U.S. tariffs a 'devastating' blow to Alberta farmers and ranchers
Canada's neighbours are the main export market for Alberta beef and canola
As the threat of U.S. tariffs on Canadian goods became a reality on Saturday, agricultural producers in Alberta are feeling disappointed and uncertain about how badly it will hurt their businesses.
U.S. president Donald Trump has imposed a 25 per cent tariff on virtually all Canadian goods, which will heavily impact industries that rely on exports south of the border like beef and canola. The U.S. is Alberta's largest export market for agricultural products, accounting for nearly $8.8B in 2023.
The tariffs, which are scheduled to take effect on Tuesday, are expected to discourage American buyers from purchasing Canadian products as costs rise, creating instability for the sector.
The news follows months of uncertainty that left agricultural producers unsure of how to brace for the incoming sanctions.
Alberta Canola chair Andre Harpe said in that time he's noticed an attitude of resignation among farmers about their lack of control of the situation. He said producers are worried to see the price of their product go down amid an affordability crisis that's seemingly raising the cost of everything else.
"For the Alberta industry, this is going to be devastating," said Harpe, who's also a canola farmer in the County of Grande Prairie. "Farmers are the backbone of rural Alberta."
In 2023, Alberta's leading agricultural exports to the U.S. were beef at $3.1 billion, crude canola oil at $1.2 billion and live cattle at $980.2 million, excluding purebred. Across the country, the U.S. is the primary export market for Canadian beef at roughly 75 per cent in 2023, with Alberta being the source of the majority of beef exports.
The live cattle and beef supply chain between Canada and the U.S. is also highly integrated, making up the largest two-way trade in live cattle and beef in the world.
WATCH | How U.S. tarrifs will impact Alberta's agriculture industry:
In a joint-statement, the Canadian Cattle Association (CCA) and the National Cattle Feeders' Association (NCFA) said the beef industry would seek an exemption from the blanket tariffs, and will be advocating for relief supports for impacted producers.
"We expect our trade agreements to be respected and honoured," said CCA president Nathan Phinney. "International trade is advanced through negotiation and compromise, as was done with the revision of NAFTA by president Trump himself."
"Small- and medium-sized processors and local and regional food systems in the U.S. rely on Canadian cattle to thrive and stay in business. Similarly, the U.S. is a crucial export partner for the Canadian beef industry," Phinney said in an earlier emailed statement.
He added that the sanctions will strike not only farmers, but feedlot operators, packing plants, trucking companies and "other upstream and downstream partners" in the supply chain.
"We can expect an immediate increase in volatility."
Janice Tranberg, president and CEO of the NCFA, notes that the integrated market between Canada and the U.S. means that live cattle and beef often cross several times back and forth across the border, and that tariffs would raise costs across the industry in both countries.
"A product from a single cow could actually move across the border four times. So this is not going to be just an impact to Canadians, it's going to be an impact to [Americans]," Tranberg said.
In the joint-statement, NCFA chair Will Lowe noted that the cattle industry, unlike some others, is not able to adjust at the same pace.
"When dealing with live animals you are not able to pivot quickly," said Lowe.
Long-term, Tranberg said the industry will need to look at selling to a wider variety of international markets and become less reliant on the U.S.
But in the short-term, experts note that the rising price of agricultural exports is likely to dampen demand for these products abroad, in turn, hitting farmers particularly hard. The extent of that impact will vary from sector to sector, Canada West director of trade and trade infrastructure Carlo Dade said.
Dade points out that how much U.S. consumers have already stockpiled certain products is bound to be a major factor in how much damage the tariffs bring to Canadian exports. Dade highlighted that cattle producers are likely to take a significant hit, because of how often cattle transfers across the border and how unlikely it is to be stockpiled.
As for Alberta's other major agricultural export to the U.S., canola, Dade expects the tariffs to have a direct and proportional effect on the price canola producers are getting, worsening a difficult situation for canola producers who have already been feeling a high cost of production.
Some farmers may look to grow a wider variety of crops that won't be hit as hard by the new reality of U.S. tariffs, but there isn't much time available for producers to make these decisions.
"Spring planting is right around the corner and folks have got to make decisions fairly quickly," Dade said.
The effect of tariffs is especially difficult for farmers and ranchers because their industry relies on rules-based, predictable trade, said Roger Chevraux, a canola farmer in Killam, Alta.
"It's better to have an understanding of what we're dealing with and the U.S. is our number one customer, in canola in particular," Chevraux said.
Like cattle, Canadian canola production is heavily integrated with the U.S., which was its leading export market at $8.6 billion in 2023. The U.S. is also the leading export destination for Canadian canola oil and meal.
As disappointing as the U.S. tariff announcement was for Chevraux, it also surprised him, due to how American consumers have been upset for years with inflation raising the cost of groceries.
"Anytime you start having a tariff on food, it isn't good for the American consumer at all," Chevraux said. "I can't see how this is a good thing for them to have an increase in food cost."
With Canada announcing it would introduce retaliatory tariffs on Saturday night, the resulting trade war could result in higher food prices for consumers in both countries.
Those retaliatory tariffs are equally concerning for Harpe, who pointed out that it will hurt farmers across the province who rely on buying fertilizer, tractors, combines and other necessary products from the U.S. for their businesses.
"Nobody wins in a tariff situation," Harpe said.
"Whether it's us trying to sell goods in the United States or whether it's the consumers in the United States because their food is going to start rising as well. I think everybody realizes this is a no-win for everybody."
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