Despite a few squawks about the potential impact of Donald Trump’s promised 25-per-cent tariff on All Things Canadian, at least in its public statements Alberta’s cattle industry has been surprisingly upbeat.
Ho-hum, we’ve heard it all before seems to be a typical reaction from cattle industry organizations, cheerfully repeated by the media.
Perhaps that’s because many in the beef industry (and I use that term advisedly) share Mr. Trump’s MAGA worldview and just can’t believe that once’s he’s sworn in on Jan. 20 as U.S. president he would adopt a policy obviously not in his country’s interest.
There might be some merit in that view, of course. Still, Mr. Trump being Mr. Trump, no one should bet the farm on it!
There’s also this to justify their optimism, I guess … MAGA politicians on either side of the World’s Longest Undefended Border don’t have a particularly good record for keeping their promises when the wishes of their gullible supporters conflict with those of their deep-pocketed corporate backers.
Just look at Mr. Trump’s shifting position on immigration now that a couple of his favourite tech-bro billionaires have expressed their contempt for the American working class, or the Alberta United Conservative Party’s transparent greenwashing to push open-pit coal mining on the Eastern Slopes of the Rockies, never mind the legitimate concerns of their cattle-raising supporters downstream from the proposed coalmine.
Or maybe it’s because they imagine that once Conservative Pierre Poilievre is Canada’s prime minister he’ll do better dealing with Mr. Trump than Liberal Prime Minister Justin Trudeau – although that seems unlikely given the next U.S. president’s zero-sum approach to negotiations, whether or not the Conservative leader toes his ideological line.
Regardless, while we all ought to be worried, folks working in Alberta’s cattle industry should be more worried than most.
And that most includes their neighbours who raise grain and not beef for American plates. After all, close to 80 per cent of Canada’s fed cattle come from Alberta, and nearly 90 per cent of Alberta’s beef meat exports and 100 per cent of its cattle exports go straight across the 49th Parallel.
So Alberta’s beef producers really could live or die by the whims of Donald Trump.
As for grain farmers, they’ve got their worries, but the United States isn’t a big enough market for Canadian grain for Mr. Trump’s promised tariffs to wreak havoc.
According to the Canadian Grain Commission, in 2023-24, Canada exported more than 43 million metric tonnes of all kinds of grain, but less than three million metric tonnes of that went to the United States.
The biggest buyer of Canadian grain – at just over 12 million metric tonnes – was China, which imports Canadian wheat, barley, and canola.
This suggests, by the way, that we ought to be careful about slapping huge tariffs on Chinese electric vehicles and solar panels to suit the departing Biden Administration when we’re at risk of getting economically hammered by the incoming Trump Administration! Remember, at the moment we manufacture no EVs and very few solar panels, so we have no Canadian industry to protect.
By the way, what has depressed Prairie grain prices was the loss of the Canadian Wheat Board, dissolved by the Harper Conservative Government in 2015 with its assets sold off to Saudi Arabia for a song.
Back in the day, the CWB sold Canadian grain in U.S. dollars, a windfall for Canadian farmers. Nowadays the extra value created by the weak Loonie is being pocketed by multinational corporations. And Alberta farmers are hit again when they buy U.S.-made farm equipment made more expensive by the exchange rate. The CWB’s demise, however, will have to be a scandal for another day.
What this means right now is that while Trump’s tariffs could impact some grain producers’ bottom lines, they’re not going to immiserate Prairie grain farmers.
Tariffs on Canadian beef, though, really would be a disaster for Canadians in that business because cattle move back and forth across the U.S.-Canadian border a lot more than grain.
Alberta’s so-called free market has already driven many Alberta cow/calf producers out of business over the past 15 years. That happened because just two foreign-owned packing plants have roughly 90 per cent of the province’s slaughter capacity, so they effectively control the price for fat cattle from feedlots. This in turn impacts the price for Alberta calves.
Having a duopoly on beef packing in Alberta means Brazil-based JBS in Brooks and U.S.-based Cargill in High River effectively have a captive supply of cattle for slaughter that are fattened up on subsidized U.S. corn imported to Feedlot Alley in southern Alberta.
Moreover, instead of fattening just Alberta-grown calves, Alberta feedlots import calves from the States to be fattened here and slaughtered by Cargill’s and JBS’s plants. Then the beef they box goes back across the border to the United States.
As for the Alberta cattle fattened on the large volumes of subsidized feed corn imported from the United States, some of those animals are also sent back across the border to be slaughtered in U.S. plants.
There’s far more to this complicated relationship, of course, including the negative impact of that subsidized U.S. corn on the price of Canadian feed barley, but it should be pretty obvious how a 25-per-cent U.S. tariff on Canadian beef exported to the United States on the hoof or in a box would damage this complicated integrated relationship.
I suppose Ottawa could slap retaliatory tariffs on U.S. corn and U.S. calves entering Canada – bringing better prices for both Alberta grain farmers and Alberta cattle producers. But don’t count on either a Liberal or Conservative government in Ottawa having the courage to do that.
As for prices on the grocery shelves, Cargill and JBS have the wherewithal to squeeze profits out of meat retailers as well, and we all know who ends up paying for that.
Well, this is what happens when any industry in a place like Alberta is allowed to become a branch plant with a single customer – especially when the big boss is ends up being someone like Donald Trump.
It’s not like we weren’t warned at almost every step of the way.
Trump’s talk of tariffs, oddly aimed at Canada, rather than say China with which the US trade balance is much worse, has definitely rattled many Canadians who are used to our US neighbours being more pleasant with us. Of course, Trump doesn’t do pleasant much, its not his style, bluster is. Though talk is cheap and lest we forget Trump was the guy who was going to built the wall and make Mexico pay for it which now is seldom mentioned because Trump has done and said so many provocative and outlandish things since then it is nearly forgotten.
Sadly Ontario Premier Ford seems to be the only one standing up for Canada while the PM tries to molify Trump, the opposition leader and Smith cheers him on and the rest of the country trembles in fear. Will someone else here please grow a backbone and stand up for Canada?
I doubt a change in PM will help much without a change in attitude.
PM is attempting to molify tRump? examples.
Having these foreign plants in Canada is not in our best interest, but some one is making money, its just not the consumers. Getting rid of the Wheat Board, never understood that, beyond it was one of those Harper decisions which wasn’t good for most of us. Of course if people are so keen to elect Conservatives and PP, we can see more of the same.
I’m sure Trump is going to do what is best for him and his financial supporters and they don’t care about Canada, unless it is going to make them money. Canadians might want to start having a good look at what could be our new reality if Trump proceeds with his plans. About all we can hope for, is the two branches, MAGA and billionaire techies go at each other with such force trump has to spend most of his time dealing with that.
What Canada needs to do, is if the Americans impose 25% tariffs, we ought to do something similar. Many will say that will have a negative impact on the economy, etc, yada yada yada…. However, if we do not retaliate we can look forward to trump doing more to our disadvantage.
Your suggestion regarding Canada imposing tariffs on American corn and cattle, sounds fine to me. if the Conservatives and Liberals don’t have the “balls/ovaries” to do it, perhaps prior to an election they need to be asked some questions. They may not want to answer, but if the same question is asked over and over, eventually you get an answer, even if it is, we won’t answer. That in turn tells us, they aren’t going to protect Canadians. The U.S.A. is not Canada’s friend. Never has been, never will be. We are convenient, safe, etc. If Canadians want to continue to be Canadians we might want to start getting with an agenda which favours Canada. I’m sure trump has some grand plans for the world, but it is up to us to ensure what ever plans he makes, do not negatively impact Canada.
Perhaps. Perhaps it’s because of the reasons you suggest.
Perhaps, too, it’s because these people have none of very little education or experience in actual thinking through even a simple multi-step circumstance, let alone anything as complex as a free market or cross – border trade.
No, it’s far easier and much more satisfying to just go with the emotional wave felt at any particular moment. And when a bunch of them have the same feeling at the same time; well, it just feels like thinking. No need to complicate it any further.
These people have no personal agency or control over their own lives, despite all the mouth-noises they make about exactly that. Eliminating the CWB is prima facie evidence of that. So is the coal mine graft and corruption going on in plain site. To say nothing of despicable dani’s UCP criminal enterprise.
Maybe ship live cows to Japan? Oh right. Ummm, carry on.
Our farm produces hay entirely for the cattle industry and can be included along with grain producers that would be affected by the proposed 25% tariffs. Would DS throw farmers and ranchers under the bus by to keep the oil flowing tariff free? Surely energy exports to the USA, as in oil from the west and electricity from the east, could be Canada’s trump card. At least Doug Ford sees the leverage Canada has in its energy exports to the USA.
The capacity of some voters – like Alberta and Saskatchewan grain farmers – to vote against their own economic interests is mind-boggling. The HarperCons didn’t abolish the Wheat Board of their own accord – they did it at the behest of grain farmers in their own Prairie base themselves. (I’m sure it’s more complicated than that, and I know a former activist with the National Farmers’ Union who could probably set me straight if I sat down with him over a coffee, but that’s the top-line story as I understand it).
Jerry: Some voters do vote against their own interests, but prairie grain farmers, not so much. In response to the Alberta government identifying the CWB as “a regulatory impediment to cattle feeding,” the Liberals held a plebiscite on removing barley from the CWB. Just under 70% of grain farmers voted to keep the CWB. In the 11 years prairie farmers voted for CWB directors, a very comfortable two-thirds of the votes, including those from Alberta, went to candidates who supported the collective bargaining responsibilities of the Wheat Board.
But then they, along with most other Alberta & Saskatchewan voters, voted en masse for the HarperCons, who had a stated intention to abolish the Wheat Board regardless of any producer plebiscites. So, again, they voted against their own economic interests, not in those plebiscites but in the general elections, which is after all how we choose our governments.
During the election where Harper secured his majority government, his Ag Minister assured prairie farm meetings that no action would be taken without a farmer vote on ending the CWB. When Harper won a majority, that undertaking was ignored.
Does anyone remember a few years ago when certain Canadian grocers were restricting meat purchases at the till? Coincidentally, this happened when meat processing was suffering due to Covid among workers. It seemed that meat processors with American plants were shipping Canadian product across the border so that consumers in the U.S. would not suffer from shortages, but who knows?
The U.S. does what is best for the U.S. If this means effectively shutting down Canadian meat processing plants with tariffs in order to boost production on their side of the border, that is what they will do. Many of the workers in these plants are immigrants, who apparently could be deported under Trump, so we’ll have to wait and see how this will pan out. If they deport the workers that this industry relies on, wouldn’t it be better to import meat from Canada? This would allow them to make “good” on mass deportations, while ensuring the meat supply through imports.
Remember also when the border at Coutts was shut down on the Canadian side in 2022, stopping the export of livestock and beef?
https://calgaryherald.com/business/local-business/cattle-industry-calls-for-an-end-to-the-coutts-blockade
It’s hard to know what the Coutts border blockade was really about at its core. We don’t know the backgrounds and financial investments of all the people involved or the deeper connections, if any, to outside interests and influence. It would be really wild if the people whose actions restricted the flow of beef across the border were beef farmers!
Surely analysts on both sides of the border in the meat industry learned something from the worker shortages at meat processing plants due to Covid and the fallout of the border restrictions during the Coutts blockade on feed, livestock and frozen beef. This knowledge will be put to use during whatever lies ahead.
Perhaps the Alberta premier will ask, “Where’s the beef?” when she’s in Washington to fête the inauguration of Donald Trump. Nah, Alberta is a one-trick pony: oil and gas.
I don’t pay that much attention to the US media so I may not have heard or read anything about US reactions to Trump’s proposed 25% tariffs on imports from Canada and Mexico but it is hard to believe Americans, particularly business people are sanguine about them. We in Canada, and I imagine in Mexico, are somewhat panic-stricken by the prospect of drastically reduced exports.
I wonder how US businesses are going to react to 25% increases in raw materials. Figures from 2023 say that the USA imports a bit over US$11 billion of aluminum from Canada. I have to wonder just how Anheuser-Busch or Coca-Cola will react to that large jump in one of their major raw materials.
I think we could probably say the same for for wood products at 11.5 billion US dollars or the real kicker, gas and oil products at products at 128.5 billion dollars US.
An interesting item, though relatively a low amount item, is fertilizer. We export about 4.6 billion dollars US a year. From the US’s point of view, the problem is that with the current little dispute with the Russian Federation, There is almost certainly no alternative supply available. I’m not sure what this can do to crop outputs but it’s not going to be good.
I’m not sure how much of our oil goes to provide gasoline for the USA everything for export, but if much of it does, this could herald a nasty little jump in gasoline prices. Given how panicky Joe Biden seems to have behaved every time there was a spike in order gasoline prices, I don’t think Donald Trump really wants to do start off his presidency with people screaming about gasoline prices.
Something we learned during the COVID-19 pandemic is that supply chains are relatively fragile. It’s easy enough to say that these proposed tariffs and have a terrible effect on the Canadian economy and the Mexican economy, but it’s not going to do the American economy what’s good either.
At least in the short run, probably about the length of Donald Trump’s tenure, it’s going to be frustratingly hard to establish new supply chains to replace Canadian and Mexican ones, even if it can be done for reasonable cost. Certainly there is no way that the USA can find an source for oil and gas products anything like the same cost. Pipelines are just a lot cheaper than shipping.
I have not looked at the Mexican figures particularly closely but one thing I was thinking of was that Mexico exports about 25 billion US in various fruits, vegetables, and beverages. This is not a very large amount compared to other export items but these are the ones that will hit the consumer directly when they go to the grocery store or buy bottle of tequila.
I’m reminded the old joke that if you owe your bank $100,000 and you have a problem; if you go to the bank a hundred million dollars then the bank has a problem. Trump May have something like this on his hands. A few sorts of tariffs that are affecting huge numbers of people or huge numbers of Industries maybe annoying but not a serious problem. Massive cost increases more or less across the entire economy maybe Trump’s problem.
Stupid Cut & Paste Error
A few sorts of tariffs that are affecting huge numbers of people or huge numbers of Industries maybe annoying but not a serious problem.
should read
A few sorts of tariffs that are affecting small numbers of people or small numbers of Industries may be annoying but not a serious problem.
“It’s not like we weren’t warned at almost every step of the way.” Exactly correct, this was predicted back in the late 80’s when the US-Canada Free Trade Agreement was introduced but especially with the North American Free Trade Agreement (NAFTA) in 1994. It was obvious to everyone at the time that this inextricably tied us to the elephant next door but everyone thought this was a great idea. “Great Market”, “Fantastic Opportunities”, and my favourite “Our Cousins Next Door.” Well some of us understood then and some of us are now finding out that our cousins next door don’t give a crap about us or anyone else. And it wouldn’t matter if they did because the Capitalist system is going to take advantage of us regardless of what our US cousins think.
Canada should be trading with the US and the other countries in our hemisphere but we should also have developed our natural trading partners like China, India etc – huge markets and producers. But we tied ourselves to the US, set those other markets as “evil regimes”, and now the US can put the boots to us and we have nowhere to go. DJC makes an important point no one seems to care about – how stupid is it to put tariffs on China’s EVs and solar panels to protect an industry we don’t have and never will? This is just to protect US industry. Well last I looked we were a supposed sovereign country so what we need to do is develop other relationships, starting 20 years ago.
But I’m doubtful we will even try, if we did the US would really press down on us and make us pay – look at what the US has done to Europe – but in the long run it’s what we need to do. Grain is a good example, think about the markets for beef and pork on the other side of the Pacific and the empty containers going there.
What else – much of US agriculture is facing an over-supply problem so what could that foretell? How about an agri-version of the US who after killing the EU continental energy supply (and blowing up Nordstream for good measure) now is demanding that Europe buy their over-priced LNG or face tariffs. US over-supply is a direct result of aggressive govt subsidies – if the US does this it’s good, anyone else it’s bad.
I would bet that almost all Alberta a grain farmers, and every single living Alberta rancher, have voted for conservative parties in every election since the province was admitted to Confederation. They were worried every step of the way, and they voted for this outcome every step of the way. I don’t care what happens to them.
Unfortunately this isn’t about them getting their just deserts, it’s about the rest of us getting screwed by their shitty low information voting habits.
Truly, but at least they may get their just deserts while the rest of us are screwed. As I keep saying in other related contexts, that’s the only consolation we are liable to get. We may as well enjoy it.
This.
Danielle Smith is all hat and no cattle. This is going to cause inflation to go up even more, and Danielle Smith doesn’t see that.
So true. You have only one customer, you are a price taker, not a price maker. Any teenager taking an economics class could tell you that. What is it with these Conservative Prime Ministers? Diefenbaker dismantled the AVRO Arrow, Harper gave away the Wheat Board and Mulroney made Canada nothing more than a vassal state to the U.S. and our new vassal overlord will not be as benign as the last. Why do we keep electing Conservative Governments that appear to hate this country?
I just cannot understand how a country like ours is an industry branch to the Brazilians and Americans.