Despite anticipation of a big deal, the end of the corn countervail has meant little to prairie feed grain buyers and sellers.
“The day (the government) announced that the corn tariff had been thrown out, everybody pulled all their feed barley bids,” said Calgary grain broker Doug Chambers.
“But people are back in the market, basically at the same place they were before.”
Canadian corn growers applied for and received import penalties against U.S. corn because of U.S. subsidy programs. Often import duties will shut off one source of a product and allow domestic producers to raise prices.
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But that didn’t happen during the corn fight for two reasons.
“Because of the loophole, it hadn’t stopped corn coming in,” said Chambers.
The loophole allowed Canadian livestock feeders who sold their fattened animals into the U.S. market to avoid paying the penalties.
“It would have made a difference if there was no corn coming in, because there would have been one less competing source, but that wasn’t the situation.”
Analyst Errol Anderson said a shortage did not develop, so prices hardly budged.
“It was nothing, really,” said Anderson. “There was little impact.”
That doesn’t mean a similar tariff or countervailing duty situation wouldn’t have a radically different effect in the future, Anderson said.
If the U.S. corn belt is hit by bad weather this summer, and North American feed supplies fall short, any additional restriction on supplies could see domestic prices spike.
“It could have been really different a year from now,” he said.
Feed grain has recently traded in a wide price range, as some buyers have become picky about quality, Chambers said.
“There’s up to $20 a tonne difference in some bids for the same grain.
Feedlots have one quality they’re looking for, feed mills another, and farm feeders have their own range.
In Manitoba, the market most affected by the corn fight, the biggest recent factor has been the search for fusarium-free feeds. Some hog producers demand only a low-vomitoxin count, but others also want a mould test, and some want detailed mould tests.
That difference in buyers leads to micro-classes of feed grains and their accompanying bids, Chambers said.
“We have so many different qualities now.”
But the period when corn imports were restricted had little effect because buyers such as grain companies and Hutterite colonies moved to lock up supplies in anticipation of the market moving.
