Mike Coates was upbeat last week as he began harvesting corn at his family’s farm near Carman, Man.
The yields were looking good and, due to a ruling by the Canadian International Trade Tribunal, prices for his corn could rise early this winter.
The CITT issued a preliminary ruling Oct. 10 that corn shipments from the United States are harming western Canadian corn producers.
The ruling opens the door for the Canada Customs and Revenue Agency to impose interim tariffs on U.S. corn imports to Western Canada beginning next month.
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The tariffs would drive up the price paid for American corn entering Western Canada. That price dictates what Manitoba’s corn growers receive for their crop.
The Manitoba Corn Growers Association alleges that American corn is heavily subsidized and is being sold into the West at below cost of production.
Under world trade rules, selling below the cost of production can be classified as dumping, an unfair trade practice.
The Manitoba corn growers lodged an official trade complaint this summer.
Taking on the world’s largest corn producer without government help was a bold move for the group of 400 farmers.
Coates, who is vice-president of the Manitoba association, said last week’s ruling came as no surprise.
“It was kind of a no-brainer. We know (the Americans) are subsidizing and we know they are dumping.”
But last week’s preliminary ruling is only the first leg of a longer journey.
Trade authorities must now decide the level of hurt caused by imports of U.S. corn. And the allegations that American corn is being dumped into Western Canada also must be dealt with.
The final outcome could be a tariff on U.S. corn that lasts five years with the possibility of extensions.
Peter Clark, an international trade consultant representing Manitoba’s corn growers, expects the U.S. government to put up a fight on behalf of its corn growers.
There were already signs last week that the U.S. trade department will get involved.
“They’ll throw all kinds of people at us and all kinds of money at us,” Clark predicted. “Their corn producers are no doubt upset.”
Clark, who has worked on other trade complaints involving U.S. imports, said there is no doubt American imports are depressing Canadian corn prices.
Those imports also are taking market share away from Manitoba producers, he said.
“It’s a growing market, but Manitoba growers aren’t getting their share of that market.”
Manitoba produces 10 to 12 million bushels of corn a year for distillers and the livestock feed market. The province needs about 27 million bu. annually, which means there is room for imports.
Coates said Manitoba corn growers do not want to hurt their counterparts in the U.S. northern tier states. Nor do they want to shut them out of markets in Western Canada.
“By all means, we’re not trying to shut down their production,” he said.
“We can’t supply the whole market anyhow.”
The trade tribunal is expected to release its reasons for the preliminary ruling before the end of October.
