Differences of Being on the Menu or at the Table

[Yeager] There's a new way to stay connected and know what's happening with market to Market. When you subscribe to Market Insider, one email and a lot of information awaits you. Go to markettomarket.org and subscribe to Market Insider. A couple of years ago, we had a podcast called Yes, Virginia, Phil in Canada Is Real. That was our first conversation in this format here on the MToM podcast with Philip Shaw from Dresden, Ontario. If you say I've heard that before, if you watch the TV show, yes, you have Phil in Canada or Phil in Ontario, as we say, is a regular contributor to questions. And he's often watching from his position in Ontario. In fact, he's farther south. And a lot of our producers in the United States, he's watching American agriculture, he's watching Canadian agriculture. He's watching tariff and trade discussions between the two countries. We're going to talk about that today. His view as a Canadian farmer of what's going on in Canada and in America when it comes to agriculture, trade and tariffs, will get his perspective about the relationships between the two countries. Well, maybe talk about one tiny little sports reference, but really we're going to get into some nostalgia and something that's going on with Canadian farmers right now that is this installment of the podcast. A reminder, if you have an idea for me, send it to me. Paul Yeager at Iowa. PBS.org. We look forward to you joining us each and every week here on the MToM podcast. I'm Paul Yeager, which is produced at Iowa PBS and through the Market to Market TV show. Now let's get to Philip. What do you think, Phil, can Americans and Canadians still be friends?

[Philip Shaw]  We sure can. We've always been friends and will be friends into the future. And we have a few hiccups once in a while, but we're, We're going to be okay. That's what I believe, anyway.

[Yeager] Have you always felt that way about the U.S.? That there's always, I mean, you're so close to not saying you can see America from your house, but, I mean, you are right there in that area where you're farther south than a whole bunch of people that watch this program.

[Shaw]  I might be close. Yeah, I might be farther south. And you, I'm not quite sure, but,

[Yeager] It's very close.

[Shaw]  Have I always felt that way? No, I haven't always. So unfortunately, it's been lately that I've. I've felt those things. But, we'll be okay. We'll be okay. We, you know, I always remind everybody that we fought wars 150 or 100 and, 50 years ago, in places like Detroit and the battle of the Thames here in Ontario and Queenston Heights. And Canadian students always talk about the War of 1812. I don't think my friends in the United States know much about it, but I know that both people interpret it a little bit differently. I apologize. There were a few Canadians with the British that they burned down the white House, but those days are long over.

[Yeager] Well, we're getting ready to celebrate America 250. So maybe that. Yeah. That map. Who knows?

[Shaw]  Yeah, yeah. I'm old enough to remember the 200th anniversary, and we had lots of American friends up and on that weekend. I was a teenager at the time. So yeah, that'll be a good big party for you folks down there. So good.

[Yeager] We're going to have even some, some Iowa PBS, events that are centered around America 250 will be kind of fun. We just heard about those last week. Let's put a bow, I guess, on 2025 crop year for Farmer Phil.

[Shaw] Well, here in southwestern Ontario, the stars align quite well. Unfortunately, in the rest of Ontario, there was very bad drought east of Toronto going into Quebec. And the Ontario corn crop was hampered because of that. But with regard to my crop, which is and keep in mind for viewers, I'm about 60 miles east of Detroit, Michigan. I had timely rains. I had a very difficult time getting soybeans planted and getting them to grow. But once I got them to grow at the end of June, I basically I gave up. I couldn't, kept getting heavy rains and couldn't get them out of the ground. But at the end of the day, I had the record, a record corn crop for my farm and, in southwestern Ontario right around here, we had huge yields, much bigger than we've ever had before. And, you know, I've been at this for a while. So I remember when 150 bushels per acre was crazy, and now we're over 100 above that. And, you know, so we did pretty well that last year. Soybeans were above my expectations. So at the end of the day, we use all kinds of risk management tools to help us out. And getting a big crop is always one of the best things you can do.

[Yeager]  Refresh me on Canadian agriculture, counting of acres. What's your version of USDA and how do those reports align with USDA?

[Shaw]  I would say that it's much more important to American farmers. The USDA numbers, frankly, the USDA numbers are very important to Canadian farmers. Keep in mind, I always say there's three countries when you talk about Canadian agriculture. And so Western Canada, which has vast, acreage of, canola, oats and wheat and things of that nature. And there's Ontario which is very synonymous with Michigan, Indiana and Ohio. And then there's Quebec, which is totally different, and where French is the first language and supply management and dairy dominate there. So with regard to accounting information, USDA is very important to everybody. It's especially important to Quebec and Ontario farmers. And I do a lot of writing in eastern Canada, and I follow the USDA all the time. As far as Canadian numbers, I've actually heard quite a lot, quite a bit of that quoted from my American Friends who talk about it's usually about canola numbers and wheat numbers and oats numbers, usually from Western Canada, because our numbers aren't quite as big as they're typically, they don't get quoted in American media. But from a Canadian perspective, we're very keen on USDA reports. And like, for instance, your program market to market. It's big here. It's big. And maybe I helped make it bigger. But, you know, it's down our alley. What we what we what we need the information that we need for our market decisions.

[Yeager] So we've, we've long always, celebrated you as a champion. Phil, of the program. We always appreciate your support, both with questions and, with, endorsements of what we're doing. When you heard the numbers come in in January, you know, you always talk about how big that. We always talk about how big that report number is, regardless of what the end product said or what you believe the end product was that the USDA submitted. What does it mean on that day for you in terms of, gosh, I better have positions set here or here? How much does a Canadian producer pay attention to that? USDA, in terms of their own market?

[Shaw]  Well, it's big, yeah, it's big. I guess I have many opinions about USDA numbers from time to time. That one was huge. 17 billion bushels of corn, plus 17.02, I think it was. And Paul, I can remember telling producers here that we're going to have a huge crop. It's going to be 8 billion bushels. So productivity, it's just been incredible for the American farmer. Just incredible. The difference with this one was though is like 17.02 billion bushels. But you had many analysts on your program talking. My gosh, you know, the the harvested acreage was so much higher than what they were estimated last June and July. And that's what I really had a hard time getting over with is the difference between January and March? They were last year in July? It's hard for me to fathom. And that's why a program like yours is so important for somebody like me. Because I get the different perspectives because it's, you know, in Ontario and Canada, it's a little bit more difficult to get the nuance of these types of things. And also keep in mind that in, in Ontario or, and Quebec, anywhere in Canada, but especially Ontario and Quebec, you have to keep in mind the value of the Canadian dollar. Think of it as Brazilian farmers thinking of the value of the Brazilian riyal versus the U.S. dollar. The Canadian dollar, when it's low versus U.S. dollar, means our cash prices are higher because of that. And so we always have to balance futures prices with what the value of the Canadian dollar is and what our cash prices are. But with regard to the USDA, things have changed through the years. As you know, trading algorithms are all dialed in all the time and they're programed to buy and sell depending on what happens. And, with USDA, they're dialed in like no tomorrow. And so what happened that day? We lost $0.24 on corn. And, you know, we're all standing around looking at each other. But, you know, the algorithms simply don't have emotions like we do. And, so it's something that I know American farmers are key on and they've got lots of opinions on. But from a Canadian perspective, especially eastern Canada, USDA reports are somewhat important. I also feel that knowing your basis levels and knowing future spreads are very important. Frankly, I think it's more important than USDA numbers, but it makes it a little bit more difficult in Canada to monitor US basis values. I'm lucky because I write for DTN, an American company, and so I can get that information rather more easily than you could if you were just here, without that. But, yeah. USDA numbers are important, but we also have to think about foreign exchange. And I know maybe some American, some of my American friends have been thinking about that the last couple of weeks, because the US dollars from sinking, you know, it affects your wheat market and things of that nature. But in Canada, we think about it every day. Every day we think about that. Yeah. 

[Yeager] You just said the e word, the emotions. Let's dive into that a little bit. What's the emotional level right now of a Canadian producer when they see their prime minister have a conversation about American trade? I'm not even saying agriculture. I'm just saying trade right now when you hear whether it was Trudeau. Now, Carney, what goes through your mind?

[Shaw]  Well, I don't think it's not very pleasant. Canadians are used to being more ignored by our American friends versus being part of the conversation. And so, I don't write about politics. I have to comment on it from time to time. Your American president is not the most popular person with Canadian farmers, simply because of what he has said about Canada in the 51st state and Governor Carney, and before that, Governor Trudeau. And he also mentioned about not taking part in NATO exercises, being behind the lines when people died in Afghanistan in different places, plus the fact that on nine over 11, where do you think those planes landed? They didn't land in the United States. They we landed them in Canada that day. So, you know, I think that's just a narrative. That's a narrative. And just you probably know that there's probably you probably have similar, get similar sentiment from some American farmers, some American farmers, not, but it's been pretty tough lately with regard to some of the rhetoric about we don't need Canadian cars, we don't need Canadian steel, we don't need Canadian aluminum. And, you know, it's pretty tough because we have to adjust. And, and, like our Canadian prime minister says, if you're not at the table, you're on the menu. And that's the way it feels. That's the way it feels right now. And, and, but still, I think for most Americans and most Canadians, I'm hoping that we find a way and we continue this good relationship we've had almost forever.

[Yeager] And so your comment, about if you're not at the table, you're on the menu, has that always. Is that a new sentiment?

[Shaw] That's a new sentiment from our prime minister. Yeah, yeah. He spoke in Davos  two weeks ago. And he, he that speech went over very well worldwide. But the American president didn't think it was is so good. But I just want to emphasize that we've had a free trade arrangement with the United States since 1988. And one of the toughest negotiators of free trade was Mr. Reagan. Ronald Reagan was a very tough negotiator, and there was no guarantee that we were going to get that in 1989 when it first came out, because Mr. Reagan was such a tough negotiator. So all American presidents, regardless of political stripe, whether Democratic or Republican, we always feel that they're tough negotiators. And in Canada, we prefer to get along with our friends. And it's the same thing with President Trump. Will we want to get along with President Trump? And I'm sure our Canadian prime minister and the negotiators on both sides will at the end of the day, hopefully we'll find a way. Just some of the rhetoric has just been a little bit more, pointed this time around. And, so hopefully we'll get there.

[Yeager] Has any of the rhetoric become real? Have you seen tangible?

[Shaw]  Oh, definitely. Oh, it's so real. Like, for instance, Canadians, are your largest trading partner, and we are yours. And I think there's about a 40% drop in tourism in the United States. And Canadians aren't traveling to the United States anymore. Simply because they're trying to choose anything. Other than that, you know, that is that is a big thing. There's, a real rupture in the automotive supply between Detroit and Windsor and southwestern Ontario and Michigan because of the tariffs that were put on and then 50% on steel and aluminum. You know, we don't pay the tariffs of American people that pay the tariffs, but it's resulting in a lot less demand. So we're having steel plants closing the same thing with auto plants. Layoffs are here. With regard to agricultural trade, just locally, there's all kinds of it across the US and Canadian border, whether you're shipping seed or whether you're shipping grain. But there's reluctance from American buyers and sellers to go across the border like there used to be. Same as Canadian because of the unsure nature of things. For instance, the American president said last week, if we had a free trade arrangement with China, he put 100% tariffs on Canadian goods. Well, how would Iowa farmers like 100% tariffs on Canadian potash when they're putting that on? You know, so this just comes out of the blue. So it just makes it very, very, very difficult. The fact is that there's a clause in the Usmca that says that Canada won't have a free trade arrangement with China. So, you know, things are uneven right now. And I would be disingenuous to imply that they're not, what? We're hoping to get through this, and I'm sure we will. I would like to hope that. But it's definitely changed the game here. And, you know, like I said, if you're not at the table, you're on the menu. Maybe you'll be both. I don't know, but, you know, it's very real. The sentiment and the change, the change of things. And, I appreciate my American friends. I appreciate your program. It's great every week, great for Canadian farmers. And hopefully with all these problems that are coming up that will find a way to get through it, because the United States and Canada have always been on the same team. And I just see this the same way going ahead. But we're going to have a few more issues now. When the Greenland problem was a problem for us, too, because we're 27km away from Greenland in the northern part of Canada. And, you know, we've got a lot of Canadian Arctic in the archipelago. And so we weren't part of that conversation two weeks ago. You never heard Canada once, but here you did, because we were wondering how we're going to be on the menu or at the table with that. And this is all ongoing and it will probably continue. And it and it does affect me as a Canadian farmer going across the border all the time. And it affects the traders on the American side, maybe even more so because they're the ones paying the tariffs and they're the one dealing with this. So but keep in mind that American presidents all throughout your history have been tough negotiators, and they have to stand up for their own country. And they've always stood they've always negotiated, really tough with Canada. And that's fine. I suppose we've tried to do the same thing, but, you know, I'm still hoping we'll find a good way through this.

[Yeager] I can't decide if I want to use a sports analogy to set up this question, but we'll just start. It's approaching the trading deadline for your favorite sport.

[Shaw]  That's right.

[Yeager]  And right now it appears that there are a lot of teams looking to change partners or players. You've got India and China having conversations, or you have European countries working directly with South America. I mean, we have these trading partners that are changing. Is, do you know, I mean, of course, you're not in the Parliament there or in the halls listening to or hearing what the discussions are, but do you see a day when the Canada and United States trade relations are where we're not the top trading partners with each other because we've gone elsewhere?

[Shaw]  No, I don't see that. And yeah, you know it. It's true that when your biggest trading partner is telling you, you don't. We don't need your cards. We don't need your steel, we don't need your aluminum. We don't need your lumber. We don't need anything. Well, if you're us, you have to kind of take the person at its word from time to time. And so you better start trading with other people. But there's no way. I mean, we might diversify to some extent, but we share the largest undefended border in the world. We're very culturally similar. We have a third of our farmers are French speaking, or a quarter of our farmers are French speaking. So maybe there are some cultural differences, but because of the proximity with each other, I never see the day where that changes. You know, like, for instance, take Mexico, for example, Mexico and the United States. I mean, your trade relationship is huge. Just think about the amount of corn that you ship at, Mexico. And just I mean, you've had quite a discussion. I love when Ross Baldwin's on because he talks about beef. Right. And my gosh, talk about bright and talk about a good discussion. And I'm just soaking it all up. But you're talking about the screw worm problem in Mexico, right. And you're talking about this and that. But the bottom line is, I mean, Mexico and the United States are probably going to continue to be huge traders. And, it's the same for Canada. In the United States. We're probably going to be huge traders. But still their problems come up like lately. Like I can tell you, I talked to some of my Brazilian friends that say that, you know, everybody wants to trade, but they don't want to trade with the United States, you know, simply because of the rhetoric that comes out sometimes. And so they're looking for other venues. You take, for instance, corn into Mexico. Well, that would be challenged at times by northern ports from Brazil shipping corn into Mexico. Maybe. Maybe not, because you've got such good advantages. So and those good advantages have to do with geography and culture and politics changes. You know that. And I don't I don't know, I'm not an authority on American politics. I don't understand how your Congress works with your executive branch there.

[Yeager]  I think sometimes.

[Shaw]  Well, sometimes I wonder. But the bottom line is the bottom line is, is politics even changes. Sometimes we have geographic proximity. We have a justice system that works. So I never see the day where. No, we're not our biggest trading partner. So maybe Mexico might get through that. And China on some sectors might get through that depending on what happens world. But I never see the reason that will happen. I don't see the reason why it needs to. Because from a Canadian perspective you're going, why don't why does this have to happen? You know, why does this happen? But it is. And maybe it's a negotiating strategy. Maybe it is. I don't.

[Yeager] Know. Well, that's what we hear is that it's a strategy and the end goal is somewhere down the road. But there's a sentiment by those who think, well, if we can do it in country, we don't need it from somebody else. But you've mentioned the products that we can't always do in the United States. But if there is improvements in how someone, whether it is in grain or, in the cattle because you think out in Montana, the stuff that goes across the border or in Washington, you know, that gets fed or finished or processed, we can get into labels. The same with Mexico. You mentioned there's the thought is, from what I hear, the president says, well, we can do that in the United States. We don't need Canada or Mexico or China to do it.

[Shaw]  Yeah.

[Yeager] And that's been the that has been the commonality of what and why we hear it, I and I, I use an anecdote every once in a while from someone that I know that whose job changed because the original NAFTA took his job and shipped it to Mexico, and he's never liked trade since.

[Shaw]  And he's. Yeah. And there's that sentiment reassuring. Yep. There's that sentiment for sure. As you know, I've been a long time writer in the United States from Canada. And I get I get really quite the letters from the people even in, even in places like Montana and North Dakota, places like that. But as you know, sometimes, a calf is raised in Montana and it's shipped to Alberta to be fed, and then it shipped back to North Dakota to be fed some more. And then it's shipped maybe to Manitoba to to ship some more and then maybe shipped to Ontario and finally finished off. And then maybe it's shipped to United States to get slaughtered. And then beef is back into can we have a very complicated, integrated supply chain between Canada and the United States. And so when you throw tariffs into the mix, they're not only that. The threat of tariffs, it slows things down. You know, and and you know I'm not here to comment on American politics because I have I, I don't have citizenship. My comments are coming from, you know, the receiving end of, a lot of this and the perceptions that I may have.

[Yeager] I see, because of you, I followed more Canadian farmers online, and I see some of their comments, and they were long critical of Justin Trudeau. They're critical of Carney for various reasons, like people are critical of the president here. That debate is we always think healthy in the United States. Do you view that debate, healthy in Canada, internally, in your own country. And that what you hear is in English? 

[Yeager] Okay, I never thought of it that way.

[Shaw]   And what I find is, this narrative from Western Canada is it is what it is, but it's it's, very critical. You never hear the French, even though you have French speaking, viewers of market to market. Because I've told my Quebec writers because I write in French writing, my work goes to come back and is translated into French. And, our French Canadian farmers have a different attitude than that. And they're québecers first, and but they would have a different attitude than that. And part of the problem is because we speak different languages, it's not often brought up and come to the fore. But, you know, lots of my American friends criticize their own government, whether it's Democratic or whether it's Republican or state governments or whatever. It there's local governments and it's similar here. It's similar here. However, I would say there's a big difference. And you're elected. Senate means you're elected. Senate means that the farm constituency or the farm vote is much more important than it is here in Canada, because we have an elected parliament. So the farm vote is diluted. While you have two senators from Wyoming, you have two senators from Montana, two from Kansas, two from Rhode Island, two from California. So the power of the farm vote is much stronger in the United States. And so, I mean, I'm sure American farmers still criticize politicians, but typically, you have a better farm voice in the United States. And I believe I've always written it's partly because of the elected Senate with the regional representation, you have the for instance, I give you example, Bob Dole, he was a senator from Kansas for many, many, many years. A big wheat state. And so we producers were well represented with him because he was one of two senators. And in Canada we don't have anything like that. So for instance, one policy that's on right now in the United States is the bridge payments. And President Trump has proposed. And I'll let you tell me when that's going to be distributed. But the point of it is you have a very strong farm lobby based on your political system in Canada. We're not getting anything like that. And we will not get anything like that simply partly because partly because, of the political system that we have. But yeah, politics is a kind of a blood sport, probably on both sides of the border on different levels, I suppose.

[Yeager]  Well, one of those issues that I think, well, Dole, is the father of the modern Farm bill, which we haven't had a new one, in now going on six years, and it doesn't look like it's going to happen yet this year, although there is talk of a skinny bill, whatever that means. I don't know. But there's still always feel this conversation of, well, if the US could compete in the dairy industry and that always seems to be a nonstarter, with, with Canada and the US and it and everything just kind of then goes sideways. Is that really the only nonstarter that the two countries have? Agriculture base that they don't want to engage in or that there's going to be any change in?

[Shaw]  That's definitely a big one. And, the conversation here in Canada that matters is in French. Okay? Because Quebec dominates our dairy industry. Why? Because over a period of years, they built it up and they've got the within our system. And the Quebec province threatened our federal government through the years to secede from Canada. And there's been two separate referendums in Canadian history. And not only that, any Canadian opposition party to change, because you might have heard a lot of derision with regard to supply management from Canadians from Western Canada. But there's not one federal politician. What would stand up and be against it, in this country because of how strong it is now, I do think the differences with regard to are with our American friends regarding dairy are technical. They're somewhat technical. It really doesn't have a lot to do with production, because shipping your milk and dairy products into Canada is really not going to do you much good. I listened to Naomi Blohm you have on, and one thing you always asked Naomi about is dairy prices. But I listened to that. I always think, you know, it's so interesting. Listen, now we talk about dairy futures and milk futures and stuff like that because we don't have anything like that, right? I mean, we've, we've we dairy producers are profitable, you know. And it's because of what we have now, our American friends, Mr. Trump mentions a lot of times talk about more access in Canada. And that will probably be one of the hard sticking points that we have as we go ahead with what you call USMCA, but what we call CUSMA, this coming year. However, I do think that the problems that that between the two sides have much more to do with definitions and technical issues than it does with anything that our American friends want to put big dairy production in here, because we're not that big of a country, you know. And I was in a dairy farm in Indiana a few years ago, and I think they had 30,000 cows. Right? I went through the barn in a bus. Right. We have nothing like that here. So you know, yes. That’s going to be a sticking point. And I told you the cultural and the political realities of that. So it makes it very difficult. And plus there might be a Quebec referendum coming up on separation, either this year or next year, because the separatist party in Quebec is leading in the polls now. So, that's a Canadian problem that I don't think our American friends are that interested in. And, well, that's fine.

[Yeager]  Given what you just said, though, is we should be. And to understand your we know where our criticisms come in this country, to understand our friends and what some of their struggles are, helps us better, I think be better friends because there was an issue and maybe concede something here to get something over here. One of the things you wrote about recently for DTN that caught my eye was one word, and that's nostalgia. What? Why did you use that word and what were you exactly referring to?

[Shaw]  So that was in my latest column for DTN. And is specific to what Prime Minister Carney said in Davos. And he said nostalgia is not a strategy, and it might be nice for Canadians to think that we've always been friends with Americans. We've always had this huge free trade area across North America. It's always been the way it's been.  We've gone back and forth in between Detroit and Windsor to watch hockey games forever. Detroit Tigers, everything, Detroit Lions, everything. You know. But, you know, those times are over, unfortunately. And so the new horizon I'm hoping is good, but it just won't be based on that. It'll be based on something new. For instance, our Prime Minister just recently solved the problem with canola, with China. As I'm sure you know, the Chinese banned imports of Canadian meal and canola seed after we put 100% tariffs on with the Biden administration on Chinese electric vehicles. Obviously, that caused all kinds of problems in Western Canada. Well, I was just I was just taken away recently, right. And, the prime minister got the Chinese to take that away. And now we're getting 49,000 EVs imported from China into Canada. So that's something new. But nostalgia says that we can all just get along and everything will just be fine. But that's not where we're at now. And I related it to prices in that column. And I said, I can't remember what the prices I quoted because, the March corn and different nearby months, I just don't know exactly what they are right now. It's always a problem when I ask a question to DTN, because you have to anticipate what's going to happen Friday for your question to be relevant. But what I related to is the low prices we have now seem somewhat nostalgic, meaning that we'd like a lot higher prices based on our cost of production and things like that. So that's why I mentioned that.

[Yeager] Well, and I think that's a little bit tied to the last thing I kind of want to get to is, and I guess ask the relevance and if it's a sentiment that's shared by your neighbors. We hear all the time, we just want farmers just say they just want a market. They don't want that bridge payment if they don't have to. They just want the chance to compete. Is that a nostalgic thought that that is that is done existing? Because if you've got countries mad at each other or leaders mad at each other, that doesn't sound like there's going to be any fair market trade any time soon.

[Shaw] I would agree with that. And that's the way we feel here. I don't ascribe to what you just said with regard all farmers want to do is market. Well, maybe that's what they want to do. You know, I have you know, I have a background in agricultural economics, and there's always a problem with overabundance in any agricultural economy. So I actually think the hybrid model, some type of hybrid model is better. I actually am a strong supporter of Canadian supply management of dairy, poultry, and things. And I never used to be I used to think it was a crazy idea, but everybody was going broke, right. And, I wish there was a way to get profit to the farmer, whether he's in Illinois, Indiana or Ontario, in a different way, because, you know, it's pretty tough now with the prices we got every week. You ask different analysts about these prices, and we're all hoping they get better. But a lot of times the analysts say, well, you got to know your cost, your production. You got to do this because it's it's pretty tough pretty tough. So I wish there was some type of a different way than farmers just want a market. Because, you know, I talk about big supply a lot when I write for DTN because we got big supply. Like one of your first questions every week is about let's talk about wheat. Well, the answer about wheat is it's growing everywhere. Every month of the year or it's harvested every month, a year somewhere. So there's always gaps that fill the supply. And it's true that the American wheat in Kansas has a place and you have a huge domestic market, so you use it a lot. But otherwise as soon as you export wheat, you're competing from wheat from Ukraine, from Argentina, from who knows where else. I went to a meeting last year and somebody was complaining about Pakistan, one soybeans and they were cut off from their supplier and they got them from Africa. And I thought, my gosh, what do you mean, from Africa? And I asked the buyer and he said, well, they do produce soybeans in Africa. Not very many. But if you want soybeans, they would ship them. The quality's pretty bad. But you know, so there's supply everywhere. Our agricultural economic model makes it so we all face a perfectly elastic demand curve. That means we go out every spring. And I'm just like anybody else in Illinois, Indiana, Michigan. I'm going to try to produce as much as we can. And look what happened. The American farmers produced 17.02 million bushels of corn last year. The Brazilian farmers produced 177 million metric tons of soybeans this year. Is it too hard to imagine that the Brazilians will be producing 200 million metric tons in a few years? Most likely, and the American farmer hitting 20 billion bushels of corn. So. So, you know, this is a reality. We're in big supply is winning. It's helped on by technology and genetics and the sweat of the American farmer and the sweat of the Canadian farmer. But here we are.

[Yeager]  Well, it's funny you said what you just did. Ross Baldwin last week said, well, you know, the farmers still thinks they can over produce their way out of the problem. They can produce their way out of the problem. That's the sentiment. That's not new. But I do want to go back to what you just said about South America and Brazil. We're getting close. If we're not there already, that the soybean market, looks a lot like the wheat market. Like you just said, it's produced and gaps get filled. That didn't used to the gaps used to exist, therefore adding some premium. That's much harder for the soybean farmer to work through now as they try to stay profitable.

[Shaw]  That is so true.

[Yeager] And there's no question there. Phil, sorry I'm not giving you an out, but.

[Shaw]  Well, no. Like for instance, I can remember when Brazil was irrelevant. Right? And every year they got more and I've got lots of Brazilian friends, some who I've met with here in Canada who have come to, they didn't come to see me, but they were here and they asked me to get together. And I got together with some great merchandizers. But yes, it does make the farmers job a little bit more difficult. I talk about a weather market. You know, typically here, a former analyst. It was on your show. Elaine Kub, she always used to write a column. The June 18th is the time to sell corn. And that was always based on. She wrote the book Mastering the Grain Markets and, you know, and she said, you know, and we all know that, you know, June is kind of seasonality with corn. That's when you such it's no new crop corn. Well, now there's more than one weather market right. There's a weather market right now in South America. Right. We've been watching for some drought weather hiccup all of December. And January hasn't really come. It just you know so here we are right. And then now one of the next ones will be here in the United States and Canada. Well, especially in the United States when when folks go out to, field and blow the dust off the corn platter and go plant corn and try to do even better the next year. And if we have a hiccup in that time, like we did in 2012, while that's a weather market. So yes, yes. This is making it more complex for the American and Canadian farmer to market grain in Canada. We have the extra layer of the foreign exchange with Canadian dollar that we have to balance. Americans do too, but they don't think of it that way. They just think of dollars. But the American dollar dropping actually helps you guys on wheat futures you know. But it is what it is. So it's a complex thing. You know I write about marketing all the time here because I read for the Grain Farmers Ontario and I write for publications and, and I never know exactly. I just lay out the market factors that are involved and people can make their own decisions.

[Yeager] So, Phil, if you had a magic column to write, that would get us through the next 2 to 4 years for either country. What would be some key points of that? And I'm not saying get through because there's some that think that this is just fine, but, well, things change. And I'm not saying it's a rubber band that's going to snap back. It's more of a gradual up and down. This policy of this administration will change to this policy. What's that column? What's some of the content of that column going to look like if you write that?

[Shaw]  Well, on the American side, an American reader once told me that because I don't have citizenship, I don't really have a right to an opinion on American politics. And I agreed with them. I thought, okay, that's a little tough, but that's true. So I really won't offer an opinion on American politics other than the fact that from an American perspective or from a Canadian perspective, in my view, the American government always takes care of the American farmer does, whether it's Democratic or Republican. Typically, the American government typically, compared to us especially, takes care of the American farmer. And I think that will continue regardless of political stripe, whether it's Republican or Democrat. And true, my American friends will probably complain and worry about their politicians. That's fine. But I think they'll take care of their, the American farmer, the American government. Well, in Canada, I think it's much more tenuous. I kind of laid that out in my latest column. We don't have the safety nets and no bridge payments coming here. We don't have that at all. So we're looking more. In my view, you haven't cut your fixed costs. So what are fixed costs? Well, those are land costs. Machinery costs. You're going to have to find a different way, especially if you grow what we call a non supply managed sector, which means grain and cattle and hogs. You're going to have to find a different way. Cut your costs, be better marketers with regard to the supply manage sector, which is milk and poultry. I hope it can it continues and certainly under threat from, from our traders, our Quebec farmers, that don't speak English. And when I go to Quebec, I speak in Quebec and it's translator and I sit down on a lunch with people that don't speak English. We manage to understand each other, but there's strong, Quebec first people that, believe in supply management. And I would like to see it sustained. But that debate. That might be something that might be a little tougher to do, but I think it'd be sustained. I don't see any reason for them to start selling milk like I sell corn. To me, that would be a huge step backwards. So, you know, it's a we're at a tough point now, but, you know, time is a time is a funny thing. And, but I see our American friends, and Canadian friends, we will get along as we go into the future. And, you know, maybe the political rhetoric is a little bit hot from time to time, but we have no reason but not to get together, not to be together and to get along. And, that's what I'm hoping for as we move ahead.

[Yeager]  Phil, I always appreciate the questions, the insight and the feedback. Keep bringing the feedback to me. I always like to hear from you.

[Shaw]   Well, thank you very much. And I appreciate tuning into your program every week. And I also listen to your podcast, usually in a tractor, finding incredibly, incredibly interesting. And, I know, I know some of the people that are on the podcast, like, for instance, Arlen Superman, he came to Dresden, where I'm from last year, to speak. So I went up and introduced myself, and he knew of me because I'm on Twitter right now, and we talked about a lion cub and others, Darren Newsome through the years and other people that I ran into. But sometimes I just want you to know the Phil from Ontario. All right, a question, but sometimes I have to anticipate how the market action is going to be for two days. And sometimes it's hard to make the question remain relevant.

[Yeager] Right. And, and I get that. And that's a big ask. And, you know, we know that, that can happen. Things change. Heck, things change. I and I in fact write about it a lot in the newsletter and say from Friday afternoon when we walked out of the studio, something changed. Or Ted will pull out his phone and go, well, what I just said is no longer valid, you know? Now, as Virgil Robinson always used to say, as we sit here tonight, Mark, this is the story.

[Shaw]  Yeah. That's right, I met Virgil. He came here to speak.

[Yeager] Yeah. All right. Phil, great to see you. Great to hear from you. Thank you so much.

[Shaw]  Certainly. Pleasure. Thank you.

[Yeager]  New episodes come out each and every Tuesday. The audio formats, wherever you get your podcasts. The video mostly comes on our website of market to market.org, as well as our YouTube channel. The production supervisor for Iowa PBS is Sean Ingrassia. His crew, which always helps us out is Reid Denker, Kevin Rivers, Neil Kyer, Julie Knutson, and David Feingold, the executive producer of Market to Market is David Miller. I'm Paul Yeager, thanks for watching. We'll see you next time.