How what happens in Washington can impact Canadian farmers
By Diego Flammini
Assistant Editor, North American Content
Farms.com
Donald Trump is officially the president of the United States after taking the oath of office earlier this morning.
And with Trump’s vision of putting America first and renegotiating trade deals, some are wondering about the potential impact on Canadian agriculture.
“If you look at our exports of ag products coming off the farm and going to the U.S., that’s 30 per cent of our Canadian ag GDP,” J.P. Gervais, chief agricultural economist with Farm Credit Canada said during a recent podcast. “It’s hard to argue that whatever comes up in the United States is not going to impact us.”
Gervais said it’s not as if farmers are going to see a 30 per cent decrease in farm income. He suggests agricultural trade between the two countries may not change all that much.
“I’m pretty positive we’re going to be able to enjoy a similar kind of market access we’ve enjoyed in the past.”
But Gervais did outline three areas where trade could be impacted by the new administration.
Livestock trade
With the help of the World Trade Organization, Canada fought America’s country of origin labeling (COOL) laws. But a memo from November 2016 suggests Trump’s cabinet could take another look at it.
“That would be hurtful for Canadian producers,” Gervais said during the podcast. “The supply chain between Canada and the U.S. when it comes to livestock is well integrated.”
Relationship between the U.S. and China
China is a major player in agricultural trade, especially when it comes to soybeans. The new president said China devalues its own currency, which could position Canada awkwardly.
Gervais said if the trade relationship between China and the U.S. sours Canada could sell some of its crops to China in place of the United States.
Ethanol mandate
Currently, about 40 per cent of American corn goes towards ethanol production. Gervais said some of Trump’s cabinet opposes the ethanol mandate. But given where the president’s support came from during the election, ethanol production may stay the same.
“A lot of (Trump) support comes from the U.S. Midwest, so I think it’s safe on that end.”