Possible Trump tariffs remain big question mark for southwestern Ontario farmers
CBC News | Posted: January 6, 2025 4:08 PM | Last Updated: January 6
Agricultural economist Philip Shaw says there's potential for 'major disruption'
Canadian economics have been in the headlines a lot lately as it relates to the United States, possible tariffs and president-elect Donald Trump.
Much of the talk has been about manufacturing — auto specifically — especially here in southwestern Ontario.
But did you know that roughly 50 per cent of what we expert as a country is the food eat related to agriculture and farming in Canada?
Dresden, Ont., farmer and agricultural economist Philip Shaw says the possible tariffs remain the biggest question mark for southwestern Ontario farmers in 2025.
He talked with CBC Radio's Windsor Morning producer Peter Duck about his expectations for the new year — and a quick reflection on how things were in 2024. Here's a portion of that conversation.
How was the year as a whole for agriculture … looking back at 2024, especially here in southwestern Ontario?
Generally, we think about how good the crop was this past year and we did have a pretty good crop.
I know some of the crops in Essex this past year were better than they were in 2023. Generally speaking, what you found with grain prices in 2024 going into 2025 was that we got down to the lowest levels we've seen since just before the pandemic and the last Trump presidency.
And so what this has meant is there's less revenue in the agricultural economy here in southwestern Ontario.
How do you see the incoming Trump presidency affecting farming and agriculture?
We don't know how tariffs are going to be applied, but if you take the man at his word, obviously with agricultural commodities going back and forth across the border all the time, there is a capacity there for a major disruption.
Just think about a beef calf that is born in Alberta and maybe shipped across the border and fed and raised some more, then shipped back across the border and raised … and then back across the border again to be slaughtered ... or sold in either country.
You could just imagine the complexity that there is with regard to tariffs being applied that many times, similar to grain being transported across the border, especially in western Canada. We don't have a lot of that. We do have some of it here in eastern Canada and southwestern Ontario, where grain might be transported back and forth across the border.
We've seen the Canadian dollar affected recently. And as we go ahead in January, we'll just have to see how that pans out.
Other than the tariff issue and the uncertainty there, are there any other things that you'll be watching for as we head into 2025 in agriculture?
Well, interestingly enough, American farmers really came out and voted for Mr. Trump. And recently they just announced disaster assistance in the United States.
For instance, American farmers, for corn, will be receiving a payment from their government for $43.80 an acre. And soybeans, they'll be receiving $30.61 an acre, and wheat, they'll be receiving $31.80 an acre in emergency payments, up to a maximum of $125,000 per farm, as I understand it.
If you could just imagine that type of subsidy … coming into southwestern Ontario, you can imagine what a boom that would be to grain and seeds producers in Ontario and Quebec and other places.
But essentially, that's what our competitors are doing, and it makes us less competitive because that grain that may or may not be coming across the border is now going to be highly subsidized.
This affects us because it has a tendency to drive down grain futures prices, which wouldn't be good for us here in Ontario and Quebec and further out into western Canada.
And of course there could be retaliation from other countries if the Americans put tariffs on. For instance, the last time they did, they put tariffs on Chinese steel and aluminum, and the Chinese responded by putting tariffs on American soybeans going into China. And that had a huge effect on the general price of soybeans going down very quickly.
I know we're talking in kind of theory here, in superlatives regarding possible tariffs … but it's certainly something we have to consider, to take the man seriously at his word.