New U.S. and Canadian tariffs raise input-cost concerns for farmers facing thin margins.
U.S.-Canada Tariffs Add Pressure to Farmers' Thin Margins
Share
The U.S. imposed tariffs of up to 50% on roughly $20 billion in Canadian imports after trade negotiations broke down. Canada responded with tariffs on U.S. goods, including dairy products and agricultural equipment. Economist William Ridley says farmers may feel the greatest effects through higher input costs.
Transcript
PM Matt Carney, Canada - “Canada will match Washington’s new tariffs dollar for dollar in order to protect Canadian workers, farmers, families, and businesses.”
The Trump administration imposed new tariffs of up to 50% on Saturday, August 22nd, tagging a wide range of imports from the nation’s number two trading partner worth roughly $20 billion. According to the White House, the duties are designed to protect America.
Canada’s counter-tariffs are being tacked onto U.S. goods including dairy products and agricultural equipment. All of this comes at a time when farmers are dealing with thin margins.
William Ridley, Ag & Consumer Economics, University of Illinois - “It’s just another match on the fire so to speak. To make it even incrementally more expensive, well that’s going to affect margins. That’s going to affect profitability.”
Only a small portion of Canada’s tariffs are aimed at U.S. farmers, but the American agricultural sector would feel the pressure if they go into effect.
William Ridley, Ag & Consumer Economics, University of Illinois - “It’s kind of a theme that whereas the dispute may have originated over one set of concerns, you often see agriculture and other sectors getting brought in and that’s known as cross retaliation.”
Trade policy uncertainty may already be affecting decisions on farms and ranches across the country even before the Canadian tariffs take effect on September 8.
William Ridley, Ag & Consumer Economics, University of Illinois - “So, even though we might not see so much on the output side, in terms of prices received for your products, on the input side, I think that’s where it’s going to be felt most.”
For Market to Market, I’m Laurel Bower.
Watch More
Brad Matthews examines grain rallies, soybean demand and pressure on the cattle market.
Rationing was discussed in multiple grains by Brad Matthews, as were strategies if corn can't hit a yield of 175 bushels per acre.
Three rounds of beef imports aim to lower retail prices but the moves concern U.S. cattle producers.
Tariffs, beef imports, Western water limits and rallies across all the grain markets.
Ongoing drought plagues the West, but Idaho farmers and policymakers have a plan in place so the federal government never has to step in to mitigate water use.
Chris Robinson talks the volatility of the markets and to know where your break even is.