A Miserable Harvest Continues Amid Two Faced Challenges

It is getting colder in SW Ontario amid a fall that seemingly just won’t quit. Things are quiet on my farm as I finished harvest a couple of weeks ago. However, it cannot be emphasized enough how much of a battle this harvest is for people with crop still in the field. Simply put, much of Ontario and Quebec’s corn remains in the field. With a Canadian winter about to pounce, things are getting very serious.

Currently, the US corn basis value at Varennes Quebec, is $1.40 US. It’s that way partly because much of the Quebec corn is down, with snow and cold coming. This corn has to be harvested as these Quebec winters too harsh. I had a friend show me pictures from the Quebec corn harvest near Drummondville Quebec last week. He had mounted a contraption on his corn head to help dig up down corn and get it into his corn head. The field was full of snow and he was moving slowly. I asked him how much he had left and he told me 600 acres and then there were his other customers! Stay tuned, this is never fun and 2019 just won’t give up.

Needless to say, the past harvest week has been challenging for farmers, there are a few other Canadians having a rough week too. Our Prime Minister was in London England last week attending the NATO summit. That was effectively hijacked by the American President, who demanded the stage and badgered other world leaders. Justin Trudeau was publicly challenged by Trump over NATO funding. He fumbled out a few lines in front of the American President, but then did the deep dive later by mocking the American President with the cameras running.

The resulting video evidence went viral spreading around the world like wildfire. Every Canadian farmer cringed on seeing that news, knowing full well, agricultural trade with our American cousins is most important. Asked about the video, Trump called Trudeau “Two Faced”, a clever throwback to the black face, which came out during the election. He later said, Trudeau was a nice guy, but the damage has been done. Nobody wants to set the American President off, especially when he could be key to settling the on-going trade dispute with China with the Huwaei connection.

That dispute continues with no clue to when it will end. Former Finance Minister John Manley proposed this week an exchange of Meng Wanzhou for the two Canadians being held. Keep in mind this is the same John Manley who said Canada should have conveniently ignored her while she slipped through the Vancouver airport. In fact, Huawei CFO Meng Wanzhou penned an open letter this past week, where she said house arrest was difficult but allowed her to slow her pace in her life, read a book and complete an oil painting. Needless to say, there was no open letter penned by the Canadians in Chinese prisons.

Meanwhile canola is the agricultural commodity victim, with Canadian exports down 9.5% from last year at this time, based on numbers from the Canadian grain commission. None of that is good, but the Chinese decision not to take Canadian canola has been mitigated to some extent by European buyers. However, we want China back or at least the possibility of China back buying canola. Meng Wanzhou seems to be doing just fine.

Unfortunately, we act in somewhat of a vacuum when it comes to China. Before July 2016, I talked about China’s voracious appetite for almost any agricultural commodity that we could produce. Agricultural economists defaulted to huge Chinese demand and huge potential Chinese demand. What we’ve learned over the last year and a half, is that’s we’re never going back there again. China has shifted, 100 years is short term to them. Things will change someday, but the trade damage has been done.

The vacuum or dearth of good Chinese information is to be expected from the Chinese regime. For instance, I’m referring to canola and other grain demand, but how about African Swine Fever? We know the number of hogs being culled is about the size of the hog herd in Europe, but who really knows? Simply put, ASF is a drag on demand for corn, soybeans and canola. Finding out the truth about it is a journalistic fantasy. Good luck with that.

It would be wonderful to wake up next week and find out the Americans have dropped their extradition order for Meng Wanzhou, with the jailed Canadians being freed. Along with that, we get two weeks of above normal temperatures with sun to get the rest of the harvest in. It would also be nice to walk that “Two Faced” episode back. Needless to say, it’s likely 2020 will come before any one of those things gets done.