Left on the desk, Sept 22: Go Fund Me farms, Costco delivery, and Canada's pot bonanza

It has been a very crazy week in the world of economics, politics, and news.

Thank you for all of your feedback on this column in the past and please keep it coming. I love interacting with you and getting your thoughts on all the issues impacting agriculture. You can email me at [email protected].

Here are the many stories, tidbits, odds and sods left printed out and on my desk at week’s end.

It was a record week for the S&P 500 and DJIA indexes in the U.S. as the bull run for U.S. equities has continued. This same bull run has not taken place in Europe, Asia, or Canada in 2018.  While the DJIA is up 8.11% year to date, the Shanghai Composite is down 17.5%, the DAX (Germany) is down 4.6%, the FTSE 100 (UK) is down 4.2%, and TSX in Canada is up 0.03%.

Any farmer or rancher from around the world will tell you access to credit is one their top three challenges. Schedule One banks, credit unions and private financing are all options that come in many shapes and sizes. But how many of you have you ever thought about Go Fund Me? Some dairy farmers in the U.S. are using Go Fund Me to prevent foreclosure and save their farms.

We have been running a poll this week asking which trade agreement Canada focus on. The options were NAFTA 2.0, CETA, and CPTPP.  Of the people that responded, 65% say NAFTA 2.0, 29% CPTPP and only 6% voted CETA.  It’s good to see that people understand the relative value that these agreements bring to Canada. CETA is great but it’s no NAFTA.

For the one year anniversary of CETA, I see that Canadian beef exports to the EU are up 15% by volume and up 21% by value (January thru July). This is a good start but there is a lot more room for growth once production of EU-eligible cattle picks up.

The NAFTA talks continued this week, and you have to wonder what next week will bring.  As you have likely heard me say before, Canada is really relying on congress to continue to support the trilateral arrangement. Back in August I wrote a post on why this has been Canada’s strategy from the beginning. Time will tell if the non-partisan conversations and trips to D.C. will pay off.

As Mexico waits on the sidelines, a representative of Mexican President elect Obrador said that if Canada and the U.S. cannot find a deal, Mexico would be interested in a bilateral with Canada. Politics continues to take precedence over trade and this obscures the objectives of the parties and skew the direction of the talks. People are accusing the Canadians of talking tough to feed the domestic political beast but all three countries are making decisions that are more political than constructive.

We have focused most of our trade commentary on CPTPP, NAFTA and China but there is another trade dispute to pay attention to. UK Prime Minister Theresa May had her BREXIt plan (Chequers) unanimously voted down by EU leaders. In a very sobering speech from 10 Downing Street, May insisted that, “Throughout this process, I have treated the EU with nothing but respect. The UK expects the same, a good relationship at the end of this process depends on it.”

The Economist reported that “the death of the Chequers deal (never, perhaps, very alive) probably pushes Britain towards a looser, Canada-style, free-trade agreement as the basis for its future relationship with the EU.”

It has been exhausting and puzzling to watch the Senate hearings to confirm Judge Kavanaugh to the U.S. Supreme Court. It has included bizarre speeches, soft announcements of presidential runs, 35-year sexual assault claims, accusations of identity mix up, and proposed testimony next week that will make it a full three ring circus. All of this before the vote even happens. Senate Judiciary Committee Chairman Chuck Grasserly tends to be the leader of U.S. midwest advocates so he is familiar to many in agriculture.

Costco has plans to expand its twoday delivery business across Ontario. The company announced it would be extending delivery of non-perishable groceries, health beauty products, and other household items across the province, with the exception of Northern Ontario. With orders over $75 delivery is even free. Just imagine how much you could buy from Costco if you didn’t have to beg for boxes and have to push the flat deck cart out to your vehicle.

Every morning I watch CNBC to see what analysts are saying at the open of the financial trading day.  This week there was a lot of attention paid to the hot market for Canadian pot companies. Tillray is one of the companies that is getting major attention as it was the first pot company to list on the NASDAQ. In a short period of time it has a higher market cap than American Airline and Expedia. The road riches in the pot market does come with volatility as Tilray was down 30% on Friday and lost $10 billion in market cap. You could say that $10 billion went up in smoke…..cough.

Many upstart retailers and familiar names see retailing pot products as a gateway to profit. Even Shoppers Drug Mart is getting closer to getting into the act. As excited as retailers are, in general the traditional farming population seems to be left out of the commercial production.

When Maxime Bernier decided to start his own party I joked that he will have lots in common with Elizabeth May leader of the Green Party because they both represent one issue parties. Well now they are seated side by side in the House of Commons. Bernier made news Wednesday when he seeked unanimous consent for a motion calling on the government to put the “complete abolition” of the system on the NAFTA negotiating table. Berniers new neighbour May had a pretty strong response.

And finally Abacus Data came out with some new polling that the Liberals are slightly ahead of the Conservatives in voting intention for the 2019 election, 38% to 34% respectively.  A year ago this was not a race at all and now it will be an election with much to debate including taxation, immigration, trade, hand gun bans and the carbon taxes. Check out the link. There are tonnes of interesting data points for us political wonks.

Have a great weekend, and if you have any feedback please send me an email at [email protected]

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