Today, we learned of the death of former Prime Minister Brian Mulroney.  Mr. Mulroney was the Prime Minister when I started writing this column over 38 years ago.  At that time, I was writing about agricultural policy called GRIP and NISA, both great policies at the time, before they were emasculated by later administrations.  Free trade was also a legacy of Mr. Mulroney, and it is something that has benefited Canadian agriculture over the last 30 some years.   I’m sure a state funeral is in the offing. We’ll have to wait and see when the plans are made.

It was a different time back when Mr. Mulroney was in office but of course on the farm things were very much the same in terms of agricultural economic conditions. We had low prices then, just like we have low prices now but of course the world has changed greatly. Not only is agricultural production much higher but there’s also been great technological change which makes comparing the eras almost impossible to do.  Needless to say, I remember very clearly in the first iterations of this column how I shared both sides of whether we should have free trade with the United States.

Little did we know then that it would be redefined more than a few times and that same agreement is now referred to as CUSMA or USMCA in the United States.  Who knows, with an election coming in November in the United States we might have to redefine that agreement one more time.

I will leave that up to American voters in November. In the meantime, we’ve got another crop to plant and of course everybody wants those prices to turn the corner. We actually had May corn go up four straight days this week and it felt like Independence Day. Your loyal scribe found himself in Colborne Ontario delivering an outlook message on the upcoming growing season for TCO Agromart Ltd.   It was pretty clear when I got there that many growers were looking to me to give them some good news.  I laughed as I told them informally, I don’t know if I can do that.  It is pretty rough out there.

One topic that I brought up was the renewable diesel mandate in the United States which should see demand for American soybeans grow aggressively. From a Canadian perspective it’s always interesting to look across the border and see successive American governments take seriously the American agricultural sector. We know what ethanol did for the American corn economy and the new government emphasis on renewable diesel has the potential to do the same for the demand of soybeans in the United States. Of course, here in Ontario and Quebec it’s only natural that we’re hoping for some type of spillover effect on the price front to help local farmers.

I brought up the point during the meeting that this renewed focus on soybean demand through renewable diesel has the potential to increase domestic soybean demand to such an extent that our American friends will begin importing even more soybeans. I’m sure you all aware that Brazil soybeans are being brought into the southeast United States to satisfy some in the poultry sector. This is not particularly new as it’s been done before. It is no secret soybeans at Brazilian ports are priced significantly cheaper than soybeans at the US gulf. It only stands to reason that some enterprising American entrepreneur this finding good reason to get these Brazilian beams into the United States.

It seems so counter intuitive to what we’ve always believed.  I mean could you imagine Brazilian soybeans being barged north up the Mississippi to shiny new renewable diesel plants?  I know, it is hard to imagine but it seems Brazil agriculture is redefining not only the prices that we are receiving in 2024 for old crop grain, but it’s also redefining trade flows around the world. Adjusting to that in Ontario Quebec will remain a great challenge.

In some ways, you’d think soybean prices should be more bullish, but with a world awash in cheap corn and cheap DDGs, it’s pretty hard to have expensive soybean meal.  In that light, it was hard for me to give the Colborne Ontario farmers hope.  2024 is shaping up as not the most profitable year.

That’s one reason why through the years I have consistently asked for a Canadian agricultural policy that works.  The Mulroney programs now dismantled were a huge step at the time of getting there.  Unfortunately, that battle has been lost, but in the vacuum, agricultural productivity exploded.  markets were expanded and segmented and of course other players like Brazil got caught up in it too.

The Colborne Ontario farmers were hungry for some thread of optimism.  I don’t know I delivered on that.  However, sometimes it’s always darkest before the dawn.  There will be better times ahead, I’ve been here, so many times before.