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Several Factors Combine to Cushion Impact of Corn Duties

by 5m Editor
17 February 2006, at 12:00am

CANADA - Farm-Scape: Episode 2065. Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council and Sask Pork.

Farm-Scape, Episode 2065

Sask Pork says an abundance of feedgrains in western Canada, the cost of moving those grains east and the duty drawback appear to be cushioning the impact of import duties on American corn entering Canada.

In December the Canada Border Services Agency imposed provisional antidumping and countervail duties totaling one dollar and 65 cents US on unprocessed grain corn imported into Canada from the United States.

Sask Pork Policy Analyst Mark Ferguson says the cash prices for feed wheat and barley are similar to what they were before the duties were imposed.

He observes the price for wheat is about what it was in September and the price for barley is even lower so there's really not a lot of evidence that producers in western Canada and, in Saskatchewan in particular, are being harmed by the duties.

"Feed markets are complicated to predict because the feedgrain supply is basically the residual of the human consumption markets but I think some of the factors are that, for one, corn prices haven't increased in the east and in Manitoba as much as many people including myself thought they would.

Depending on where you're looking the corn price is only up 30 dollars a ton. Even with the duties in place it appears to be more expensive to transport wheat and barley out east than it is to purchase corn in those regions so, of course, producers in the east are not bringing in wheat and barley.

They are still using corn. I think one of the things that's influencing this is the duty drawback option. Heavy users of US corn are probably utilizing this option and that's meaning that the corn price isn't moving up."

Furguson notes western Canada is the beneficiary of a large supply of feed grains this year and that's definitely softening the impact of the duties. He believes, if we did have a short supply of feedgrains, we would be seeing an impact.

For Farmscape.Ca, I'm Bruce Cochrane.

5m Editor