'Everybody's gotta eat,' farmers say as they navigate tariff uncertainties

The Canadian agriculture industry is trucking on as usual, even with a trade war between Canada and the United States underway.

Several farmers, producers and manufacturers who gathered at the London Farm Show at the Western Fair District on Wednesday told CBC News they are confident that their industry will persist, despite economic threats and uncertainty.

"Everybody's gotta eat three times a day, so who produces that food? Farmers," said Daniel Cote, a farmer from Quebec who works for agricultural machinery company Case IH.

"We never get that affected by anything that goes on in the world," said Cote, referencing the COVID-19 pandemic and war in Ukraine. "Farmers get up every morning and they farm."

U.S. president Donald Trump's 25 per cent tariffs on virtually all Canadian imports took effect on Tuesday. Ottawa has responded with counter-tariffs on an initial $30 billion worth of American goods. 

Many farmers who spoke to CBC News said they are taking a "wait and see" approach to the tariffs, with some adding that they think the trade war will be resolved sooner than later. 

"I wouldn't say we have a plan at this point in time because you hear one announcement that there's a tariff, and then you hear there's going to be a pause," said George Drummelsmith, a farmer from Dutton, Ont. who also works at Pioneer Seeds. 

"I don't think we have a set plan, given we don't know what's finally going to happen," he said.

Lou Mason, who has a farm near Barrie, Ont., agrees: "We have to go with the flow, take the highs and the lows, and work our way through it."

Some parts of industry more affected than others

While tariffs are not yet changing farming operations, it is a topic of conversation in the industry.

Fertilizer is one part of the agriculture industry that could be most affected by tariffs, according to Moe Agostino, who hosted a talk about tariffs and farming at the London Farm Show. He said Canada sells close to 90 per cent of its potash, which is used in fertilizer, to American farmers. 

"It's really to do with exports and whether it lowers the demand for exports because of the tariffs," Agostino said.

Drummelsmith said that while Pioneer Seeds should not be majorly impacted by tariffs since most of their seed is produced in Canada, the wheat and soybeans their farmer customers eventually grow could be.

"When markets hear the word tariff, that brings uncertainty and causes the Chicago Board of Trade to react negatively like it has the last couple of days," he said, adding that the price of commodities can rise and fall. 

"When we're looking at the farmer, he doesn't know if he's going to be able to pay his bills or what his margins are going to be, so does he have to then cut back on his expenses and maybe not raise a crop that is as good as it could be?" Drummelsmith said. 

Cote said he expects the farming equipment industry, on the other hand, to stay in good shape. He said most companies are building their products at plants all around the world, including Case IH, where about 80 per cent of the equipment is made outside of the U.S.

Ongoing tariffs could cause ripple effect 

While the agriculture industry may not see the impact of tariffs on their business now, Drummelsmith said that could change in the future – and extend to everyday consumers.

"They put a tariff on what's going out of our country and we reciprocate that, and that ends up costing the consumer more money," he said. "Things like margarine, eggs, beef and Coca-Cola all end up going up in price."

Agostino wants to remind farmers that the trade war is not just limited to the relationship between Canada and the U.S.

"It's a global marketplace," he said. "It's not just about the United States anymore. It's about what's happening in Brazil, Russia and China."

Several farmers said that while they aren't necessarily worrying about tariffs, they still hope for more stability in the future.

"Instability is not good for business," said Cote. "Nobody really wants to spend money when you don't know what's going to happen tomorrow."