Scandinavian oats may be shut out of the United States if the European Union refuses to open its doors to U.S. beef treated with hormones.
And that could open the door to some short-term higher oat prices and exports for Canadian growers, say some in the industry.
Oats are part of a preliminary list of 80 items the U.S. trade representative is considering for 100 percent tariffs. A spokesperson for the trade office said the list will be pared down based on comments from importers and exporters.
Read Also
Mail strike disrupts grain sample delivery
The Canadian Grain Commission has asked farmers to consider delivering harvest samples directly to CGC offices, services centres or approved drop offs as Canada Post strike delays mail.
“I believe there was a fair bit of concern about oats being on the list,” said Amy Stilwell.
If the EU doesn’t open its market to U.S. beef by May 13, the office will ask the World Trade Organization for permission to implement tariffs on targeted EU exports as early as June 2.
The president of United Grain Growers said he hopes oats stay on the list.
“I think it would be great if it happened,” said Ted Allen, who often speaks out about the price-depressing effect of EU export subsidies.
“Certainly the market would be far better,” he said.
But Karl Gerrand, of Can-Oat Milling in Portage la Prairie, Man., said the tariff would send the North American oat industry into “a state of disruption.”
Gerrand said he opposes subsidies, and completely supports free trade. He said he understands why the U.S. government wants the EU to comply with a WTO ruling on beef imports. But he and other members of the American Oat Association don’t think retaliation is the right way to get change.
“I just think it could be handled in a different way, a more constructive way,” said Gerrand.
He noted France and Germany have been the main holdouts against U.S. beef. These countries don’t export oats, and won’t be hurt by the tariff.
The U.S. imports 600,000 to 700,000 tonnes of oats from Scandinavian countries, said Gerrand.
Oats futures prices on the Chicago Board of Trade have already rallied 10 to 12 cents (U.S.) per bushel higher because of the perceived risk of the high import tariff, said Gerrand. If the tariff comes into play for oats, futures prices could move another 10 to 12 cents (U.S.) per bu. higher, he said.
Jack Shymko, who grows oats at Ituna, Sask., said while every rise in price helps, he doesn’t think the tariff would have a major impact on Canadian farmers’ oat prices.
Most Scandinavian oats go to the southern U.S. feed market, said Shymko, the vice-president of the Prairie Oat Growers Association.
Canadian growers target the higher-quality U.S. and Canadian milling markets, said Shymko.
He said he doesn’t like the principle of trade retaliation, but added he sees why governments have to try to make the EU conform to the WTO agreements it signed.
The European Union has banned U.S. and Canadian beef for 10 years. After a lengthy settlement process, the WTO ruled the EU must open its markets by May 13.
Other items under consideration for 100 percent retaliation tariffs include meat products, roquefort cheese, flowers, tomatoes, truffles, chestnuts, paprika, chewing gum, chocolate, fruit and juices, mustard, mineral water and motorcycles.
