Last month, Canadian canola producers were hit with retaliatory tariffs from China, with 100% tariffs affecting exports of canola oil and meal. As Canada exports 90% of its canola production, the stakes are high for our approximately 40,000 canola producers.
Close to $5 billion of canola products are sent to China each year with the majority being seed.
According to Stats Canada close to 1/5 of Canada's canola exports to China in 2024 was canola meal with a value of approximately $918 million. Canola meal is the high-protein feed ingredient derived from canola seeds, used in livestock feed to support high levels of production and efficiency. Canola meal is now subject to 100% tariffs.
'Uncertainty' is the word that plagues Canadian producers in many parts of the Ag sector as we anticipate more changes coming.
Applied Research Specialist with Manitoba Agriculture, Scott Chalmers, says there might be some hesitancy among canola producers to grow canola this year, not only because of the tariffs, but because of verticillium stripe gaining ground in that crop.
"That disease has really taken ahold, and our rotations are so frequent with canola that it's becoming a problem," he explains. "Verticillium Stripe makes a microsclerotia which infects the root zone in plants and apparently can last in the soil 10-15 years. And we've been running rotations about every third year with canola in general."
Once the canola plant is fully ripe, the stem peels to reveal the tiny black microsclerotia. The microsclerotia remains on the plant stem or falls to the soil.
Chalmers says they're seeing what seems to be a disease build-up that if a farmer does grow canola, he could potentially have this disease. "And it pulls down the yield by maybe 10-15%, which is really the net margin that you're looking for in a crop. And so, there is already an inherent risk rotating back into canola."
"So, some farmers are looking into other crops like flax or sunflowers just to kind of wean ourselves off canola for a little bit," he adds. "But again, canola does pay the bills, and it has been sort of holding its own here with price in the market despite some of these tariffs. And there is speculation that those futures will start rising as well."
Scott Chalmers says what's happening with the tariffs and trade agreements seem to be changing every day, if not every hour.
"Unfortunately, that's where things are at and this is all based on a de-globalization concept with countries trying to become self-sufficient and less reliant on others. It's just a new reality," he adds.
Chalmers says the tariff situation has motivated some farmers to switch up their crop plan for this year.
"There have been a few motivations," he says. "One was the dry bean market. There have been a few interests there with producers getting into that business. Maybe they are new growers. And some are getting a bit more into corn, potentially because they would like to supply the domestic market and take advantage of that."
With the uncertainty that's looming over Canadian agriculture, Chalmers says he's heard some farmers are not wanting to take the risk when they don't see a profitable margin when weighing in input costs and are contemplating not putting in a crop this year.
"That really depends on the farm, the economics of each specific farm," he adds. "Farms that are well-established financially probably have the ability to buffer a year like this, whereas other farms like maybe a young farmer or highly loaned out may struggle with making a margin this year on many of the crops."
"... every day that we get closer to seeding we may have to rehash the numbers..."
When Manitoba Agriculture came out with their cost of production guide for 2025 most of the crops showed a loss, says Chalmers. "That was concerning. I think a lot of farmers had seen it coming. But every day that we get closer to seeding we may have to rehash the numbers and to consider what's going on with tariff markets, our weather situation that could be emerging here, and really pencil out some of these inputs."
"If I was to cut back on something it would be maybe seed treatments, or phosphorus fertilizers, and maybe fungicide if the conditions were really not there for fungus," he says. "Other things you know you need to maintain the insects and make sure they're not getting out of hand."
"So, it's kind of watch and see," adds Chalmers, "and one of those years where you're going to have to adapt to things."
Please listen to more with Scott Chalmers below.