The US has introduced a 25% tariff on a wide range of Canadian goods, including key agricultural products such as canola, beef, and pork. As Canada retaliates with tariffs of its own, the situation is creating uncertainty for North American agricultural markets.
The US is Canada’s largest agricultural export market, importing over $17 billion worth of Canadian grain and grain products every year to meet domestic demand, according to the Grain Growers of Canada (GGC). These imports include wheat for bread, durum for pasta, oats for food products, canola for oil and biofuels, barley for feed and brewing, and other grain and grain products for widespread usage.
As of 2023, Canadian wheat exports to the US totaled over $1 billion, oats reached $580 million, barley accounted for over $200 million, and canola exports — crucial for cooking oil and biofuels — were valued at $8.5 billion.
"These tariffs are going to have negative consequences for farmers and consumers on both sides of the border," said Keith Currie, president of the Canadian Federation of Agriculture. The organization is concerned that increased tariffs will lead to higher costs for consumers and damage the competitiveness of North American agriculture.
“Our agriculture sectors rely on each other, not just to sell products to one another but also to provide essential inputs to grow food such as fertilizer. No one wins in a trade dispute between Canada and the US except for our competitors around the world. Tariffs are quite simply, bad business.”
Canadian livestock producers are heavily reliant on access to the US market. In a website post last week, Farm Credit Canada (FCC), Canada exports 17% of its total cattle production, with Canadian exports to the US making up 99% of all exports. On the hog side, Canada exports 22% of its total production, with exports to the US making up 99% of all exports. Of those pigs that are exported, 60% (or 4 million pigs annually) are isoweans weighing less than 7 kgs that are destined for fattening and slaughter in the US. The majority (2.6 million) of these isoweans are from Manitoba.
In addition, approximately 25% (or 1.6 million pigs annually) of Canada’s hog exports are market weight hogs destined for slaughter. Over the last four years Canada has lost a significant amount of domestic pork processing capacity; one result of this has been more market-ready hogs have been sent to the US for slaughter, particularly in eastern Canada.
As noted by FCC, the frequency of cross-border trade is higher in the cattle market, which will complicate the calculation of potential tariff impacts. For example, a calf could be born in Alberta, sent to Montana to graze, sent back to Alberta for fattening in a feedlot, and then shipped back to the US for slaughter. This frequency complicates the calculation of potential tariff impacts.
“The integration of the North American live cattle and beef supply chain is unlike anywhere in the world, contributing to both food security and local and regional food systems,” said Nathan Phinney, Canadian Cattle Association President. “The US and Canada have the largest two-way trade in live cattle and beef in the world . . .”
Canada's canola farmers are bracing for a major hit as well, as US tariffs target canola seed, oil, and meal, likely reducing demand for Canadian products and affecting nearly 40,000 farmers across the country. The Canola Council of Canada warns these measures could have long-lasting consequences on farm incomes and the broader agricultural sector.
The US is Canada’s No. 1 market for canola exports and another example of a market that is highly integrated with the Canadian canola industry.
“The application of these tariffs on Canadian-grown canola and canola products will be felt across the canola value chain,” said Chris Davison, Canola Council of Canada (CCC) President & CEO. “Tariffs will have devastating impacts on farmers, input providers, canola crushing activities and exports of canola seed, oil and meal.”
Beyond the tariff impact here in Canada, the Grain Growers of Canada said a Canada-US trade war will increase the cost of essential food staples for American consumers.
“This isn’t just a tariff on Canadian farmers—it’s a tax on every American family purchasing a loaf of bread, oatmeal, canola oil, and other food staples at the grocery store,” said Kyle Larkin, Executive Director of GGC. “A 25% tariff is, in effect, a 25% tax on American consumers.”
“Reckless tariffs will only lead to costly consequences,” added Tara Sawyer, Chair of GGC and Alberta grain farmer. “This is both true for Canadian grain farmers but also American producers who rely on Canadian potash to fertilize their farms. Whether you’re growing crops or buying groceries, these tariffs will make life more expensive at a time when most are already being priced out.”
As of late Monday morning, corn, wheat, and soybean futures were all trading moderately higher, with oats up as well. Live cattle and feeder cattle contracts were also pushing higher, while hogs were mainly lower. Canola futures were trading anywhere from 80 cents to $3.40/tonne lower.
