A new duty on corn imports from the United States is being hailed as a coup by some Canadian farmers and a royal pain by others.
On Nov. 7, the Canada Customs and Revenue Agency announced it would immediately start collecting $1.58 (US) on every bushel of American corn sold to provinces west of Ontario.
Overnight, the value of corn in southern Manitoba leapt to $5 (Cdn) per bu. from $2.50 to $2.60 per bu.
That put a smile on the face of Mike Coates, a Carman, Man., farmer who spearheaded a complaint about depressed prices and lost sales because of dumping and U.S. subsidies.
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“We’re quite happy with the decision,” said Coates, who said he was surprised and pleased at the level of the duty. “We’ve accomplished what we set out to do.”
Coates said the province’s 391 corn producers faced, at best, break-even prices this year before the decision. Now, they will profit.
Corn growers are unlikely to find buyers at the $5 per bu. price, he acknowledged, but they will be able to command competitive prices compared to feed wheat and barley.
He said local feed grain bids rose by $1 per bushel because of the duty, meaning this year’s 10 million bushel crop will yield corn farmers an additional $10 million.
The duty will also help farmers who grew other feed grains, Coates said.
But the duty has raised the ire of western Canadian farmers who were buying U.S. corn.
“I think these corn producers are shooting themselves in the foot,” said Dave Waldner, a hog producer from Morris, Man.
“Unless the grain prices go up, they’re going to sit on their corn.”
Waldner has fed his pigs corn for the past four years because of attractive prices and because local feed grain supplies were often contaminated with toxins from fusarium headblight.
Waldner has two weeks’ worth of corn in his bins. Now that U.S. corn is twice the price, he won’t be buying any more.
Instead, he’ll formulate his rations to include more barley and replace the corn with feed wheat.
There are ample supplies of feed wheat in Saskatchewan, noted Waldner, although he said he’ll end up spending more than usual on transportation.
He was unsympathetic to the corn producers’ complaint of depressed prices because of U.S. subsidies.
Other commodities in Canada face the same situation, he said, adding corn producers should grow something else if prices are too low.
