Weather and international trade top the list of concerns for grain, oilseed and pulse crop producers heading into 2025.
Unfortunately, both issues are out of farmer control making it difficult to develop a risk management plan.
Likely the biggest unknown is the United States and incoming President Donald Trump, who is already promising to impose 25 per cent import tariffs on Canadian and Mexican imports unless the two countries tighten border security for drugs and illegal immigrants.
A steep tariff would be especially harmful for canola oil, durum, oats, and mustard, which heavily rely on the US market.
Market Analyst with Leftfield Commodity Research Chuck Penner told attendees of the Saskatchewan Canary Seed Development Commission Annual General Meeting last week he was initially worried about the tariff threat but had since “dialed that back” by thinking “at least Trump has given us his requirements, if you will, for avoiding those 25 per cent tariffs.”
“So then it’s back to our own court to see about meeting those kind of requirements and so we can hope that somebody’s going to figure that out and we can avoid that but it is a significant risk.” Penner added.
Number two on the list of trade concerns is the ongoing Chinese investigation into Canadian canola imports. It was announced in retaliation for Canada placing tariffs on Chinese electric vehicles. China has been buying a lot of canola in advance of potential trade action which could occur next year.
Penner hopes that if China blocks Canadian canola, it will reopen the door to Australian canola which has been restricted due to blackleg concerns.
“You would have Australia canola flowing into China, then Canada needs to make up exports to places like to Japan and to Mexico and to UAE. In a full year, (that) could be three or four million tonnes – that would go a long way to avoiding a sharp slowdown in Canadian exports and pressure.”
Then there is the ongoing issue of Indian tariffs on pulse crop imports. Currently, Canadian yellow pea exports to India are restriction-free until December 31st and Canadian lentils enjoy the same freedom until March. However, Penner believes Indian will re-introduce tariffs on yellow peas in the new year but not for lentils due to a smaller Australian crop.
“It is a bit of uncertainty in that whole market and right now we’re watching what’s going on with India.” Penner said.
Canary Seed Outlook
It could be a couple of years or more before higher canary seed prices return.
Right now, current values are 32 cents a pound with some new crop contracts at 30 cents.
A good-sized crop last year and lower than expected sales are keeping prices down. Mexico has been a bright spot, accounting for about half of this crop years sales to date but there was no fall shipment at Thunder Bay.
Penner provided the market outlook at the Sask Canary Seed AGM. He believes ending stocks for canary seed will remain very large for the 2024-25 crop year.
“And those don’t tend to go away in just a single year. They can hang on for a while because you have to reduce production in ’25 and even with reduced production you’re still carrying in maybe even over 100-thousand tonnes and so you’re going to have sizable supplies again even for 25-26′.” Penner added.
Traditionally, canary seed growers will wait for higher prices because the crop can be stored for multiple years.
“Whether we’ll get a little bit of a bump when we get to February-March will largely depend on that Thunder Bay shipment but with the sizable supplies that we have it’s going to be hard for that price to really rise meaningfully.”
All of this leads to fewer acres in 2025, according to Penner. He says the reduction in 2025 canary seed acreage could be as much as 25 percent.
Statistics Canada had canary seed production for 2024 at 185,253 metric tonnes, up from 112,210 tonnes in 2023.
(With files from CJWW)
