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This article was published 15/5/2019 (383 days ago), so information in it may no longer be current.
As Westman farmers get this year’s crops in the ground, worries abound about how much their harvests will be worth when it comes time to bring them to market.
The value of commodities continues to plunge as China gives Canada a cold shoulder in the wake of Huawei executive Meng Wanzhou’s deportation hearings.
The price per metric ton of canola has dipped three dollars this week as China continues to block Canadian canola exports.
Bruce Dalgarno of Pen-Dale Farms in Newdale told The Sun that his 2018 canola crops have been sold, but a big question mark hangs over whether he’ll be able to sell his 2019 harvest.
Dalgarno said that the federal government’s increase to the amount of money canola farmers can borrow against the expected value of their crops is unlikely to help farms like his. The amount of money farmers can borrow is based on how much canola farmers can grow. Last year, Dalgarno grew 4,000 acres of canola and wasn’t eligible for the previous loan limit of $400,000.
"Unless you’re a 10,000-, 20,000-, 30,000-acre farm, then it won’t do you any good at all," said Dalgarno.
Mitch Janssens, a farmer in Boissevain and vice-president of Keystone Agricultural Producers, said that he hasn’t changed how much canola he’s growing this year.
"We’re keeping things the same because there’s not much else we can grow on the Prairies," he said. "Quite honestly, I didn’t know what else to grow."
Federal Agriculture Minister Marie-Claude Bibeau briefly met with her Chinese counterpart on Monday, where she expressed Canada’s concern with the suspension of canola exports to China over claims they are contaminated.
Both were attending the G20 Agriculture Ministers’ Meeting in Japan on Monday.
A news release from the agriculture ministry says the two officials had "an introductory conversation on the margins of the G20," where Bibeau urged that the issue needs to be resolved quickly.
The release says Bibeau expressed that the Canadian government "stands firmly behind its robust inspection system and good reputation of being a reliable supplier of quality products worldwide."
Prime Minister Justin Trudeau also said last week that the decision by Beijing to ban Canadian canola is linked to the trade war between China and the U.S.
Trudeau said Canadian canola is "unimpeachable in terms of its quality" and China is using concerns over it "as an excuse to prolong what is fundamentally a conflict, not even with Canada, but between the two largest economies in the world."
Two pork exporters in Quebec have also had their products blocked by China. Soybean exporters have also faced issues getting their products to market in China, and the price of soybean futures recently hit a 10-year low before recovering somewhat. The price of wheat has dropped from 460 cents per bushel to 439 cents per bushel in the last month.
"These types of issues don’t resolve themselves quickly," said David Derwin, a commodities/equities investment adviser specializing in agriculture for investment firm PI Financial. Derwin told The Sun that agricultural-related business and businesses that sell to farmers could be the next affected.
"No one’s going to be all that keen on spending half-a-million on a combine or upgrading equipment when prices are weak and there’s a lot of trade uncertainty."
Derwin said that for his own clients, he hedged at the higher February canola prices to mitigate risks.
"This year in particular I think it’s been useful to have some knowledge and awareness and actually use options and futures to manage their commodity risk."
Dalgarno doesn’t think that more government programs will be able to help farmers.
"They gotta get this China thing solved and get the price of canola back where it should be."
Brandon-Souris Conservative MP Larry Maguire said that the federal government should take more action in the dispute.
"To show the sincerity of the situation, give it the presence it need, we should have an ambassador in place."
Canadian Ambassador to China John McCallum was asked to resign in January after he made public comments about Meng Wanzhow’s case.
Maguire said that he also believes that Canada should withdraw $256 million it has invested in the Asian Infrastructure Investment Bank in response to Chinese actions.
"I believe that the government needs to be taking stronger measures in regards to where they’re at with this."
» firstname.lastname@example.org, with files from The Canadian Press
» Twitter: @ColinSlark
NOTE: This article was updated on May 16 to reflect the correct spelling of Meng Wanzhou's name.