Winnipeg Free Press

Winnipeg Free Press (Newspaper) - February 1, 2025, Winnipeg, Manitoba A4 ● WINNIPEGFREEPRESS.COM T HE crops have been harvested, the soil tilled. The fields are blanketed in snow. Normally, this is a farmer’s quiet season. But this year, on either side of the Canada-U.S. border, there’s a chill of unpredictability hang- ing in the winter air. “My stomach starts to turn just a little bit,” Minnesota farmer Harmon Wilts said in a late January interview. “As a farmer, we can control the things we can control… but when it comes to something like tariffs — that is totally out of our control and very frustrating.” Since November, U.S. President Donald Trump has threatened to impose broad 25 per cent tar- iffs on Canadian goods. He’s repeatedly claimed his country has no need for Canada’s exports — cars, lumber, oil and food products in particular — because America makes “the same products on the other side of the border.” Canadian leaders have promised retaliatory measures ranging from export taxes on major commodities such as energy to dollar-for-dollar tariffs meant to squeeze vulnerable sectors of the American economy. Prime Minister Justin Trudeau maintains “nothing is off the table.” Experts predict the ripple effects of a trade war could be crushing for both economies. Canadian and American farmers, who have long relied on a steady exchange of crops, equipment, fertilizer and other agricultural goods, are bracing for impact. Wilts, his wife, Gina, and their three daugh- ters tend almost 1,500 acres of corn, soybeans, sugar beets and alfalfa on the family farm near Kerkhoven, about two hours west of Minneapolis. Canada is an important trading partner, both as a customer and as a supplier of crucial inputs such as potassium fertilizer. In the short window before any tariff decisions are formally announced, Wilts is negotiating with suppliers and strategizing with lobby groups to build some resilience for his farm in the tumultu- ous years ahead. “Canada is really important for us and I think we’re important for them on several things too,” he says. It’s a similar story in Elm Creek, Man., some six hours north, where Colin Penner and his brother grow a mix of canola, wheat, soybeans and oats on their family’s 3,500-acre farm. “It does feel more chaotic and uncertain than most years, but it takes a bit of nerve sometimes to be a farmer,” Penner says. “Right now what we’re trying to do is… have a plan. What can we lock in? What can we do to make sure that we’re safe? And where can we gamble a little bit and hope for the best?” ● ● ● WHILE the effects of a Canada-U.S. trade war are likely to hit all economic sectors, Wilts believes farmers are on the front lines. “Business owners, farmers and folks like that are right in it right now — and have been — be- cause it totally directly affects them,” Wilts says. Margins have been tight in farming for many years. Family farms such as the Wilts’ and Pen- ner’s are slowly losing ground to larger corporate operations. Unpredictable costs and commodity prices continue to make farming difficult, and younger generations have been reluctant to stay on the farm. “On the farm business side of things, this is some of the tightest budgeting I’ve ever seen,” says Penner, 39, who is in the process of taking over the farm from his parents. “We’ve seen tremendous years where farmers are making hundreds of dollars an acre, and this year it’s looking like we might be losing $10 to $20 an acre. It does make it a little more compli- cated to farm.” Tariffs would add another layer of complexity given Canada and the United States are among each other’s largest agricultural trade partners. More than US$70 billion worth of agricultural goods crossed the border in 2023, with the U.S. buying more half of Canada’s exports and supply- ing more than half of its imports. Manitoba’s agricultural industry, one of the province’s most important sectors, sent more than $4.5 billion in agriculture and food exports stateside in 2023 — almost half of all its agri-food exports. In recent years, agricultural sales to the U.S. have grown faster than other export sectors. “Canada-U.S. relations on any farm is huge,” Penner says. His farm sells oats and soybeans to brokers who then sell to American customers. In recent months, he’s checked in more than once to make sure they can honour their contracts, asking: “‘Can you still find a home for some of these grains?’” Canola is even more uncertain. Penner sells to a local crusher, which in turn exports to the U.S. Canola products are Manitoba’s largest American export, and experts predict it will bear the brunt of tariffs. Penner says the commodity is also vulnerable to political instabilities at home — a federal election is looming and a new government could indirectly impact how much is produced and used in Canada — and canola producers have been left to watch and wait before the impacts are fully understood. “That’s why we grow a quarter of the farm to wheat, canola, oats and soybeans, to manage that risk,” Penner says. “(We’re) not throwing all our eggs in one basket.” Meanwhile, in the U.S., it’s precisely the crops Wilts grows — corn and soybeans — that stand to be most affected by a trade war. They’re the country’s biggest farm export, together account- ing for a quarter of all agricultural exports. For more than two dozen states, including Minnesota, Canada is a farmer’s largest market. “I want to have our best trading partners to the north have a good relationship and it’s hard to do that when you have tariffs,” Wilts says. For corn and soybean farmers, talk about tariffs is a sour dose of deja vu. Midway through his first term, Trump imposed tariffs on a raft of goods from China, Canada, Mexico and other nations. The retaliation — particularly from Chi- na, which imposed its own 25 per cent tariff on American soybeans — cost farmers billions. “Our soybeans went from about $10 a bushel to about $7 a bushel — and that does not work in this economy,” Wilts says. “That will put a lot of farmers out of business within a year or two.” Wilts is involved in the political side of farming — part of advocacy groups such as the Minnesota Farmers Union, the National Farm Bureau and the National Corn Growers association — and supports lobbying efforts to convince American lawmakers that tariffs aren’t good for agricultur- al business. He’s planning a trip to Washington, D.C. in the spring with the American Coalition for Ethanol, where he is a board member, to advo- cate for measures that keep farms profitable. “We’re about at a break-even right now with prices — at best,” Wilts says. “I think the biggest thing has been to show legislators exactly what will happen if this happens. We can’t afford to lose any more farmers than we are now. We need to find a way to bring the next generation in.” ● ● ● IT’S not just the exchange of food that Ameri- can farmers are worried about. As threats of a cross-border trade war gain traction, Canadian politicians have publicly mulled the possibility of an export tax on commodities Americans may struggle to find elsewhere. Energy prod- ucts and critical minerals such as uranium and potash top those lists. Potash, in particular, is among Canada’s most significant exports. A catch-all term for minerals rich in potassium, potash is one of three key ingredients in fertil- izer, making it vital to food production. Canada lists potash as a critical mineral; American lawmakers have lobbied to see it designated in the States, too. About a third of the global potash supply comes from 11 mines in southern Saskatchewan, where the remnants of an ancient inland ocean form the largest potassium deposit in the world. Canada exports nearly 20 million tonnes of the rose-co- loured rock each year, mostly to American farmers. “Potash is very important to our operation,” Wilts says. “A very good chunk of it does come from our trading partners in Canada.” Fertilizer is already in the ground for the 2025 growing season, but next year and beyond are full of unknowns. If tariffs or export taxes drive up the cost of fertilizer, Wilts will either need to cut back on potassium inputs, which could be bad for yield, or strike a deal with suppliers to lock in a price before tariffs are announced. In late January, he says, those conversations are already underway. “I’ve got about 25 different people that help me with things: my seed supplier, my fertilizer supplier. I want to have a good relationship with them,” he says. Manitoba’s lone potash producer shares the sentiment. The Prairie Evaporite Formation — that ancient, potassium-rich ocean bed — stretches about 25 kilometres into western Manitoba, where Daymon Guillas has spent the better part of two decades trying to get his home province into the potash game. As of 2023, the Potash and Agri Development Corp. of Manitoba successfully made its way onto the market. It expects to extract a modest 250,000 tonnes annually once it scales up its Har- rowby-area mine, just west of Russell near the Saskatchewan border. Though the mine is still in its infancy, Guillas says he isn’t worried about the effect of tariffs on business. The company has secured custom- ers across North America, including many in the United States. Because potash is critical to America’s food security, relationships between Canadian miners and American farmers will outlast any political administration, Guillas says, and he’s not interested in jeopardizing those ties. The company is prepared to take an economic hit, if needed, to keep supplying its U.S. customers. “Our business model is always long-term, sustainable relationships: you share the pain in bad times and you share the gains in good times,” he says. “We’re going to protect our long-term relation- ships with our U.S. neighbours forever.” ● ● ● IN Manitoba, the price of fuel, farm equipment and phosphate — another fertilizer ingredi- ent — could be affected by tariffs, too. Penner secured a long-term supply of fertilizer and fuel while there was still “certainty in the market.” It’s part of his efforts to future-proof the farm, though he acknowledges there’s only so much he can prepare for in advance. “It’s kind of like playing cards. You should never hope you’re going to get the next card, you should look at the cards you’ve got and say: ‘This is what I’ve got now, I’ve got to make the best de- cision with what I know right now,’” Penner says. In the winter, Penner teaches a farm man- agement class at the University of Manitoba, where he recently dedicated a week to discussing current geopolitical issues such as tariffs and the upcoming federal election. “Your head can spin around trying to navigate these things,” he says. But his students are opti- mistic — a trait he believes helps farmers keep their heads above water. “There’s times when it absolutely is dark out there,” Penner says. “If we can look at things positively then hopefully, we can grow into that and have positive things happen to us.” Wilts is optimistic, too. Strong cross-border relationships, he believes, can help not only in the present moment, but in the long-term future of both countries’ agricultural sectors. “I think the ideal outcome is a better rela- tionship than we even have now with our very important trading partners in Canada,” he says. “A win-lose doesn’t work. So the hope would be that we could come together and find a way to have a win-win situation going forward.” julia-simone.rutgers@freepress.mb.ca Julia-Simone Rutgers is a reporter who covers environmental issues in Manitoba. Her position is part of a partnership between The Narwhal and the Winnipeg Free Press. JULIA-SIMONE RUTGERS NEWS I FRONT AND CENTRE SATURDAY, FEBRUARY 1, 2025 MIKE DEAL / FREE PRESS Elm Creek farmer Colin Penner, who gets help from eight-year-old son, Everett, sells oats, soybeans and canola that end up in the hands of American customers. Producers on both sides of the border share common ground in face of trade threats TARIFF TREMORS ripple across the family farm MIKAELA MACKENZIE / FREE PRESS Daymon Guillas, Potash and Agri Development Corp. of Manitoba president, says he isn’t worried about tariffs. SUPPLIED ‘Canada is important to us’: Minn. farmer Harmon Wilts ‘It does feel more chaotic and uncertain than most years, but it takes a bit of nerve sometimes to be a farmer. Right now what we’re trying to do is… have a plan. What can we lock in? What can we do to make sure that we’re safe? And where can we gamble a little bit and hope for the best?” — Manitoba farmer Collin Penner ;