excess of 60% - much higher than those imposed during his first term.

The two posts on Truth Social represent some of Trump’s most specific comments on how he will implement his economic agenda since winning the Nov. 5 election on promises to “put America first”.

“On January 20th, as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States, and its ridiculous Open Borders,” Trump said.

The U.S. accounted for more than 83% of exports from Mexico in 2023 and 75% of Canadian exports.

The tariffs may also spell trouble for overseas companies like the many Asian auto and electronics manufacturers that use Mexico as a low-cost production gateway for the U.S. market.

Trump’s threatened new tariffs would appear to violate the terms of the U.S.-Mexico-Canada Agreement (USMCA) on trade. The deal which Trump signed into law took effect in 2020 and continued the largely duty-free trade between the three countries.

Canada and the United States at one point imposed sanctions on each others’ products during the rancorous talks that eventually led to USMCA. Trump will have the opportunity to renegotiate the agreement in 2026, when a “sunset” provision will force either a withdrawal or talks on changes to the pact.

After issuing his tariff threat, Trump held a conversation with Canada’s Prime Minister Justin Trudeau in which they discussed trade and border security, a Canadian source familiar with the situation said.

“It was a good discussion and they will stay in touch,” the source said.

Trump could be counting on the threat of tariffs to prompt an early renegotiation of USMCA, said William Reinsch, a former president of the National Foreign Trade Council.

“This strikes me more as a threat than anything else,” Reinsch said. “I guess the idea is if you keep hitting them in the face, eventually they’ll surrender.”

Mexico’s lower house leader Ricardo Monreal, a member of the ruling Morena party, urged “the use of bilateral, institutional mechanisms to combat human, drug and arms trafficking.”

“Escalating trade retaliation would only hurt the people’s pocketbooks and is far from solving underlying problems,” he said in a post on social media platform X.

Trump’s announcement sparked a dollar rally. It rose 1% against the Canadian dollar and 1.6% against the Mexican peso, while share markets in Asia fell, as did European bourses in early trade. S&P 500 futures were little changed.[FRX/][MKTS/GLOB]

China: No One Wins Trade Wars

On China, Trump accused Beijing of not taking strong enough action to stop the flow of illicit drugs into the U.S. from Mexico.

“Until such time as they stop, we will be charging China an additional 10% Tariff, above any additional Tariffs, on all of their many products coming into the United States of America,” Trump said.

A Chinese embassy spokesperson in Washington said China believed that China-U.S. economic and trade cooperation was mutually beneficial. “No one will win a trade war or a tariff war,” Liu Pengyu said.

The embassy also cited steps it said China had taken since a 2023 U.S.-China meeting after which Beijing agreed it would stem the export of items related to the production of the opioid fentanyl, a leading cause of drug overdoses in the United States.

“All these prove that the idea of China knowingly allowing fentanyl precursors to flow into the United States runs completely counter to facts and reality,” the spokesperson said.

Chinese foreign ministry said in a statement that China was willing to continue anti-drug cooperation with the U.S. on the basis of “equality, mutual benefit and mutual respect.”

“The U.S. side should cherish China’s goodwill and safeguard the hard-won sound situation of Sino-US drug control cooperation,” the ministry said.

Chinese Vice President Han Zheng, speaking at a supply chain expo in Beijing on Tuesday, said China was ready to work with other countries to build an open world economic system and maintain the stability of global industrial and supply chains.

China’s economy is in a vulnerable position amid a prolonged property downturn, debt risks and weak domestic demand.

In the run-up to the Nov. 5 election, Trump floated plans for blanket tariffs of 10% to 20% on virtually all imports. He also said he would put tariffs as high as 200% on cars coming across the U.S.-Mexico border.

Mexico’s finance ministry said of Trump’s tariff pledge: “Mexico is the United States’ top trade partner, and the USMCA provides a framework of certainty for national and international investors.”

Economists say Trump’s overall tariff plans, likely his most consequential economic policy, would push U.S. import duties back up to 1930s levels, stoke inflation, collapse U.S.-China trade, draw retaliation and drastically reorder supply chains.

(Additional reporting by Kylie Madry, Jasper Ward, David Lawder, Andrea Shalal, David Ljunggren, Brendan O’Boyle, Joe Cash, Ethan Wang and Liz Lee; Editing by Stephen Coates, Edwina Gibbs and Mark Potter)

General Mills Sells North America Yogurt Operations in $2 Billion Deal

Thu, 12 Sep 2024 14:37:05 GMT

General Mills (GIS.N), will sell its North America yogurt business to French dairy firms Groupe Lactalis and Sodiaal in a $2.1 billion deal, the Cheerios maker said on Thursday.

Lactalis will acquire the U.S. business and Sodiaal will buy the Canadian unit, the company said.

Reuters reported in April that General Mills was working with investment bank JPMorgan Chase (JPM.N), to attract interest from potential buyers for the business, which houses brands such as Yoplait and Liberté.

Packaged food makers are divesting units not delivering high growth to keep a tight leash on costs while expanding their core brands as they respond to consumers seeking cheaper alternatives.

The divestiture will help sharpen focus on key brands that have stronger margins, Chief Executive Officer Jeff Harmening said in a statement.

Yoplait is facing tough competition in the U.S. from privately held yogurt brand Chobani, as well as Danone’s (DANO.PA), Dannon brand.

The North American yogurt business contributed about $1.5 billion to General Mills’ fiscal 2024 net sales.

The Golden Valley, Minnesota-based company expects the deals to close in 2025, and will dilute adjusted earnings per share by about 3% in the first 12 months after the close.

Bloomberg News earlier on Thursday reported that General Mills was in talks to sell the North America yogurt operations to Groupe Lactalis and Sodiaal.

Yoplait was started by a group of French dairy farmers in 1964. It partnered with General Mills in 1977 through a franchise agreement giving the maker of Bisquick pancake mix exclusive rights to market the brand in the U.S.

Then in 2011, General Mills acquired a 51% stake worth $1.2 billion in Yoplait from private equity firm PAI Partners and French dairy cooperative Sodiaal, which retained the remaining stake.

In 2021, General Mills sold the European operations of Yoplait to Sodiaal.

Your Next Read: U.S. Braces for a Hotter and Drier Fall as La Niña Looms

Which Foreign Country Owns the Most Farmland in the U.S.? Hint: It's Not China

Thu, 11 Jan 2024 17:24:37 GMT

Controversy continues to grow across the U.S., and China is the primary target of the new rules. However, China doesn’t own the most farmland in the U.S., according to a new USDA report. It’s actually Canada, which accounts for 32%, or 14.2 million acres.

Rounding out the top five are the Netherlands at 12%, Italy at 6%, the United Kingdom at 6% and Germany at 5%. Together, citizens in those countries hold 13 million acres, or 29%, of the foreign-held acres in the U.S. China owns less than 1%, or 349,442 acres.

(Farm Journal)

All told, 43.4 million acres of forest and farmland in the U.S., or 3.4% of all ag land, is foreign owned as of Dec. 31, 2022. Roughly 30 million of those acres are reported as foreign-owned, with the remainder primarily under a 10-year-or-longer lease. Of the 30 million, 66% is owner-operated, 14% has a tenant or sharecropper as the producer and 12% report a manager other than the owner or a tenant/sharecropper as producer. The remaining 7% are “NA.”

USDA says the two biggest Chinese-owned companies with land holdings in the U.S. are Brazos Highland and Murphy Brown LLC, which owns Smithfield Foods. Brazos Highland reported owning 102,345 acres, and Smithfield owns 97,975 acres.

(Farm Journal)

The top five states with the largest Chinese holdings are:

Texas at 162,167 acres
North Carolina at 44,776 acres
Missouri at 43,071 acres
Utah at 32,447 acres
Virginia at 14,382 acres

USDA reports those five states combined account for 85% of China’s farmland ownership. In Texas, USDA reports China has long-term leases associated with wind energy, and in North Carolina and Missouri, ownership is tied to Smithfield and producers who contract for pork production.

More States to Take Up Possible Bans in 2024

Foreign-held farmland has become a hot button topic on Capitol Hill. Farm Journal Washington correspondent Jim Wiesemeyer thinks it will continue to gain momentum in 2024 as a political ploy used by candidates.

“It’s an emotional issue, and it’s not a simple issue either,” Wiesemeyer says. “I was recently in Missouri, and some commodity leaders worry about the negative consequences of going too far. No one’s saying China should not be watched relative to buying farmland near airports, national security is involved in that case, but more than a few farmers are looking at the potential downsides for pork producers who contract with Smithfield and the number of acres they own.”

One of those unintended consequences is playing out in Arkansas.

“I’m announcing Syngenta, a Chinese state-owned agrichemical company, must give up its landing holdings in Arkansas,” says Gov. Sarah Huckabee Sanders, referencing a 160-acre research site owned by Northrup King Seed, a Syngenta subsidiary.

Eric Boeck, president of Syngenta Seeds North America, told Farm Journal editor Clinton Griffiths: “EPA and USDA many times require us to do work and permitting right in the same state as we’re going to sell products. One of the first things we have to make sure we figure out is how we work with the local community to make sure we’re still getting products tested in their backyard, so we have the ability to sell those products.”

(Farm Journal)

Syngenta argues if they sell that particular farm, Arkansas farmers will be at a disadvantage because research can’t be done in the same weather and soil conditions.

“We’re heavy in the soybean market in Arkansas, some of those maturity zones, we have a very significant market share and savings,” Boeck says. “We want to make sure we’re protecting those farmers’ abilities to be able to use our products.”

Wiesemeyer says the bigger issue for U.S. farmland might be solar panels, with farmers in states like Missouri reporting companies have offered to pay more than $1,000 per acre cash rent to put solar panels on their farm. At such a high price, he says it’s eating up acres of farmland, with the potential to grow even more in 2024.

U.S. Expands Dairy Clash with Canada Through the USMCA

Wed, 21 Dec 2022 22:03:15 GMT

The U.S. is requesting dispute-settlement cosulations for a third time over Canada’s dairy quotas, saying it has found more areas of “deep concern” and that the nation’s measures are inconsistent with it’s obligations under the U.S.-Mexico-Canada Agreement (USMCA) .

Washington is expanding its challenge to include Canada’s use of a market-share approach for determining the quotas, according to the Office of the U.S. Trade Representative. It said Ottawa’s method prohibits eligible applicants--including retailers and food-service operators--from accessing allocations.

Under the USMCA that took effect in July 2020, Canada conceded to granting more duty-free or lower tariff access across dairy products though a tariff-rate quota, or TRQ, with products including:

Milk
Cream cheese
Yogurt
Ice cream

But Canada was allocating a bulk of those imports to processors, limiting the ability of other groups like retailers to buy U.S. products.

“We remain very concerned by Canada’s refusal to honor USMCA commitments,” Ambassador Katherine Tai said. “Rather than work toward meeting its obligations, Canada persists in implementing new dairy policies that are inconsistent with the USMCA, and which continue to deny U.S. workers, farmers, producers, and exporters the full benefits of market access they were initially promised.”

The U.S. previously won a case under USMCA dispute settlement procedures, but has rejected Canada’s solution to the situation and requested additional consultations in May on the policies. Those discussions raised additional concerns by the U.S. and prompted this latest request for formal discussions on the issues.

If there is no eventual solution, the U.S. can request another dispute settlement panel be established.

More on policy :

How the $1.7 Trillion Omnibus Spending Package Might Impact Your Operation
4 Ways to Advocate for Ag in the New Farm Bill

What Should We Do With Canada?

Thu, 22 Sep 2022 02:16:05 GMT

The following commentary does not necessarily reflect the views of AgWeb or Farm Journal. The opinions expressed below are the author’s own.

Since the War of 1812, the relationship between the U.S. and Canada has been as good as any neighborly relationship could be, given it’s lasted a couple of centuries, give or take. We haven’t tried to invade our brethren to the north for more than 200 years, and save for Stanley Cup domination and that curling defeat in the Winter Olympics earlier this year, we’ve gotten along pretty well.

So why can’t we get along with Canada on trade issues?

Our respective dairy markets couldn’t be more different. Canada is carefully controlled under supply management. Ours is a free market system that gives producers the freedom to produce as much as they want (although some coops and processors have implemented their own supply management programs). The Canadian supply management system has kept herd sizes low while dairies in the U.S. continue to grow, with large herds soaking up the cows from smaller dairies as they go out of business.

My parents told me never to do business with family members, and maybe that’s the problem. Those kinds of partnerships always look good on paper and start out swimmingly, then inevitably go south as time goes by. There is always that moment in time when one brother says or does something to make the other brother mad. What starts as a crack grows to a canyon.

The canyon of discontent between our two countries started last February when Canada put the Class 7 pricing system in place. Suddenly, the market for a few U.S. processors dried up, and with it the milk supply contracts for about 100 producers. As a result Canadian imports of milk protein solids dropped 37% in 2017, or about $50 million in value. Meanwhile Canadian cheese production, which is a heavy user of milk protein solids, grew by 7%.

My friend Stan Van Keulen, who dairies near Vancouver, says Class 7 was just a “business transaction” Canada put in place to become competitive.

“Our processors decided to buy from Canada and not the U.S,” he says. “If U.S. processors wanted to continue to ship product to Canada, they could have dropped their price.”

Tensions between Canada and the U.S. grew when President Trump decided to open negotiations around the North American Free Trade Agreement (NAFTA). Class 7 has been a burning ember of debate in these negotiations. The U.S. wants Class 7 thrown in the dumpster along with the Canadian supply management system. Doing so would break down the fence and allow greater market access for U.S. dairy products.

But as Van Keulen says, “be careful what you ask for.” Breaking down trade barriers would also create greater market access for our competitors. It would also allow Canadian dairy producers the chance to expand. Canada would instantly become a larger player on the world market, and a bigger U.S. competitor. Usually in business you want less competition, not more.

Dairy producers on both sides of the border are waiting to see what NAFTA 2.0 holds. While an “agreement in principle” is due any day now, there’s nothing in the agreement pertaining to dairy. It’s like negotiators decided to focus on what both sides could agree on before tackling something neither could come to a consensus around. Don’t look for a NAFTA resolution anytime soon. Shaun Haney of realagriculture.com in Canada says years passed between when Canada and the EU had an agreement in principle on the Comprehensive Economic and Trade Agreement (CETA) and when the agreement was actually signed. The same would probably hold true for NAFTA.

While negotiators and politicians on both sides of the border continue to debate, producers go on producing milk. After all, Van Keulen’s dairy in Vancouver is not much different than say, John Jacobs’ dairy north of Green Bay, Wis. They’re both milking cows and relying on the resulting income to help their business survive and thrive. Perhaps a group of Canadian producers should sit down with U.S. producers over a few beers and get the whole thing hashed out.

Because in the end, it really comes down to creating a viable economy for both Canadian and U.S. dairy producers. So let’s let Canada have their system and we’ll have ours. Sure Canada is a significant trading partner for U.S. dairy products—No. 3 on the list—and we should keep that relationship and grow it if we can. But as we try to knock out another brick in the wall and gain greater access, let’s not forget the other burgeoning and untapped markets. After all, it’s always better to do business with members of someone else’s family.

What do you think? What should we do with Canada? Leave them alone or break down trade barriers? Let me know at mopperman@farmjournal.com

Dairy Report: Hundreds of Dairy Cattle Perish Due to Floods, Farmers Still Recovering

Tue, 07 Dec 2021 19:18:47 GMT

We’re learning more about the damage done to several dairies in Washington State as the result of flooding at the end of last month. The Seattle Times reporting 100 dairy farms in two counties were impacted by the near record flooding. Many of the farms located near the Skagit and Nooksack Rivers.

You are seeing video of the damage to Sumas, which is just south of the U.S. Canadian border. It’s reported one dairy farm, Bumgardner Dairy near Mt. Vernon, lost 44 cows in the flood waters.

A Go-Fund-Me page says the family struggled in frigid, chest deep water for hours trying to save as many as they could but watched cow after cow succumb to the cold and collapse in the swift current.

Also impacted, EPL Feed in Sumas, the largest feed mill in the region. It supplies feed to about 100,000 milking cows in the area. It was offline until just a few days ago. Washington State is the 10th largest milk producing state in the nation.

The situation is not that much better as you go north into Canada and British Columbia. People in Abbotsford are just starting to clean up after an evacuation order was lifted over the weekend. The province’s agriculture minister reporting 420 dairy cattle died in the flooding along with 628,000 poultry and 12,000 hogs.

Richard Bosma was just one of the many farmers in the area who was forced to leave but worked with friends and neighbors to help rescue his animals. The good news, 98% of the cows in the Sumas Prairie region survived the flood waters.

Flood Update from Canada: “When We Got to the Calves, They Were Up to Their Chins in Water”

Sat, 20 Nov 2021 14:46:02 GMT

Canadian dairy farmers have recently been hit hard due to torrential rains that pummeled parts of western Canada’s British Columbia. Some areas of the province received a month’s worth of rain in two days, causing severe flooding and mudslides. These extreme events have forced thousands of people, including numerous dairy farmers along with their animals, to evacuate.

Richard Bosma, a dairy farmer in Abbotsford, British Columbia, is just one of the many farmers in the area who was forced to get out.

“The police knocked down our door at 6 a.m. on Tuesday telling us to evacuate, and we said we couldn’t because we have cows. So, we watched the water get closer and closer. It stayed kind of at the same level for a long time and it stabilized for a bit, but then it came across the road, which is the high point, and it kept coming and was speeding up,” Bosma says.

With the water rising and barns quickly beginning to flood, Bosma was thankful he was able to rely on his friends and neighbors to help rescue his animals.

“People came with cattle trailers, and we were able to get the milk cows out first. When we got to the calves (in the calf barn), they were up to their chins in water. We left the young animals [heifers] on wet packs and planned to get them out the next day,” he noted.

However, flood levels were continuing to rise, and the Barrowtown Pump Station used to divert water into the Sumas River was being overwhelmed by the floodwaters.

“Around 7 p.m. that night, they informed us the big pumps were about to fail because they were going to be underwater. They had a huge crew of 200 people who were sandbagging, and they managed to keep the pump safe and running,” Bosma says. “We were able to go back in and get to our young animals that next morning, but we couldn’t get to them with pickup trucks anymore. When we left, the water was about 2’ to 2.5’ deep, but it was around (4 to 4.5) when we returned.”

The family had to act quickly. The decision was made to hook the cattle trailer up to a tractor to get the animals to safer ground. One by one, animals were loaded onto trailers and transported to neighboring farms. Currently, Bosma’s 80 cows and additional calves and heifers are being housed at six to seven different farms throughout the province.

With the animals now taken care of, Bosma and his wife were able to evacuate their farmhouse and stay safe with family on dry ground. However, despite relatively nice weather over the last few days, flood levels have not improved. In the coming weeks and months, Bosma, along with hundreds of other farmers throughout the area, will have a long road to recovery ahead of them.

“In the barn, we’ve got pumps and (tractor) motors underwater, and those are going to take a lot of work to get running again. Our barn office computers are shot. I found our semen tank floating on its side, and that had a few embryos and expensive semen inside. And who knows how much mold and damage is going to come from all of this. Everything is going to take a lot of work, but we’re going to take everything one day at a time” he exclaims.

According to The Guardian, Abbotsford, one of the areas hit hardest by the phenomenon, is one of Canada’s most intensively and diversely farmed areas. Home to more than 1,200 farms, it supplies half of the dairy, eggs and poultry consumed by British Columbia’s 5.2 million residents.

Thousands of dairy cattle in the area have been transported to various farms throughout the country, but unfortunately, not all have survived.

“There are probably hundreds of farms that have been affected by flooding. Some are still underwater, some are on dry locations and we have thousands of animals that have perished. We have many, many more that are in difficult situations,” Lana Popham, minister of agriculture for British Columbia, told The Guardian.

As farmers continue to try and find ways to care for their animals, Bosma notes the (BC Dairy Producers Association) is working to provide assistance.

“Our association has been phoning every day to see what they can do to help. They have a little more influence on the local government than we do, and they’ve been able to issue some permits to people that allows them to get into areas where we otherwise wouldn’t be able to go and let them tap into some emergency fuel. They’ve been working pretty hard to help us out and help keep track of where our animals are located,” Bosma says.

While water levels in some parts has declined, mudslides in the area have destroyed roads and bridges, severing access to the country’s largest port in Vancouver. This is on top of an already disrupted supply chain. Dairy farmers remaining in the flood-affected area are being asked to dump milk due to impossible transport.

Over the course of a week, the community has been forced to rally together to overcome this natural disaster.

Holger Schwichtenberg, chair of the board for the B.C. Dairy Association, told The Canadian Press, “This is an example of an industry coming together when things really get ugly. We’re doing the best that we can with the situation that we’ve been handed and it’s a tough one.’'

Canadian Dairy Farmers Hit Hard by Devastating ‘Atmospheric River’ Floods

Thu, 18 Nov 2021 15:02:57 GMT

Canadian dairy farmers have recently been hit hard by two days of torrential rains spanning across the Pacific Northwest portion of the U.S. and into British Columbia. Some areas of the province received 8 inches of rain on Sunday, the amount that usually falls over the course of a month. The phenomenon is known as an ‘atmospheric river.’

Abbotsford, B.C., is one of the areas hit the hardest. Dairy farmers in the area were told to evacuate on Tuesday as floodwaters washed over one of British Columbia’s prime agriculture areas. According to The Canadian Press, the flooding situation has forced farmers to lean on each other to save their animals.

“When I see calves that are underwater that they rescued and threw in the boat to save them, on one hand it breaks my heart, but on the other hand, I’m just so impressed with our community, our farming community, and how they come together and help each other. And that’s what they’re doing,” Henry Braun, Mayor of Abbotsford, told CTV News.

According to CTV News, volunteers used boats and personal watercraft to rescue animals and haul them to transport vehicles.

“This is an example of an industry coming together when things really get ugly,” said Holger Schwichtenber, a Canadian dairy farmer and board member of the BC Dairy Association. “We’re doing the best that we can with the situation that we’ve been handed and it’s a tough one.”

Schwichtenber is expected to take 25 to 30 cows from farmer impacted by the flooding and transport them to his own farm in Agassiz.

“You’ve got trucks, you’ve got neighbors, you’ve got whoever’s got a pickup truck or something to haul cattle in and you start moving them to higher ground or you’ve made arrangements to get them off-site,” Schwichtenber told The Canadian Press.

Mudslides in the area have destroyed roads and bridges, severing access to the country’s largest port in Vancouver. This is on top of an already disrupted supply chain. Dairy farmers in the flood-affected area are being asked to dump milk due to impossible transport, according to The Canadian Press. The B.C. Milk Marketing Board is advising its producers in the areas of Abbotsford, Chilliwack and the B.C. Interior to dispose of their milk by dumping it into manure piles.

The floods have temporarily shut down much of the movement of wheat and canola from Canada, one of the world’s biggest grain exporters, Reuters reports. The disruption could also hit exports of potash.

Giant Australian Steer has U.S. Competition for World's Largest Bovine

Fri, 20 Nov 2020 05:19:21 GMT

An Australian steer the height of a professional quarterback has some competition for world’s biggest bovine and a good chunk of them are American cattle.

Knickers, a nearly larger than life Holstein , captivated the internet because of his size. The steer from Western Australia weighs more than 3,000 lb. and measures in at 6 foot 4 inches. At that height Knickers is not only the same size as Super Bowl winning quarterbacks Tom Brady and Eli Manning, the steer is in the running for world’s tallest steer.

Once news spread of Knickers size a host of cattle stepped up to the measuring tape to throw their names into the contest.

A California steer named Cowboy comes in at very similar measurements standing 6 foot 4 inches and weighing 3,000 lb.

“He’s just under a hair, and when I mean hair, a hair, under the Guinness World Record for largest steer,” says Lindsey Krause, owner of Cowboy.

To the north, a steer at Kismet Creek Farm in Manitoba, Canada , named Dozer measures in at 6 foot 5 inches. Similar to Cowboy and Knickers, the Canadian entry to the contest is also a Holstein.

“He’s just the friendliest animal,” says Canadian farmer Karl Schoenrock of his large steer Dozer. “He’s not very intimidating at all, except for his size. If you stood next to him he’ll just lay down next to you.”

Back in the U.S., Mississippi farmer touts two steers that could be in running for world’s biggest steer.

Bubba Pinkard’s two steers, named Milo and Otis for the kid’s movie of the same title, weigh a combined 5,900 lb. Milo comes in at 6 foot 7 inches and 3,200 lb., eclipsing Australia’s viral sensation by 3 inches.

“I believe I’ve got Knickers beat with this old boy right here,” Pinkard tells local news station WLBT while sitting atop Otis with his buddy Milo nearby.

Otis is at nearly the same size as Knickers weighing 2,700 lb. and measuring 6 foot 4 inches. The two steers eat about 100 lb. of range cubes per day and feed on hay or graze grass to help keep their size.

“I saw that Knickers, they had him in a pen with a bunch of what I call yearlings,” said Pinkard. “They were young cows, young calves and if I put this one against a young calf, he’s gonna look huge.”

If Pinkard’s two Mississippi steers don’t qualify for the Gunnies World Records there might be another bovine in the Magnolia State that could qualify for its lack of size. Lil’ Bill, a premature calf weighing only 7.9 lb. , is also capturing the hearts of people online after Mississippi State University College of Veterinary Medicine shared a picture of the calf on Facebook. The small calf is being cared for by veterinarians and they are trying to determine if Lil’ Bill suffers from a form of dwarfism.

AgDay TV national reporter Betsy Jibben has been doing her own research into the world’s biggest bovine and she found a young dairy cow named Paige who could contend in the future:

Forget Knickers. Meet Paige. She’s only 68 inches tall 😜 (and from a California dairy). #agchat pic.twitter.com/C27PDxpiff
— Betsy Jibben (@BetsyJibben) December 10, 2018

For more on big and small cattle read the following stories:

Canada Officials Said to See Rising Odds Trump Leaves NAFTA

Fri, 20 Nov 2020 03:01:28 GMT

(Bloomberg) -- Canadian government officials say there’s an increasing likelihood U.S. President Donald Trump will give six-months’ notice to withdraw from NAFTA.

The officials, speaking Wednesday on condition they not be identified, declined to say whether they now think the likelihood of Trump following through on repeated threats to quit the pact now exceed 50 percent. The loonie fell along with Mexico’s peso and yields on Canada’s government bonds.

A White House official, speaking on background, said there hasn’t been any change in the president’s position on Nafta.

Trade relations between the two countries have taken a dramatic turn this week, with Canada escalating its trade spat with the U.S. by filing a World Trade Organization complaint over American duties against Canada and other countries. U.S. Trade Representative Robert Lighthizer responded earlier Wednesday, calling that move a “broad and ill-advised attack.”

Odds Bank of Canada Governor Stephen Poloz will raise interest rates at the meeting next week also declined to 82 percent on the news, from 87 percent Tuesday.

Trump withdrawing from NAFTA “was always a risk, but that risk is clearly more elevated now,” said Brian DePratto, senior economist at Toronto-Dominion Bank. “It’s hard to gauge how much credibility Poloz will assign to the types of reports we’re seeing today, but it does make it easier for him to maintain a holding pattern.”

A sixth round of negotiations will begin this month in Montreal. Talks to overhaul the North American Free Trade Agreement between the U.S., Canada and Mexico began in August. They have so far yielded little firm indication of whether a deal can be reached to update the pact, the officials said.

The Canadian dollar fell 0.9 percent to C$1.2574 against the greenback at 3:05 p.m. in Toronto. The peso fell 0.8 percent to 19.3963 per dollar. The rate on Canada’s two-year government bonds declined 8 basis points to 1.71 percent. The yield on 10-year debt was down six basis points to 2.14 percent, with the rate on similar-maturity U.S. Treasuries little changed.

“The market’s been too complacent regarding NAFTA termination risk for too long,” said Bipan Rai, a Toronto-based foreign-exchange and macro strategist at Canadian Imperial Bank of Commerce. “Outside of the Bank of Canada meeting next week, there should be upward pressure on USD/CAD as that premium increases into the next round of negotiations in Montreal beginning Jan. 23.”

Mexican Economy Minister Ildefonso Guajardo has said that Mexico won’t negotiate under duress and will leave the table if the U.S. initiates the withdrawal process. The Canadian officials said Wednesday they were not sure how Mexico would react to any withdrawal notice but that Canada would keep negotiating after one was given.

A withdrawal notice doesn’t mean NAFTA would be killed -- a country can give notice and then not actually leave.

©2018 Bloomberg L.P.

Canada PM Stands by Supply Management as U.S. Debates NAFTA

Fri, 20 Nov 2020 03:01:05 GMT

Canadian Prime Minister Justin Trudeau says he will continue to defend the supply management system that protects the Canadian dairy industry in talks about revamping the North American Free Trade Agreement.

A U.S. House subcommittee raised the long-standing trade irritant at its hearing on NAFTA negotiations Tuesday, suggesting Canadian measures to protect the industry will be a sticking point.

Congressman Ron Kind, a Democrat from Wisconsin, says he does not want to jeopardize a crucial trading relationship with Canada but thinks the system should be more balanced.

The Trump administration released its objectives for a new trade deal earlier this week, including better access for its agricultural exports.

Trudeau said Tuesday that Canada has signed significant trade deals with Europe, North America and elsewhere while protecting the supply management system.

Canada Responds to Trump's Dairy Trade Admonishments

Fri, 20 Nov 2020 03:00:42 GMT

Canada’s ambassador to Washington said Tuesday night that President Donald Trump is wrong when he says Canada’s trade practices in the dairy industry are “very unfair.”

Ambassador David MacNaughton said in a letter to the governors of Wisconsin and New York that Canada is aware of their letter to Trump asking him to address Canadian dairy practices.

“Canada does not accept the contention that Canada’s dairy policies are the cause of financial loss for dairy farmers in the United States,” MacNaughton said.

He said the facts don’t bear that out and attached a U.S. Department of Agriculture dairy outlook report that “clearly indicates the poor results in the U.S. sector are due U.S. and global overproduction.”

Trump spoke out against Canada on Tuesday in a way he’s not done before, saying Canada has been “very, very unfair” to dairy farmers and “we’re going to start working on that.”

Canada has decided to impose import taxes on ultra-filtered milk, a protein liquid concentrate used to make cheese. It had been duty free but Canada changed course after milk producers there complained. About 70 dairy producers in both U.S. states are affected.

MacNaughton writes that the Canada dairy industry is less protectionist than that of the U.S, which he says has employed technical barriers to keep Canadian dairy out of the U.S. market.

“It is important that we work together to grow the middle class, and not lay blame where it does not belong,” MacNaughton writers.

The U.S. dairy lobby has accused Canada of “systemic disregard” of its trade obligations, while the Canadian industry accused its American rival of “scapegoating.”

Canadian Prime Minister Justin Trudeau is worried about Trump’s protectionist talk and has sent his ministers to the U.S. to talk about the importance of Canada’s trade relationship with the U.S.

When Trudeau visited the White House in February Trump praised the “outstanding” trade relationship between the United States and Canada, saying he would only be “tweaking” it going forward.

Relations with the U.S. are crucial as more than 75 percent of Canada’s exports go to the U.S., while 18 percent of U.S. exports go to Canada. There are fears among Canadians that they could be hurt as Trump targets Mexico in a re-negotiation of the North American Free Trade Agreement.

Cuomo: Proposed Canadian Milk Rules Could Hurt NY Exports

Fri, 20 Nov 2020 02:59:56 GMT

New York Gov. Andrew Cuomo has written to Canadian Prime Minister Justin Trudeau about possible regulations on milk that Cuomo says could devastate the state’s dairy export industry.

The Democratic governor said Monday that if the rules proposed in Canada take effect it could amount to a $50 million market loss for New York’s dairy industry.

Cuomo’s office says the proposal would restrict imports of ultra-filtered milk from New York state. Ultra-filtered milk is the type of milk used in the production of cheese and yogurt.

Canada is New York’s largest international export market, and dairy products are the state’s largest agricultural industry.

Cuomo’s office says state officials have been working for months on a possible resolution that could satisfy both New York and Canada.

Ahh, Canada

Fri, 20 Nov 2020 02:00:53 GMT

I’m always amazed at how boxers can beat each other’s brains in for 15 rounds and then shake hands like old friends once the bout is over. Leading up to and during the fight there is a certain level of gamesmanship that has to go on in order to intimidate the other fighter. Once the fight is over the two combatants can put those harsh words and actions aside and show respect for the hard fight put up by their opponent.

Now that the U.S. and Canada have signed a dairy trade agreement, maybe we can all be friends again.

The fight between the U.S. and Canada has gone on for some time. The U.S. has never been a fan of the restrictive Canadian supply management program, and Canadians can’t understand how the U.S. can continue to grow production at an unbridled pace.

Things really hit the fan when Canada started with Class 7 pricing and about 100 U.S. producers had to scramble to find new homes for their milk. Canadians called it a business move to provide more opportunity and level the playing field for Canadian processors. The U.S. and most of the rest of the world said it was a low blow, especially when Canada started escalating exports of whole milk powder at rock bottom prices.

The mudslinging came at the highest of levels. President Trump was quick to bring dairy into the trade debate, elevating the industry overnight in places where dairy producers are rarely thought of. His comments at and about Canadian Prime Minister Trudeau just made the Canadian negotiators more resilient, right up until the last hour.

Even as the two world leaders barraged each other with nasty tweets, the fight never reached the producer level. In fact it was suggested that the whole debate could have been settled in a border bar with a few producers from each side over a pitcher of cocktails. Too bad that never happened.

Now that it’s over, it’s hard to say who won. Certainly U.S. dairy producers were happy to hear good news after months of not so good news. But the new agreement will be phased in over time, so any real benefit won’t be seen for a while. You can read more about the agreement starting on page 14.

It’s safe to say producers north of the border feel like they got the shaft. A Canadian dairy producer friend of mine called me the day after the news of the agreement broke. Needless to say he wasn’t happy. “The Canadian dairy industry was on the trading block,” he said. He and other Canadian producers felt like their industry was thrown under the bus to save what negotiators saw as more important issues.

Whether or not the agreement will mend business relationships lost between processors and their Canadian counterparts remains to be seen. When asked if this deal will mean their company will start shipping ultra-filtered milk to Canada again, Trevor Wuethrich president of Grassland Dairy Products who cut the bulk of lost farmer contracts last May said, “It’s like your ex-wife calling back and wanting to reconcile. I don’t know if I want to take her back.”

Regardless of who won or lost, now it’s time to move on and make amends. After all, even Rocky and Apollo Creed ended up best of friends. Let’s hope there’s not a rematch.

What do you think? Who won the U.S./Canada show down? Send me a note at mopperman@farmjournal.com

fairlife Crosses the Canadian Border, Now Made from 100% Canadian Milk

Fri, 13 Nov 2020 17:24:28 GMT

Starting this month, our neighbors to the north will soon be producing their own fairlife products. Additionally, the ultrafiltered milk, which has 50% less sugar and 50% more protein than regular milk, will be made from 100% Canadian dairy.

“We are very proud to announce that fairlife is now made in Canada with 100% Canadian milk,” said Darlene Nicosia, President, Coca-Cola Ltd. “We brought fairlife to Canada because we believe its superior taste and nutritional benefits are the perfect fit for Canadian families who are seeking greater balance in their everyday lives.”

The company was originally founded by Indiana dairy farmers Mike and Sue McCloskey in 2012, who also own and operate Fair Oaks Farms. The McCloskeys’ formed a joint venture between The Coca-Cola Company and Select Milk Producers, a cooperative started by the McCloskeys in 1994 In January 2020, the Coca-Cola acquired the remaining stake of fairlife LLC from its joint venture partner, Select Milk Producers. Today, Coca-Cola owns 100% of fairlife LLC, up from its previous 42.5% minority stake.

The brand’s journey to become 100% Canadian began in 2018 with an $85 million investment for a new, state-of-art dairy facility in Peterborough, Ontario.

“This has been a great collaboration between Dairy Farmers of Ontario (DFO) and fairlife,” said Murray Sherk, DFO Chair. “We are excited to work together with fairlife and further support the Canadian dairy industry.”

With the new Canadian product rolling out across the country, Canadians can find 1.5L bottles of fairlife 2% White, 2% Chocolate, Whole and Skim featuring the Canadian Maple Leaf and the Dairy Farmers of Canada “blue cow” logo to honor the brand’s new Canadian roots.