Why it matters: China’s tariffs on Canadian canola seed, which may effectively shut the door to that market, could put pressure on cash flow and operations for farmers and agribusiness.

The federal crown lender announced Aug. 19 that its decision comes after continued global trade disruption, including new Chinese tariffs on canola seed.

Chief executive officer Justine Hendricks said the uncertainty creates real pressure on cash flow and operations for farms, agribusinesses and food processors.

“Our role is to ensure our customers, and the broader industry, have access to the capital and flexibility they need to adapt, stay competitive and keep delivering high-quality products to markets at home and abroad,” she said.

Existing customers and new clients who meet the lending criteria are eligible for the additional help. This includes access to an additional credit line of up to $500,000 and new term loans. Existing customers may defer principal payments for up to 12 months on their loans.

FCC said it will continue to work with industry partners to navigate changing market conditions.

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The company warned that full-year 2025 earnings would drop to the lowest since 2020 after a weak first half and amid ongoing challenges in global trade.

U.S.-based ADM is bracing for an impact from President Donald Trump’s sweeping tariffs on most imports, as well as any trade retaliation which often targets agricultural products.

ADM and agribusiness peers including Bunge and Cargill have seen profits erode in recent quarters due to ample global crop supplies and thinning margins. The U.S. president’s tariff threats and shifting deadlines for duties have fueled further chaos for global grains merchants like ADM.

U.S. biofuel policy uncertainty dented demand for green energy feedstocks like corn and soybean oil, although ADM said proposed increases for biofuel blending in the U.S. should be supportive from the fourth quarter and beyond.

ADM said it expected adjusted annual earnings at about US$4.00 share in 2025, compared with previous guidance of between $4.00 and $4.75 per share and the weakest in five years.

Profit from Ag Services & Oilseeds, the company’s largest segment, slumped seven per cent to $113 million (C$155.7 million) in the reported quarter driven by lower margins. The division houses the company’s global crop trading, transportation and storage, and oilseed processing operations.

Profit in its grain origination and crushing business, which sources grains from growers and processes them for food, animal feed and other uses, fell seven per cent to $33 million (C$45.5 million).

Chicago-based ADM reported adjusted net earnings of $452 million (C$623.1 million), or 93 cents per share, for the quarter ended June 30, down from $508 million, or $1.03 per share, a year ago. Analysts, on average, expected earnings per share of 83 cents, according to data compiled by LSEG.

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“This trip is about promoting these products, advancing trade discussions, and building relationships that will create new opportunities for our hardworking producers back home,” MacDonald said in a July 28 news release.

While in the region, MacDonald will meet with senior government government officials, local and Canadian business leaders and other stakeholders. The minister leaves this week and will be in the Indo-Pacific for about a week, a spokesperson for his office said.

The Indo-Pacific is the world’s fastest growing region and home to six of Canada’s top 13 trading partners, the release said.

Canada opened an Indo-Pacific trade office in Manila, Philippines in early 2024 as part of a plan to increase Canadian agri-food exports to the region.

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The trade deficit in May met expectations at C$5.9 billion, down from a downwardly revised C$7.6 billion in the prior month, Statistics Canada said. Exports increased by 1.1 per cent on a monthly basis after an 11 per cent slump in April.

This was the first increase in exports in four months, StatCan said, and was driven by record exports to the rest of the world, excluding the U.S.

“The biggest takeaway I see from the data is just diversification,” said Prince Owusu, senior economist with Export Development Canada.

“While we continue to bleed in the U.S., we are basically diverting trade to other markets,” he said.

Trade with U.S. at lowest levels since 2020

The share of the exports and imports with the U.S. dropped to their lowest levels in May, barring the pandemic year of 2020.

Exports to the U.S., Canada’s biggest trading partner, fell for the fourth month in a row with May registering a drop of 0.9 per cent.

In volume terms total exports were up 0.7 per cent in May.

President Donald Trump has imposed 25 per cent tariffs on imports of Canada-made automobiles and 50 per cent tariffs on imports of steel and aluminum. Canada has also imposed retaliatory tariffs.

This trade skirmish between the two countries whose bilateral trade surpassed a trillion Canadian dollars last year has depleted Canada’s exports and has hit the job market.

Canada’s Prime Minister Mark Carney and Trump are aiming to reach some form of a trade deal by July 21.

Canada’s total exports for May were C$60.81 billion, up from C$60.12 billion in April, StatCan said.

This category increased by 15.1 per cent, driven mainly by exports of unwrought gold that were up 30.1 per cent to reach a record $5.9 billion.

“Most of the rise was attributable to higher physical shipments of gold to the United Kingdom,” the statistics agency said. Excluding metal and non-metallic mineral products, total exports were down 1.2 per cent, it added.

Canada looking for trade diversification

As trade with the U.S. has dropped, Canadian companies have been scouting for opportunities to increase trade with rest of the world.

Exports to countries other than the United States rose 5.7 per cent in May to reach a record high, StatCan said, but it was not enough to fully mitigate the impact of lost exports to the U.S., as well as China due to a drop in canola and crude oil shipments.

Total imports dropped by 1.6 per cent to C$66.66 billion, with imports from the U.S. falling by 1.2 per cent in May.

The Canadian dollar slightly weakened after the trade data and was trading down 0.23 per cent to 1.3615 to the U.S. dollar. Yields on the two-year government bonds were up 3.7 basis points to 2.706 per cent.

The deficit in May, albeit narrower than the prior month, is still among the highest seen historically and economists said that two months of decline will pull down the second quarter GDP.

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Why it matters: The rise and fall of the biofuel sector has major implications for Canadian canola, already beleaguered by tariffs and trade tensions

The splintering relationship between the North American neighbors could upend a multi-year biofuel industry boom that has provided farmers growing demand for their crops as fuel makers have soaked up record volumes of vegetable oils.

Trump’s wavering approach to tariffs is rippling down to processors on both sides of the border, who crush oilseeds into meal and oil, and to farmers, who are finalizing their spring planting plans.

Processing capacity threatened

While new U.S. tariffs are threatening to make imported feedstocks unaffordable, uncertainty over U.S. biofuel subsidy programs, including a Biden-era tax credit that determines how much producers pay for the oils and fats they make into biofuel, is further hobbling the industry.

The contraction of the green fuels sector could also hurt rural communities and efforts to decarbonize the economy, experts said.

“If this uncertainty drags on, which is what we expect, the biodiesel and renewable diesel industry will contract but not disappear. It will shrink, painfully at times,” said Paul Niznik, director of energy at Capstone LLC in Houston.

Citing uncertainty and rising costs, Federated Co-operatives Limited has shelved a renewable diesel and canola processing plant project in Saskatchewan, one of five projects slated to expand Canada’s canola crush by 60 per cent over five years.

In the U.S., a biodiesel plant in Iowa was idled in late December and others have slowed production, resulting in the lowest output of the fuel in five years. In January, renewable diesel production fell 17 per cent from the 2024 monthly average, according to Environmental Protection Agency data.

Glut of renewable fuel

U.S. capacity to produce biodiesel and renewable diesel, two chemically unique fuels made from animal fats and vegetable oils like canola and soy, has grown around 60 per cent since 2022, government data shows, spurred by federal policy to lower greenhouse gas emissions and reduce reliance on foreign oil. The United States is the world’s largest producer and consumer of biofuels.

U.S. soybean crush capacity increased 10 per cent in that time as grain giants like Archer-Daniels-Midland and Bunge raced to meet growing demand.

Record oilseed processing margins helped the two companies, which operate half of Canada’s canola plants and represent nearly 40 per cent of U.S. soy crush capacity, turn in their best ever profits in 2022 and 2023.

Now, there is a glut of diesel made from non-fossil sources and both ADM and Bunge have warned that 2025 earnings could sink to the lowest in six years due to the uncertainty.

U.S. turmoil

Canada dodged a February tariffs deadline only to see Trump impose 25 per cent duties on imports on March 4. Two days later, levies on some products were paused until April 2.

“Just how do you set a price when you don’t know if you’re going to be wrong a day later, a month later, six months later?” said Capstone’s Niznik.

Meanwhile, Trump’s administration has yet to provide clarity on clean fuel tax credits.

Former U.S. President Joe Biden transformed U.S. biofuels policy in his signature Inflation Reduction Act, moving from a flat $1 per gallon blenders credit for biomass-based diesel to a variable producers credit based on the carbon intensity of feedstocks.

Biden, however, left office without finalizing guidance about how the policy, known as 45Z, would be implemented. Now, it is unclear whether those rules will take effect at all, industry sources said.

That uncertainty is the main reason Western Dubuque Biodiesel, a million-gallon-per-year biodiesel plant in Farley, Iowa, has been idled since late December, its lengthiest downtime since 2010, according to General Manager Tom Brooks.

“If I were to run today, I lose 46 cents a gallon under 45Z. Under that previous credit, I would have made 15 to 20 cents a gallon,” Brooks said.

The industry is also urging the Trump administration to increase biofuel volumes under the Renewable Fuel Standard, another crucial source of government support for producers.

Under existing RFS volume mandates set to expire this year, the amount of biodiesel and renewable diesel production backed by the RFS is only 3.35 billion gallons annually, well below the industry’s capacity of around 5 billion.

The EPA, which administers the RFS, did not respond to a request for comment.

Risks on the farm

Canada shipped $6.02 billion in canola and canola products to the U.S. in 2023, including $4.37 billion in oil. Those products, and any Canadian-produced biofuel, face 25 per cent tariffs starting April 2.

“Given the risk, prices are going to drop. Shipments are going to slow. Long-term contracts are going to get very, very tenuous,” said Rick White, president and CEO of the Canadian Canola Growers Association.

Analysts say the uncertain future has already depressed canola prices by up to $100 per metric ton.

U.S. soybean growers are also expected to slash plantings this spring amid a supply glut and tepid demand, with crush margins down almost 60 per cent from a year ago.

Kody Blois, Canada’s new agriculture minister, said on Monday that he was working with Prime Minister Mark Carney to create more demand in Canada.

Meanwhile, Alberta farmer Andre Harpe still has canola from the 2024 harvest.

“Right now we don’t know if we should be selling or holding or dumping,” Harpe said.

Farmers can alter what they plant this spring, but for a giant crushing plant built to feed what had been a growing market for vegetable oils, adaptation is no easy thing.

“Not knowing what your biggest market is going to do tomorrow is frustrating, to say the least,” Canadian Oilseed Processors Association Executive Director Chris Vervaet said.

—Additional reporting by Stephanie Kelly and Jarrett Renshaw

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The renewals are a relief to U.S. farmers and meat companies as they navigate trade disputes with major agricultural importers, including China and Canada, under President Donald Trump.

Why it matters: Both the U.S. and China have been major markets for Canadian meat exports

China is understood to have renewed for five years registrations for U.S. pork and poultry facilities that expired in February and over the weekend, according to the U.S. Meat Export Federation and the USA Poultry and Egg Export Council. Both groups said that U.S. beef facilities had not yet been renewed.

Shipments continued to clear customs from facilities with lapsed registrations, but U.S. exporters were unsure how long that would last.

“We were on pins and needles for a while,” said Greg Tyler, CEO of the USA Poultry and Egg Export Council.

Beijing requires food exporters to register with customs to sell products in China.

China’s customs website showedregistrations for more than 1,000 U.S. meat plants granted by China under the 2020 “Phase 1” trade deal lapsed on Sunday. That was roughly two-thirds of all those registered.

The trade deal ended the previous U.S.-China trade war with a pledge from Beijing to boost its purchases of U.S. goods and services, including meat, by $200 billion (C$285.7 billion) over two years. China did not reach the target, which was agreed shortly before the COVID-19 pandemic hit.

The U.S. Department of Agriculture did not immediately respond to a request for comment. The agency previously said China did not respond to repeated requests to renew plant registrations, potentially violating the Phase 1 agreement.

“We’re pleased to see progress on the pork facilities and hoping for similar news on beef as soon as possible,” said Joe Schuele, spokesman for the U.S. Meat Export Federation.

Beijing imposed retaliatory tariffs on some $21 billion (C$30 billion) worth of American farm goods this month, including 10 per cent duties on U.S. pork, beef and dairy.

In 2024, the U.S. was China’s third-largest meat supplier by volume, trailing Brazil and Argentina and accounting for nine per cent of China’s total meat imports. U.S. meat shipments to China reached $2.5 billion (C$3.6 billion) last year, making it the second largest exporter by value.

Exports of U.S. poultry products have suffered due to outbreaks of bird flu, but China remains an important market, Tyler said.

“We needed that market to stay open and these renewals were very important to that,” he said.

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Why it matters: Canadian farmers have been caught in a trade war crossfire in recent months

U.S. President Donald Trump threatened on Thursday to slap a 200 per cent tariff on wine, cognac and other alcohol imports from Europe, opening a new front in a global trade war that has roiled financial markets and raised recession fears.

Rubio said the United States would retaliate against nations that had imposed tariffs on it.

“This is global. It’s not against Canada, it’s not against Mexico, it’s not against the EU, it’s everybody,” he told the CBS show “Face the Nation.”

“And then, from that new baseline of fairness and reciprocity, we will engage – potentially – in bilateral negotiations with countries around the world on new trade arrangements that make sense for both sides,” he continued.

Rubio, who did not give details of what the new deals could look like, said the United States would “reset the baseline” to ensure it was treated fairly.

“We don’t like the status quo. We are going to set a new status quo, and then we can negotiate something, if they (other nations) want to,” he said. “What we have now cannot continue.”

— Reporting by David Ljunggren

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In Food First: How Agriculture Can Lead a New Era for Canadian Exports, RBC outlines a plan to expand Canada’s global market share by 30 per cent and create $44 billion in new agri-food exports by 2035.

Canada has seen many benefits of the U.S.’s priority access to production and processing, the report said. But the industry has become overly reliant on Canada’s southern neighbours as an export market, which is concerning given the ongoing threat of tariffs from Canada’s largest trade partner.

Canada accounts for 20 per cent of U.S. agri-food imports, but if large-scale tariffs are applied to agriculture and agri-food products, it would make Canada a less desirable trade partner to the U.S.

“With rising trade uncertainty and escalating tariffs in North America, Canada must accelerate efforts to diversify its trading partners, particularly in Southeast Asia, Africa, and the Middle East,” said report author Lisa Ashton, RBC Thought Leadership’s agriculture policy lead.

“In terms of diversification opportunities … maintaining the U.S. relationship is critical,” Ashton told Glacier FarmMedia in an interview.

“Speaking to the horticultural industry and the fruit and veg industry, even today, that are growing out of greenhouses and in field, they really need cold chain access that it can get to the grocery shelves,” she continued. “The US. market will continue to be very important for those types of sectors.”

At the same time, Canada’s global competitiveness has also slipped, dropping its seventh place from fifth on the global export leaderboards. Much of this competition has come from Brazil and Chile, which have both taken large chunks of the market in meat and fish, where Canada has been competitive globally in the past.

“Canada’s market share since 2000 has declined, relatively, by 12%,” the report said. “Our exports are still growing—they’ve quadrupled during that time. It’s just that we’re not keeping pace with the rest of the world, which saw agriculture and agri-food exports grow five-fold over the same period.”

The report recommends three objectives by which Canada can grow its exports: taking advantage of what we have, taking on growth markets and strengthen current partnerships.

Canada has 18 free trade agreements in place, which provide access to more than two-thirds of the global economy. The report shows that if Canada can use those agreements to make better use of market access to Europe, Asia and Latin America, it could grow its share of the global export pie.

Taking on new growth markets requires exploring more global trade partners — particularly in south and Southeast Asia. One of the clearest growth opportunities – especially in plant-based proteins like peas, lentils and soybeans – will be India, the report said. That market of 1.5 billion people is seeing a rapid growth in economy and standard of living.

Strengthening and growing current partnerships relies on Canada taking advantage of food trade deficits projected for countries like Japan, China and the U.S. in the next decade.

“Driving production and processing in these domains will help position Canada as a strategic as well as a reliable partner, if we can make some of the investments we’ll outline in the following sections,” the report read.

The findings of the report included five keys to unlocking Canada’s export potential:

• Innovation: Accelerate the adoption of precision farming and food processing technologies to increase productivity and efficiency.
• Capital: Scale up agri-food processing clusters to add value to raw commodities and expand Canada’s footprint in global markets.
• Digital access: Close the 5G and high-speed internet gap in rural Canada to unlock the full potential of digital agriculture.
• Export Infrastructure: Modernize ports, logistics, and transportation networks to reduce bottlenecks and improve export reliability.
• Global marketing: Strengthen market development efforts and regulatory alignment in high-growth regions like Southeast Asia, Africa, and Latin America.

The growth necessary to see Canada return to the world’s fifth-largest agriculture and agri-food exporter would require a 50 per cent expansion in value-added agri-food exports and a ten per cent increase in agriculture commodity exports.

“Canada has long been one of the world’s leading food producers,” said John Stackhouse, senior vice president of RBC’s office of the CEO.

“We have an opportunity to turn agriculture into a driving force for trade diversification and if we act now, we can ensure Canadian farmers, processors, and exporters are well-positioned to lead the global food economy rather than losing ground to competitors.”

—With files from Jonah Grignon

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“The tariffs are going forward on time, on schedule,” Trump told a joint news conference with French President Emmanuel Macron. He had been asked whether Canada and Mexico had done enough to avoid the punishing 25 per cent U.S. duties.

Many had hoped the top two U.S. trading partners could persuade Trump’s administration to further delay tariffs that would apply to over $918 billion worth of U.S. imports from the two countries, from autos to energy. This could wreak havoc on the integrated North American economy, with the automotive sector hit particularly hard.

Trump did not specifically mention the March 4 deadline. He later referred to his desire for “reciprocal” tariffs to match the duty rates and offset the trade barriers of all countries, including France.

Trump and Macron did not publicly discuss another sticking point – digital services taxes imposed by France, Canada and other countries aimed at dominant U.S. tech giants including Google, Facebook and Amazon.

On Friday, Trump ordered his administration to revive tariff investigations into countries that levy digital service taxes on U.S. firms.

Border hopes dimmed

Canada and Mexico have taken steps to beef up border security, which bought them about a month’s reprieve from Trump’s earlier Feb. 1 deadline to impose the tariffs, based on a national emergency declaration.

Any further delay negotiated ahead of the deadline will keep the tariff threat in place at least until clear evidence emerges that Canadian and Mexican measures are working, said Dan Ujczo, a lawyer specializing in U.S.-Canada trade matters.

“There’s progress being made on the security front,” said Ujczo, senior counsel with Thompson Hine in Columbus, Ohio. “But it’s overly optimistic to think that those tariffs would be fully rescinded.”

The White House, U.S. Trade Representative’s office and Commerce Department did not respond to requests for comment on negotiations expected this week ahead of the March 4 deadline.

More tariff threats

Since Trump’s initial 25 per cent tariff threat and imposition of a 10 per cent duty on all Chinese imports, he has heaped on more tariff actions that could muddy the waters on border negotiations.

These include substantially raising tariffs on steel and aluminum to a flat 25 per cent, rescinding longstanding exemptions for Canada and Mexico, the largest sources of U.S. imports of the metals. These steep increases, which also extend to hundreds of downstream steel products, are due to take effect a week after the border tariffs, on March 12.

Trump has also said he wants to impose 25 per cent tariffs on imports of autos, pharmaceuticals and semiconductors, and to match duty rates and trade barriers of other countries.

The threatened tariffs could kick off an early launch of a renegotiation of the U.S.-Mexico-Canada agreement on trade that is due by 2026, Ujczo added.

Trump signed the USMCA into law in 2020 after renegotiating the 1994 North American Free Trade Agreement, but has increasingly expressed dissatisfaction with imports of autos from Mexico and Canada.

Progress cited

On Thursday, Mexican Economy Minister Marcelo Ebrard said on Thursday he had a “constructive dialogue” during a meeting with Trump’s top trade officials.

Ebrard said in a post on X that the “joint work” on U.S. trade matters starts on Monday.

Mexico has begun deploying as many as 10,000 national guard troops to its northern border, as part of the agreement that Mexican President Claudia Sheinbaum said also called on the U.S. to work to stop the flow of firearms into Mexico.

Canada this month created a new fentanyl czar to coordinate the fight against smuggling of the deadly opioid, appointing senior intelligence official Kevin Brosseau to the post.

Ottawa also has reclassified drug cartels as terrorist entities and has deployed drones, helicopters and other surveillance technologies on the vast northern U.S. border.

Canadian Prime Minister Justin Trudeau has kept in close contact with Trump on the border issues in recent days, including in a Saturday call that included discussions of joint efforts to curb fentanyl trade. He has threatened retaliatory tariffs on C$155 billion of U.S. imports, including American beer, wine and bourbon and Florida orange juice, but said last week that Canada is “going to do the work” to ensure that tariffs are not imposed.

Why it matters for Canadian agriculture

The imposition of tariffs could wreak havoc for Canadian farmers largest export market.

— Additional reporting by Jeff Mason

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Beijing in September launched a one-year investigation into canola imports from Canada after Ottawa imposed tariffs on Chinese-made electric vehicles, prompting importers fearing retaliatory anti-dumping duties to scale back purchases from Canada.

December shipments from Canada dropped 12 per cent from the same period the year before to 588,181 metric tons.

That was the first year-on-year decline in seven months and the smallest shipment volume since August.

More than half of Canada’s canola exports make their way to China, the world’s biggest oilseed importer.

China’s total canola imports rose in 2024 to 6.39 million tons compared to 5.49 million tons in 2023, customs data shows. Nearly all of that, at 6.13 million tons, arrived from Canada, amounting to $3.29 billion (C$4.71 billion).

Total Canadian canola exports have been strong since Aug. 1, with China accounting for over 75 per cent of shipments, Farm Credit Canada economists said.

“The export pace is running 10 weeks ahead of schedule,” they wrote in a  Jan. 15 report.

“Even if China slows down as expected, Canada will only need to export another 3 million tonnes of canola to reach Agriculture and Agri-Food Canada’s (AAFC’s) export target of 7.5 million tonnes in 2024/25. China’s anti-dumping probe is more likely to impact 2025/26 exports.”

—With files from Glacier FarmMedia

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