AGRIWEEK: Key Insights from November 29, 2024 Edition | (AGRIWEEK – November 29, 2024)

 

Canada’s plan for U.S. trade talks: throw Mexico under the bus

The Wall Street Journal reports that Canadian leaders are signalling that they are willing to throw Mexico aside in a bid to curry favour with the incoming Trump administration as they prepare for tough trade talks.

With a scheduled review of the U.S.-Mexico-Canada Agreement beginning next year, Canadian leaders, including Prime Minister Justin Trudeau and his finance minister, have said they are ready to make a new deal with President-elect Donald Trump alone, cutting Mexico out.

Canadian leaders say they are worried that Mexico has become a backdoor to the North American free-trade zone for Chinese products, much of which would otherwise face steep tariffs in both Canada and the U.S. Trudeau said he raised these concerns with Mexican President Claudia Sheinbaum on the sidelines of the G-20 summit in Brazil.

Mexican trade officials say there is no evidence China is using Mexico as a backdoor to export goods to the U.S. and Canada tariff-free. U.S. and Mexican customs authorities co-ordinate trade inspections, and both countries impose hefty sanctions on companies breaching import rules.

The U.S. conducted $1.6 trillion in trade within the USMCA in 2023, according to U.S. government data. Mexico is the U.S.’s largest trading partner, with Canada a close second.

Luis Rosendo Gutiérrez, Mexico’s deputy trade minister, said at a news conference on Nov. 26 that China’s foreign direct investment is significantly higher in the U.S. and Canada than in Mexico. Gutiérrez said 68 per cent of China’s investments in North America go to the U.S., more than 31 per cent to Canada and just 0.4 per cent to Mexico.

“Check your data, there it is. What are you talking about?” he said of the backdoor fears.

Trudeau’s finance minister, Chrystia Freeland, said she shared the “grave concerns” harboured by the Biden administration and advisors to Trump about Chinese investment in Mexico.

“We are perfectly aligned with the U.S., and that means we are not a backdoor to Chinese unfair-traded goods. The same cannot be said of Mexico,” she said earlier this week.

Mexico is Canada’s third-largest trading partner, and its growing market is important for Canadian businesses, said John Weekes, a former Canadian trade official who was a chief negotiator on the North American Free Trade Agreement.

Canada has already taken steps to align itself with U.S. policies aimed at China. Trudeau’s government in August matched the Biden’s administration’s 100 per cent tariff on Chinese-made electric vehicles and a 25 per cent surtax on Chinese steel and aluminum products.

Mexico wants to establish a North American import substitution framework for Chinese products and components, as U.S. manufacturers in Mexico are heavy importers of Chinese goods, including American car companies that ship vehicles made at its Chinese plants to sell in Mexico’s domestic markets.

Mexican officials say they want a new framework on China when consultations for the 2026 USMCA review begin next year. “I think we’re going to have to talk to President Trump about USMCA in February,” Economy Minister Marcelo Ebrard said Nov. 28. “Knowing him, you better hurry up, right?”

The Canadian government and several provincial premiers have apparently decided that throwing Mexico under the bus is a winning strategy for the upcoming negotiations. This is a concern as Canada will need Mexico’s help in fending off attacks by the U.S. to the existing trade structure. One of Trump’s strategies is to divide and conquer, which has already been accomplished by Canada’s actions and statements this week. My major concern is that Canada’s reputation of being a reliable partner has also suffered from the recent statements from our government. Other countries will likely question Canadian resolve when the going gets tough in international negotiations. In the new world trading order, Canada needs as many allies as it can get!

 

CN optimistic despite potential strike risk

A CN Railway executive says there’s lots of track left ahead before it comes down to a labour disruption, according to reporting from the Western Producer.

The organization has been dealing with multiple workforce disputes over the past year, and another is impending.

November 25 CN clerks and mechanics approved a strike mandate. According to their union, Unifor, the two groups voted 97 and 96 per cent in favour of job action, respectively. They are calling for improved compensation, job security and working conditions.

This would affect around 2,500 workers.

At Canadian Western Agribition’s Grain Expo, Sandra Ellis, CN’s vice-president for bulk, spoke briefly about the vote for job action, saying CN is actively in negotiations.

“We continue to be at the table. Both parties have agreed that we’re going to negotiate, and we have dates booked, we’re at the table this week already,” Ellis said.

Despite the overwhelming majority of workers voting in favour of job action, Ellis said she is optimistic that they can come to an agreement.

“We are hopeful and are working on it together to come to an agreement,” she said.

This follows CN’s challenging contract talks and the labour stoppage with railroad workers earlier this year. The Teamsters Canada Rail Conference union contract expired at the end of 2023, which put them into negotiations. By the summer, negotiations and offers had been tabled and binding arbitration had been requested by CN. Before the workers could strike, CN locked out its employees for one day on Aug. 22. While Ellis says that was done to protect the economy, the company faced criticism for it at the time, with the union saying the lockout was antagonizing.

“What this meant was that we could shut down the railroad in a planned way, which put us in the best situation to start up as quickly and as efficiently as possible,” Ellis said at Grain Expo.

The situation ended with the federal government mandating binding arbitration, which is scheduled to take place in 2025.

Now, CN’s Unifor workers could strike by Jan. 1 if no agreement comes to fruition.

Rogers Sugar reports strong results for fourth quarter and for fiscal 2024

Rogers Sugar Inc. has reported fourth quarter of fiscal 2024 results with consolidated adjusted EBITDA of $38.3 million and $141.6 million for the current quarter and the year, respectively.

“We are proud to report a third consecutive year of improved profitability, driven by better results in both our Sugar and Maple segments,” said Mike Walton, President and Chief Executive Officer of Rogers and Lantic Inc. “Our relentless focus on strategy and business execution in has resulted in significant growth in revenue, profitability and free cash flow.”

“We are taking actions to build our business for the future, including expanding our production and logistic capacity in Eastern Canada with our LEAP Project. Although the project is expected to cost more than initially estimated, it remains financially sound and will allow us to meet the expected increase in demand from our customers.” Mr. Walton added. “Looking ahead, we expect another year of strong financial performance in 2025, consistent with the long-term underlying demand growth in the North American sugar market, and the recent recovery in our Maple segment.”

Prairie Watersheds Climate Program posts record year

The Prairie Watersheds Climate Program in Manitoba saw its biggest year yet in 2023-24, according to Dan Cox, project manager with the Manitoba Association of Watersheds.

Cox unveiled the first aggregated numbers Nov. 12 during the Manitoba Forage and Grassland Association’s annual regenerative agriculture conference in Brandon.

In 2022-23, 731 Manitoba farmers received funding for projects like pasture water infrastructure, seeding legumes or cover crops, incorporating urease inhibitors, soil testing and upgrading equipment for precision fertilizer application, among others. Those projects were worth $7.45 million and covered 200,000 hectares.

Between Saskatchewan and Manitoba, those numbers jumped to 1,411 farmers, with projects worth $15.6 million.

In 2023-24, Cox reported that 947 Manitoba producers had accessed funding. That included 734 new applicants, more than the total program intake of the year before.

“Our watershed districts did an incredible job of reaching a bunch of new producers who hadn’t yet accessed the funding … That is incredibly exciting and reassuring,” Cox told conference attendees. The value of those projects also bloomed, with $9.75 million delivered and projects affecting 365,000 hectares in Manitoba alone.

The watersheds association is projecting another jump in 2024-25. It has a goal of reaching more than 1,000 Manitoba producers with projects worth $10.65 million. It hopes those projects will cover more than 250,000 hectares.

Canadian beef cow inventory smaller, fed carcass weights heavier

The Canadian beef cow herd is showing signs of entering the consolidation phase of the cattle cycle, according to a recent report from Canfax. Beef cow inventories were smaller, but there were more beef breeding heifers on July 1. The U.S. cattle herd is estimated to have declined from last year. Feeder imports from Mexico and heavier carcass weights have supported U.S. beef production in 2024. Canadian fed carcass weights have been heavier than last year, supporting domestic production even with smaller slaughter volumes. Beef and veal export volumes are projected to surpass the 2022 high. Seasonality is re-entering the fed and non-fed markets.

The Canadian beef cow herd was in liquidation until May, when moisture conditions improved in the West. The reduction in cow slaughter volumes since then suggests the Canadian beef cow herd is entering the consolidation phase of the cattle cycle. The July 1, 2024 cattle inventory report, released by Statistics Canada, shows the Canadian beef cow herd declined 2.2 per cent from last year to 3.49 million head. Beef breeding heifers were up 0.8 per cent to 586,000 head. Canada’s dairy cow herd was mostly steady with last year at 969,400 head. Dairy replacement heifers were down 1.2 per cent to 405,400 head.

From January to July 2024, beef and veal export volumes were up three per cent from last year and up seven per cent from the five-year average. Canada is projected to export 512,000 tonnes in 2024. If realized, this will be the largest export volume since 2002. Exports were driven by the first quarter, up nine per cent from last year, while second-quarter volumes were down one per cent with the disruption at Guelph in June affecting trade flows. Beef export volumes in July were seven per cent lower than last year. Part of the reduction in beef export volumes in July can be attributed to the increase in live cattle exported into the U.S.

The U.S. continues to be Canada’s largest trading partner accounting for 74.1 per cent of market share. Japan (10.1 per cent), Mexico (6.4 per cent), South Korea (3.1 per cent) and Southeast Asia, including Taiwan (3.1 per cent), round out the top five markets for Canadian beef. These five markets account for over 96 per cent of Canadian beef export volume.

USDA cuts Brazil’s 2024/25 coffee crop by 3.5 million bags

Reuters reports the following are selected highlights from a report issued by the U.S. Department of Agriculture’s Foreign Agricultural Service (FAS) post in Brasilia, which projected Brazil’s 2024/25 coffee crop at 66.4 million bags from a previous official USDA forecast of 69.9 million bags:

“Brazil’s 2024/25 total coffee production is forecast at 66.4 million bags, 0.2 per cent higher than the previous season. This timid growth comes in the aftermath of a strong period of adverse weather conditions in the main producing regions, which led to a decrease in initial estimates for the season.”

“As a result, the country has experienced a decline in robusta production, which was offset by a slight increase in the expected production of arabica, which represents most of the total coffee harvest. Meanwhile, coffee exports in 2024 have hit record highs as Brazil expands its share of the global market, occupying a gap left by other large producers, such as Vietnam and Indonesia.”

U.S. tariffs could alter Canadian pulse movement

Canadian pulse exporters have plenty of experience dealing with shifting trade policies from India, but increased tariffs from closer to home could alter export movement in 2025.

United States President-elect Donald Trump announced he would impose 25 per cent tariffs on all imports from Canada and Mexico when he takes office on Jan. 20. While canola futures fell sharply as a result on Nov. 26, as the U.S. is the largest importer of canola oil, the country is also a major destination for several pulse crops.

Edible bean movement would feel the brunt of U.S. tariffs, as large amounts of Canadian beans are shipped south for canning. The U.S. accounted for about a third of the 408,000 tonnes of edible beans Canada exported in 2023/24, according to government data. The U.S. is also a top destination for Canadian chickpeas, taking 20 per cent of Canada’s total exports in the past crop year

Before the tariff announcement, Agriculture and Agri-Food Canada was forecasting lower average prices for both chickpeas and edible beans in 2024/25 due to increased North American supplies. It remains to be seen what Trump’s proposed tariffs will mean for prices going forward.

Large calibre kabuli chickpeas were trading at around 40 to 45 cents per pound as of Nov. 25, reported Prairie Ag Hotwire. That’s about 10 cents per pound below levels at the same point a year ago.

Nearby pinto bean prices also top out at 45 cents per pound, about 12 cents below levels in November 2023. Black beans, at 57 cents per pound and navy beans as high as 55 cents per pound are on par with year-ago levels.

 

Brazilian farmers to seed more cotton

Cotton is making inroads in Brazil, with farmers reportedly increasing acres of the fibre crop at the expense of corn. Bahai, a major cotton-growing state, is forecast to see a 9.5 per cent increase in cotton plantings this year, while total cotton area in the country is forecast to increase by 7.9 per cent — at 5.31 million acres, reported Safras & Mercado. Increased Chinese demand for cotton was behind the rising cotton plantings.

Canadian canola crush remains on record pace in October

A recent report from Statistics Canada indicated that the October canola crush numbers were at record levels. A total of 1.1 million tonnes of canola was crushed during the month which is an all -time record monthly crush for canola. Crop year to date (August to October) totals are also a record at 2.88 million tonnes which is 159,022 tonnes ahead of last year. Total crush last year (2023-24) was a record 11.0 million tonnes and the current pace indicates that the 2024-25 crop year will reach close to 12.0 million tonnes.

Trump picks lawyer Jamieson Greer as trade representative

U.S. President-elect Donald Trump tapped trade lawyer Jamieson Greer to be the U.S. Trade Representative in his new government. Greer played a key roll during Trump’s last term, serving as chief of staff to former U.S. Trade Representative Robert Lighthizer during the last trade war with China. Greer’s roll will focus on “reining in the country’s massive trade deficit, defending American manufacturing, agriculture, and services, and opening up export markets everywhere,” said Trump in a statement.

Wide ranging effects from Trump tariffs expected

Trump pledged to slap 25 per cent tariffs on all imported goods from Canada and Mexico when he takes office Jan. 20, while also announcing plans to raise tariffs on Chinese imports by another 10 per cent. A wide range of industries will be hit by the trade policies and likely retaliation. For agriculture, the U.S. imported $40.1 billion of Canadian agricultural products in 2023, second only to Mexico. Canada supplies the U.S. with about half of its vegetable oil needs and is the main supplier of potash and lumber. Canadian oil and gas imports are also integral to the U.S. economy.

U.S. bills to rise with tariffs

Ripple effects of the shifting U.S. trade policy could lead to increased prices for U.S. consumers and tightening supplies of some products. About two-thirds of U.S. vegetable imports come from Mexico, Canada ships millions of pigs to the U.S. for fattening each year. “Demand would not fall,” said Alfredo Ramírez, governor of Michoacan, Mexico’s main avocado producing state in a Reuters article. “What would increase are costs and prices. This would bring us an increase in inflation and direct repercussions for consumers.”

Mexico and Canada are particularly intertwined in U.S. auto production and energy output thanks to decades of trade agreements between the North American neighbours. Renegotiation of the trade deal between the three countries is likely. “What happens in the U.S. has a big impact on us, and something like this would clearly have an impact on both economies,” said Bank of Canada Deputy Governor Rhys Mendes on the possible U.S. tariffs.

Junk food companies watching RFK Jr’s anti-sugar, anti-packaged food agenda

During his own failed bid for the presidency, Robert F. Kennedy Jr. vowed to “Make America Healthy Again” and called out additives, sugars and chemicals often present in processed foods. Shares of many packaged food companies fell after Trump picked Kennedy to head up the country’s health department. “As it relates to the incoming administration under RFK’s leadership, we need to assess any policy decisions,” said Smucker CFO Tucker Marshall in a Reuters article. “We continue to monitor and assess what ultimately his agenda and policies will be.”

Canadian wheat milling increased in October.

Canadian wheat milling increased to 290,000 tonnes during October which is tied for the largest October grind in 10 years. Cumulative flour grind has been below the five-year average at 843,000 tonnes for this crop year.

JM Smucker raises annual profit forecast

While the company is watching for upcoming policy shifts, Smucker reported solid quarterly earnings — with rising costs of living said to be leading to more people cooking at home. The company posted net sales of $2.27 billion for the second quarter, compared with analysts’ average estimate of $2.26 billion, according to LSEG data.

Rising Mississippi River levels allow for good soy movement

Heavy Midwestern rains have helped Mississippi River levels recover from near-record lows — allowing increased barge movement along the key transportation corridor at just the right time. Soybean exports from U.S. Gulf facilities are moving at their fastest pace in four years, with exporters scrambling to move as much as they can before the South American harvest or a renewed trade war with China.

Ukraine oilseed exports down in early November

Ukrainian soybean and rapeseed shipments were down in the first half of November compared to the first two weeks of October, reported the Ukrainian grain traders union UGA. Total soybean exports Nov. 1 to 15 at 206,000 tonnes were down from 308,000 in Oct. 1 to 15, while rapeseed exports were halved at 140,000 tonnes. While no explanation was given, other analysts expect Ukraine had already sold most of its exportable surplus, while key importing countries were already well supplied.

Brazilian meatpackers stop supplying Carrefour

Brazilian meatpackers stopped supplying Carrefour Brasil after the CEO of the French parent company vowed to keep South American meat off its shelves. Discussing a trade deal between the European Union and the Mercosur trade block, Carrefour CEO Alexandre Bompard said the deal created the “risk of meat production spilling over into the French market and failing to meet its requirements and standards. While Carrefour currently sources no Brazilian meat for its French stores, the Brazilian unit operates about 1,200 stores.

Warmer/drier European weather aids seeding

Warmer and drier-than-average weather in most of the European Union helped farmers accelerate crop sowing and harvesting over the past month, said the EU’s crop monitoring service MARS. Heavy rainfall had caused delays in France and Germany, with both major producers seeing improvement. However, conditions remained unfavourable in southern Spain and Romania.

U.S. crop report

Winter wheat planting advanced three per cent to 97 per cent complete which near the five-year average of 98 per cent.  Winter wheat emergence is essentially on pace with normal at 89 per cent crop emerged. Winter wheat condition improved by six per cent to 55 per cent good to excellent. This week was effectively the last report of growing season with monthly reports continuing through the winter months.

October grain deliveries rise sharply

Grain deliveries in October were up sharply from October 2023, Statistics Canada reported on Nov. 27.

StatCan issued its monthly producer deliveries of major grains report, with nearly all of the crops significantly higher than the previous October. Deliveries of durum of more than 814,000 tonnes saw the largest increase as they spiked almost 148 per cent.

The total of all grains delivered in October came to 6.43 million tonnes versus 4.55 million the previous October. All wheat deliveries tallied 3.35 million tonnes, up from 2.36 million a year ago. Wheat excluding durum was up 25 per cent at 2.54 million tonnes.

Barley deliveries were just short of 493,000 tonnes and nudged up 1.9 per cent from the previous October. Rye was over 20,500 tonnes in October, up from 15,639 the same time last year.

Among the oilseeds, producer deliveries of canola this October were 2.30 million tonnes, rising nearly 53 per cent. Those for flax were more than 15,500 tonnes versus about 14,200 the previous October.

 

The threat of Trump tariffs on canola oil pushed ICE canola futures down by C$23.70 per tonne. Cash prices for canola closed the week down between C$47.80 to C$49.12 per tonne. Nearby soybean futures increased by 12 cents per bushel during the week, but soybean oil remained under significant pressure. Soybean oil dropped by 0.98 cents per pound over the past seven days which marked the third consecutive week of losses. Soybean meal strengthened on the week with nearby contracts up by US$10.20 per short ton.

Wheat futures traded lower on the week with Chicago and Kansas City futures down by 21 to 23 cents per bushel. Minneapolis futures were down by only 11 cents per bushel over the past seven days.  Basis levels were mostly lower with wheat cash prices down by C$5.20 to C$6.89 per tonne across the Prairies.

Corn futures closed the week lower with the nearby March contract down by eight cents per bushel. Oat futures posted losses of five cents per bushel during the past week. Cash oat prices increased  by C$4.00 per tonne in central Saskatchewan. Cash barley prices in Alberta were essentially flat during the past week at C$238.23 per tonne

Cattle futures prices were mixed this week as feeders pushed higher by 5.33 cents per hundred-weight. Live cattle were slightly lower last week and dropped by US$0.83 per hundred-weight. Hog futures closed higher for the second consecutive week with nearby contracts up by US$3.27 per hundred-weight.

 

 

 

 

Weekly Chicago December Corn Futures

Weekly Chicago December Wheat Futures

Weekly Minneapolis December Wheat Futures

Weekly Kansas City December Wheat Futures

Weekly Chicago Soybeans January Futures

Weekly ICE Canola January Futures

  

Trumps Thanksgiving turkey for Canada

U.S. Thanksgiving week is usually slow on the news front, but President elect Trump made sure to give Canada a preholiday turkey. Trump issued a statement on social media that one of his first initial moves after inauguration would be to initiate tariffs of 25 per cent on Canada and Mexico. He said he would also issue additional 10 per cent tariffs on China.

Like most things that come out of Trump’s social media feed we need to take a pause and evaluate rather than panic. This is just the first salvo in what will be a long renegotiation of the current USMCA agreement. It is important to remember that the two largest Canadian imports in the U.S. are lumber and crude oil.

Lumber imports from Canada will be hard to replace and will result in increased house construction costs. This would be a hard pill to swallow for an administration that is committed to lowering housing costs.

Crude oil should be even more a concern for U.S. as it would impact gasoline prices, especially in the U.S. Midwest. The problem with trying to replace Canadian crude would be two-fold. Firstly, the quality of U.S. crude oil is not the same as Canadian crude oil. The new production in the Permian basin is a very light sweet crude while the Canadian production is a heavy oilsands crude. U.S. refineries are set up for Canadian crude and it would take a substantial investment to refit the Midwest refineries to process lighter crude oil. The other problem is that current pipelines are not set up to move crude from Texas into the U.S. Midwest. Higher gas prices in the U.S. are not part of Trump’s playbook for 2025.

The U.S. will quickly move off of their position of blanket 25 per cent tariffs on Canada to a sector-by -ector tariff regime. Canada will counter with our retaliatory list and the negotiations will continue. The main worry for the agriculture sector will be the supply managed sectors. There will likely be significant pressure to reinstate country-of-origin label requirements for Canadian beef.

The important take away from this Thanksgiving dinner will be to calm down and eat another piece of pie before getting concerned about the empty 25 per cent tariff threat.

 

Canada’s Strategy for U.S. Trade Talks: Leaving Mexico Behind

According to the Wall Street Journal, Canadian officials, including Prime Minister Justin Trudeau, are indicating they might abandon Mexico to gain favor with the incoming Trump administration as they prepare for challenging trade negotiations.

With a review of the U.S.-Mexico-Canada Agreement (USMCA) set to begin next year, Canadian leaders have expressed readiness to negotiate directly with President-elect Donald Trump, potentially sidelining Mexico.

Concerned that Mexico has become a gateway for Chinese goods into North America, which would normally face high tariffs in Canada and the U.S., Trudeau reportedly discussed this issue with Mexican President Claudia Sheinbaum at the G-20 summit.

However, Mexican trade officials say there’s no proof that China is using Mexico to bypass tariffs when selling to the U.S. and Canada. U.S. and Mexican customs cooperate on trade inspections and impose strict penalties on companies that violate import regulations.

In 2023, trade within the USMCA reached $1.6 trillion, with Mexico being the largest trading partner for the U.S., closely followed by Canada.

According to Mexico’s Deputy Trade Minister Luis Rosendo Gutiérrez, most of China’s investments in North America go to the U.S., with only a small fraction directed to Mexico.

Trudeau’s finance minister, Chrystia Freeland, admitted to sharing the Biden administration’s concerns about Chinese investments in Mexico, emphasizing that Canada is aligned with the U.S. and cannot be seen as a backdoor for unfair Chinese goods, unlike Mexico.

Despite concerns, Mexico remains an important trading partner for Canada, ranked third after the U.S. Former Canadian trade negotiator John Weekes noted that Canadian businesses benefit from the growing Mexican market.

Canada is already aligning its policies with the U.S. to address competition from China. For example, Trudeau’s government matched U.S. tariffs on Chinese electric vehicles and steel.

Mexico is looking to create a North American import substitution strategy for Chinese products, particularly since American manufacturers in Mexico rely heavily on Chinese imports.

Mexican officials have expressed the need for discussions on a new framework regarding China as the USMCA review approaches. Economy Minister Marcelo Ebrard suggested they need to talk to Trump about these issues soon.

Reports indicate that Canadian officials and several provincial leaders see sidelining Mexico as a winning strategy in upcoming trade talks. However, this approach could be risky, as Canada will need Mexico’s support to defend against U.S. pressures regarding existing trade agreements. The strategy of dividing and conquering may harm Canada’s reputation as a reliable partner, leading other countries to question its dependability in international negotiations.

 

CN Remains Hopeful Despite Possible Strike

A CN Railway executive stated that there are still many discussions ahead to avoid a labor disruption, according to the Western Producer. The company has been dealing with various labor disputes, with another potential conflict on the horizon.

On November 25, CN clerks and mechanics voted overwhelmingly for a strike mandate. They are seeking better pay, job security, and improved working conditions, which would affect around 2,500 workers.

At a recent agricultural exhibition, CN’s vice president for bulk, Sandra Ellis, mentioned that negotiations are ongoing, and there are scheduled meetings to continue discussions.

Despite the strong vote for job action, Ellis expressed optimism that they could reach an agreement, emphasizing that both parties are committed to negotiating.

This follows previous contract negotiations that were challenging, culminating in a lockout to ensure controlled operations. The federal government eventually mandated binding arbitration, which will occur in 2025. Without a resolution, CN’s Unifor workers could strike as early as January 1.

Rogers Sugar Reports Strong Q4 and Fiscal 2024 Results

Rogers Sugar Inc. announced its fourth-quarter results for fiscal 2024, boasting adjusted earnings of $38.3 million for the quarter and $141.6 million for the year.

President and CEO Mike Walton highlighted improved profitability for three consecutive years, attributed to better results in both their Sugar and Maple segments. The company is focused on future growth, including expanding its production in Eastern Canada through a planned project.

Looking ahead, Walton expects strong financial performance in 2025 due to ongoing demand growth in the North American sugar market and recovery in the Maple segment.

Prairie Watersheds Climate Program Achieves Record Success

The Prairie Watersheds Climate Program in Manitoba had its most successful year yet in 2023-24, according to project manager Dan Cox.

During the last year, 731 Manitoba farmers received funding for various sustainability projects, totaling $7.45 million across 200,000 hectares.

This year, the number of farmers receiving funding grew significantly, with 947 producers accessing financial support for projects worth $9.75 million, benefiting 365,000 hectares.

The association aims to reach over 1,000 producers in the next year, with projected project values increasing to $10.65 million.

Canadian Beef Cow Inventory Declines, Carcass Weights Increase

The Canadian beef cow herd is showing signs of consolidation, according to Canfax, with the total herd smaller but an increase in breeding heifers. The U.S. cattle herd has also declined.

Canadian fed carcass weights have increased from last year, supporting domestic production even as slaughter volumes decrease. Export volumes of beef and veal are expected to surpass 2022 records.

The Canadian beef cow inventory has slightly decreased, with 3.49 million head reported. The number of beef breeding heifers has risen slightly, while the dairy cow herd remains stable.

From January to July 2024, beef and veal exports rose compared to last year. The U.S. remains Canada’s largest trading partner in beef.

USDA Lowers Brazil’s Coffee Production Estimate

The U.S. Department of Agriculture lowered its forecast for Brazil’s 2024/25 coffee crop to 66.4 million bags, down from 69.9 million bags, following adverse weather conditions.

Robusta production has decreased, but there is a slight increase in arabica coffee expected. Meanwhile, Brazil’s coffee exports have hit record highs.

U.S. Tariffs May Impact Canadian Pulse Exports

Canadian pulse exporters face new challenges as President-elect Trump plans to impose 25% tariffs on imports from Canada and Mexico. This could significantly affect the movement of edible beans, a large portion of which are exported to the U.S.

Before the tariff announcement, Canada was expected to see lower prices for pulses due to higher North American supplies. The proposed tariffs might change that outlook.

Farming Shifts: More Cotton in Brazil

Farmers in Brazil are increasing the area planted with cotton at the expense of corn, driven by rising demand, particularly from China.

Canadian Canola Crush Continues to Set Records

Statistics Canada reported record canola crush numbers for October, reaching 1.1 million tonnes. The current pace suggests the 2024-25 crop year could hit close to 12 million tonnes, exceeding last year’s record.

Trump Appoints Jamieson Greer as Trade Representative

President-elect Trump has appointed trade lawyer Jamieson Greer as U.S. Trade Representative, where he will focus on addressing the trade deficit and defending U.S. agriculture and manufacturing.

Impact of Trump’s Tariff Plans

Trump’s proposed tariffs on imports from Canada and Mexico could affect various industries and lead to increased prices for U.S. consumers. Canada plays a major role in supplying the U.S. with agricultural products, including vegetable oils and potash.

Price Increases Expected Due to Tariffs

The changes in U.S. trade policy could lead to higher prices and reduced supplies for numerous products, particularly in the agricultural sector.

Bob Kennedy Jr.’s Agenda Raises Concerns for Food Companies

Robert F. Kennedy Jr. has criticized processed foods and sugars, potentially affecting shares of relevant companies following his appointment as head of the health department.

Canadian Wheat Milling Increases

Canadian wheat milling reached 290,000 tonnes in October, marking the highest grind for that month in a decade.

JM Smucker Raises Profit Forecast

JM Smucker is monitoring upcoming policy changes while reporting strong earnings attributed to consumers cooking more at home.

Mississippi River Levels Improve for Soy Exports

Recent heavy rains have increased Mississippi River levels, allowing for a smoother export process for soybeans, which is crucial before the South American harvest.

Ukraine Oilseed Exports Decline

Ukrainian soybean and rapeseed exports have decreased in early November compared to previous months, likely due to already having sold most of their stocks.

Brazilian Meatpackers Halt Supplies to Carrefour

Brazilian meatpackers have stopped supplying Carrefour Brasil after the CEO of its parent company expressed concerns over Brazilian meat standards.

Favorable Weather Aids European Crop Sowing

Warmer and drier weather in Europe has helped farmers to plant crops and harvest more efficiently, although some regions still face challenges.

U.S. Crop Update

Winter wheat planting is nearing completion, with good emergence rates and improved conditions reported.

Significant Rise in Grain Deliveries

Statistics Canada reported a sharp increase in grain deliveries for October compared to 2023, with durum deliveries seeing the largest rise.

In total, over 6.43 million tonnes of grains were delivered, a significant jump from last year’s figures.

The threat of Trump’s tariffs on canola oil led to a drop in ICE canola futures and cash prices. Meanwhile, soybean futures and prices saw some increases, while wheat and corn futures also experienced declines.

Overall, the cattle futures market saw mixed prices, with feeders slightly up and live cattle down, while hog futures increased for the second consecutive week.

 

 

 

 

Weekly Chicago December Corn Futures

Weekly Chicago December Wheat Futures

Weekly Minneapolis December Wheat Futures

Weekly Kansas City December Wheat Futures

Weekly Chicago Soybeans January Futures

Weekly ICE Canola January Futures

  

Trump’s Thanksgiving Surprise for Canada

This U.S. Thanksgiving week is typically quiet for news, but President-elect Trump made headlines by announcing upcoming tariffs of 25% on Canadian and Mexican goods after he takes office on January 20. He’s also expected to increase tariffs on Chinese products.

While these statements might raise concerns, it’s crucial to take a step back and understand that this is just the beginning of what will be a lengthy renegotiation of the USMCA agreement. Canada’s most significant exports to the U.S. are lumber and crude oil, which are critical for housing costs and gasoline prices in the U.S. Midwest. Replacing Canadian lumber won’t be easy and will likely increase construction costs. Similarly, replacing Canadian crude oil poses quality and logistical challenges for U.S. refineries.

It is likely that the U.S. will shift from blanket tariffs to a more targeted, sector-specific approach. Canada will respond with its list of counter-tariffs, and the negotiations will proceed. The agriculture sector could face significant pressures, especially in sectors like beef. The key takeaway is to stay calm and be prepared, as the 25% tariff threat may not have immediate repercussions.