CITT Decision Sends Body Blow to Canadian Corn Producers

It’s that time again.  Late April is the time of year when I blow the dust off the corn planter.  It brings back memories of the harvest of 2004 when I hauled thousands of bushels out of the field sold at over $4.00 a bushel.

Unfortunately that memory seemed to have got lost in the spring of 2005.  Planting corn last year was all based on hope.  Hope that is, which never came.  Growing corn in 2005 in Canada was a road to nowhere.  Last week’s surprising decision by the Canadian International Trade Tribunal that dumped and subsidized imports of U.S. grain corn is not causing injury to Canada’s domestic producers was the final straw.  It was a slap in the face to every Canadian corn farmer.

When I heard the decision I couldn’t believe it.  My tentacles as a journalist reach deep into both the federal and provincial agricultural bureaucracy.  All my sources were expecting some type of win for Canadian corn producers.  How could it be any different based on two positive decisions earlier from the Canadian Border Services Agency?

So I was expecting some type of win, even if it was 20 cents a bushel, down from the $1.65, which had been determined earlier.  So when the decision came it was like a two by four over the head.  It was a sucker punch right out of the blue.  The CITT as a federal agency better have good reasons come May 3rd.  If it looks like a sell out, they’ll lose all credibility.  We are all waiting to hear their reasons.

This is part of what the Canadian Corn Producers had to say thru their press release.

“Given the preliminary CITT injury finding, and CBSA’s two subsidy and dumping findings, (Tuesday’s) CITT decision that no injury was found obviously is disappointing”, said Brian Doidge, spokesperson for the CCP in a release.
“Unfortunately, in this David vs. Goliath battle, Goliath was able to convince the CITT that Canadian corn farmers are not being injured despite massively dumped and subsidized imports backed by 2.4 billion more bushels of surplus U.S. grain corn,” says Doidge. “We do not agree with that finding and are considering all our options. Canadian corn farmers are being pushed out of business by unfair and illegal U.S. subsidies. We will not give up as our future and the future of the Canadian grain and oilseed sector is at stake.”

For our farm leaders, the guys who led the charge on the countervail this must have seemed like a punch to the gut.  To spend a lot of money and lose is tough.  To spend the money and the energy and lose is tougher.  I believed it was a fight worth fighting.  Yes, we were David.  Last fall, at least for a few weeks, it looked like we had Goliath on the run.  In the end we will win.  It’s just hard to be positive now.

So where does that leave the lonely Canadian souls who blew the dust off their corn planters this past week?  Where does that leave anybody in Canadian farm country that considers corn part of their rotation?  What should they do?

Many have chose to not grow corn at all.  This is the case even though $3 corn is a reality on the ground for corn delivery over December futures.  No that’s not good, but is it better than $4 or $5 soybeans?  Many Canadian corn producers however are still answering yes.  This is in an environment where oil prices are settling above $72 dollars sending the price of nitrogen into the stratosphere.  In the end, it’s still based on hope.  How could you categorize growing corn in 2006 in any other way?

Someone once said it’s a long way to Tipperary.  That’s the way I feel when I plant corn.  When my first seeds go in the ground at the end of April, I always think about all the pitfalls that crop will see on its road to November.  Ditto for the whole crop across North America.  For the past two years the crop has been highly resilient.  11 billion bushels of corn were grown last year in the US.  There was 11.8 billion bushels of corn grown the year before in the US.  Will the trend continue or will Mother Nature throw a chink in the supply chain, sending price into the land of profitability?

Ethanol seems to be making a difference.  Ethanol plants are seemingly everywhere.  So will be dry distillers grain, but that’s another story.  After last week’s countervail decision Canadian ethanol manufacturers are almost giddy.

That feeling might be premature.  Corn production in Canada cannot stay unprofitable for the sustained growth of the Canadian ethanol industry.  The Canadian ethanol industry’s glee in last week’s decision could work to their peril.  At the present time making ethanol is like printing money on a fast speed copier.  At some point there has to be some equity built in between the ethanol fat cats and Canadian corn farmers.

Canadian Corn farmers might have lost last week, but believe me, this thing is far from over.