Tariffs haven’t affected Canada’s grain market storage sector yet, but market uncertainty is influencing producers’ expansion decisions.
Farmtario asked grain storage and bin manufacturers at the London Farm Show about what producers are thinking about storing and handling grain right now.
“People are hanging on (to grain) and maybe making marketing decisions that allow them to ship the grain rather than store it and expand right now, but it depends on the customer,” said Wayne Brubacher, Horst Systems Ltd.’s director of sales and service. “Grain storage makes sense. There’s an opportunity in the carry to capture that (margin), but you can’t capture it if you don’t have the bin.”
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Why it matters: Market uncertainty spurred by Trump’s monthly tariff threats and reversals, combined with years of rising interest rates, skyrocketing input costs and a drop in commodity prices, has seen many farms shift into survival mode.
When asked what advice he’d give a producer, Brubacher advised each operation calculate its crop drying, storage and shipping costs to market, tariff or not, and weigh it against having an on-farm system.
“You still have to handle that crop,” he said.
Natural gas and propane remain the most efficient grain drying options, although research into electric and biomass dryers is ongoing. Brubacher stated that in recent years, there has been a trend toward forgoing “extra” purchases for bins to make storage expansion more affordable. However, monitoring grain quality is essential, and technological advances help keep it within reach.
“We design systems specific to the person’s needs, and then you look at those things,” he advised. “If it doesn’t pay back, then you shouldn’t be doing it.”
Neil Loewen, owner of Total Grain Systems in Dresden, said tariffs were on the minds of London Farm Show visitors, who asked who manufactured his material.
He stated that approximately 95 per cent of his sources are Canadian, which is unique in Ontario’s storage sector. He added that Canadians won’t be left unscathed by the tariff war but hopes the Buy Canadian movement will assist companies like his.
“We know we will be affected by tariffs, but I think that the Canadian-based companies, such as myself, with Canadian-based products, will be less affected by tariffs than those out of the U.S.,” he said. “We’re hoping this tariff war will help the Canadian economy.”
Loewen’s suppliers with a U.S. client base could implement a blanket customer price increase to ensure the brunt of the economic tariff impacts is carried evenly across the border.
If U.S. companies flood the market with cheaper options, they would likely win the storage-war bid. Still, Loewen isn’t sure the American economy is strong enough to support lower prices, especially given the agriculture manufacturing sector’s thin margins, regardless of border side.
“It’s not the oil and gas (industry. Unless the government throws subsidies at the American manufacturers, there’s no room for American companies to push product or dump steel into the Canadian market because the margins are already tight.”
