The trade war between the U.S. and China has been a stress point for many people in agriculture. Soybeans are continually the focus of any discussion involving agriculture and China because of the appetite that the Chinese have had for the protein source.
It is difficult to determine how much of the price fluctuation in soybeans can be directly attributed to African swine fever, changing trade flows, growing ending stocks or tariffs — but it’s undeniable that soybean growers have been impacted. For Canadian soybean growers, there is concern for the amount of subsidies that U.S. growers have received and will still get under the 2019 Market Facilitation Program (MFP 2.0).
Ron Davidson, executive director of Soy Canada, says “Canadian soybean growers have been impacted for well over a year now.” He adds that Canadian growers are being impacted on where we export, prices and it’s also effecting what we import into Canada. “Everything that is happening globally is being reflected back onto Canadian soybean growers.”
In the U.S., growers received $1.65 per bushel under the first MFP and will receive additional per acre payments in MFP 2.0. So far, the Canadian government has not provided a direct subsidy payment but Soy Canada and the provincial soybean grower groups feel that needs to change.
“We are talking [with the federal government] about compensatory payments for growers in Canada as we are facing a subsidy supported depressed international marketplace,” says Davidson
Canola has also been an impacted by the trade disruption with China but Davidson believes it’s a different reality than soybeans as, “canola is not facing massive U.S. subsidies and there are alternatives for canola to export oil and meal, which soybeans cannot.
“Significant volumes of soybeans were exported to China in the fall of 2018, but according to Statistics Canada, that has virtually stopped in 2019,” says Davidson.
Hear Shaun Haney’s discussion with Ron Davidson of Soy Canada below