Impact of Tariffs on Canadian Crops | Guest: Chuck Penner

[00:00:00] Speaker A: Welcome back to the what the Futures podcast. Thanks for tuning in here once again. We talk more tariffs this week in episode 62. We Talk Trump tariffs. We talk impacts to consumers when it comes to tariffs, impacts to farmers when it comes to tariffs. Another tariff episode. It's probably not going to be the last one. It's important stuff. We have to talk about it. Chuck Penner with Left Field Commodities joins me here for episode 62. Chuck and his partner John have been working and doing analysis on what crops are going to be impacted the most, what Canadian crops could be impacted the most with tariffs and which ones could come out of it in just as good or even maybe better shape. You know, there is some of that as well here for Canadian crops. So I know it, folks. I know it's a big topic. I know it's not going to be the last episode where we chat tariffs. But hey, welcome into episode 62. Let's keep it rolling here. Let's get into it. Hey, folks, welcome to the what the Futures podcast where we break down complex market trends into simple, actionable advice. It's your quick guide to better farming decisions. All right, folks, welcome into episode 62, recorded in the UPL studio each and every week. February 15th is coming up. Quick, folks, Grower rewards program deadline with the folks over at upl. Reach out to your retail, whoever you're dealing with or your UPL rep. And yeah, get, get the details. It's a lucrative program. You got to reach out to them, though, and get that sorted out and figured out. Of course. I'm your host, Ryan Denis. I've worked with farmers across the prairie provinces and for the last, yeah, I don't know. I don't know. I think it's 15 years now, 16 years, something like that. And yeah, analyst in the past led a team of advisors, crop marketing advisor myself, and also bought grain way back in the day, too. So haven't done it all, folks, but I've done a few things in the industry. All right. If you could do me a favor, you know, just share the episode with somebody in the farming industry. You know, if you're finding value in these episodes, tell it to your friends and neighbors. You just never know if you may help them out on a decision and yeah, help them make a good decision. If you're getting, you know, if you're getting some knowledge and you appreciate what we're doing here at what the Futures. Each and every Friday I just ask you to share it. Subscribe to the YouTube channel. If you're on Apple Podcasts give us a rating, give us some stars as well. One star to five stars, your choice. But I appreciate all the help I can get on that. All right. Obviously a big show. Chuck Penner here this week to talk about more tariff stuff and I know that you're going to get tired of this topic, but the implications, the impacts. All right, let's start, let's just start with the impacts here quickly. If I could go off script here for a minute and not that the episode is scripted, but I'm definitely going to go and just switch this around real quick because I wasn't going to talk about this right away. But just, you know, just look at what the Canola market did over the last, you know, number of days or even over the last couple of weeks. Right. Like we're trading has even been that major. But we hit a low here of 623 as of recording. You know, we're trading around 645 like 50 cents a bushel. There's decisions here being made each and every day based on these tariffs and based on the information that we're going to talk about this week with Chuck. And it's important, it's important stuff for you and your farm. We have farms doing the safety sale where they're out there making sales just based off the unknown. And I get it, I understand that. I definitely get it. But my message to farmers here and to the Lunchbox crew has been, you know, this is a lot of noise. This is a lot of noise that is trying to get you off your game. You know, we got together in December for the Crop Marketing Made Cool conference and we, you know, we talked about writing down plans. Writing down always conveniently located as my crop marketing handbook here but workbook but you know, writing down the plan for the, the year and multiple years because, you know, helping guide the ship here and the decisions and avoiding some of the noise. You have markets in an upward momentum. Corn, soybeans, wheat, Minneapolis, Kansas, Chicago, everything. Upward momentum, Canola, maybe not as much lately, but still giving us chances towards the high end of that short term range. But even people's looking at Canola saying this thing is these charts are looking good. This Canola chart, actually if you look at it, it looks like it's in a bit of an uptrend as well. Right. And so my message here has been about momentum and just recognizing the momentum of these markets and making decisions based off your plan and just acknowledging that momentum can the tariff change momentum 100%. It can, but it's just Noise right now, it's noise. Is it having impacts out there? Yes, each and every day on farmers selling decisions on crop input, prices on some of the deals that are not happening now because of the potential of tariffs from our merchandising groups out there. Like it is having impacts each and every day. But just if I simplify it to just farmers and selling crops and buying inputs, we can put that in there as well. Just try to avoid the noise as best you can and focus on the momentum out there. I've chatted with people this week that they, they like what they see in the. In these charts. They like what they see from a momentum, or not even a momentum, but from a chart perspective. Right. They like the setup here. We'll see. We will see. But the price of wheat as we get to the end of the week here. It's Wednesday when I'm recording, but certainly improved a lot since last week. So, you know, if you're making those safety cells, I get it. But also, you know, let's look at momentum. All right. Farmers were asking questions this week, you know, about wheat basis. I'll talk about that later in the episode. Farmers wanted to. To talk about some of the, the impacts here. That's why I've got Chuck on the show this week. Obviously a great guest each and every time he joins us. Chuck and his team, John, they're putting together a report here. Go to their website, you know, left fieldcr.com sign up for the free trial if you haven't done it before, and, and see what crops are be more impacted or less impacted by the tariffs. That's what we talk about in today's episode. So another tariff one. I know you'll be sick of tariffs, you'll be very sick of it by the end of 2025, but hey, it's having a major impact and we do need to talk about it. All right, Chuck, welcome back to the what the Futures podcast. I see you got a little different background today. What's going on, man? [00:08:16] Speaker B: Well, sitting in a hotel in Saskatoon. I love Saskatoon, but working remotely kind of. Kind of sucks because, you know, trying to work on a laptop, usually I have three screens in front of me and trying to keep track of things like going on. And then of course, for a good chunk of the morning, they were testing the fire alarms here. So every 30 seconds I jump out of my skin and. Yeah, but yeah, in Saskatoon for a SAS Pulse Growers meeting yesterday and working here today and then tomorrow going up to Dublin for a meeting there. And so yeah, seeing some of the province, but yeah, I was driving. Give you the. I'll try to shorten the travel story a little bit, but yeah, supposed to fly from Winnipeg to Saskatoon first thing Wednesday, Tuesday morning, got on the plane at 7, got off the plane at 7:30, still in Winnipeg because it was quick flight. So then I see, I get off the plane, I realize, oh, there's a flight to Regina at 8:45. Okay, I'll jump on that one. It'll still get me there on time. So change my flights. I book a car to drive to pick up in Regina, drop in Saskatoon and so on. I get, get on the plane, we fly there and then as soon as you turn your phone on to get off airplane mode, I get this little message, oh, this is Enterprise. We don't have any cars for you. [00:09:30] Speaker A: Perfect. Great snowmobile. [00:09:32] Speaker B: So, so anyway, I found one with Hertz. They, they first they were going to give me a Tesla and I said, well, I kind of have to drive to Nippon at 25 below, so I think I'm going to decline. The Tesla would be interesting to drive one. Yeah, good conditions. So I got a little, you know, a little puddle jumper. Now that. With no snow tires. So it could be fun tomorrow driving up there. But whatever. That's winter. There's always this thing when you travel in Western Canada in winter. It's this trade off. Do I drive or do I fly? And it's just like the line at the grocery store. I always pick the wrong one. Oh yeah, that's just me. [00:10:08] Speaker A: I'm getting a little better at the grocery store line. I am improving on that. I don't know, I've changed my tactic around and it's helping. But yeah, traveling across the prairies in the winter. Like last year I was coming out of Winnipeg to get home to Edmonton and I ended up. My flight was getting, it wasn't canceled yet, but it was on its way to being canceled and I just went. Air Canada had a direct flight to Edmonton. And I'm like, hey, can you let me know if there's any seats on this flight? And she's like, I can't tell you. I'm like, what? And she's like, you have to go on the app and look and buy your ticket. I'm like, I'm standing right here in front of you. She's like, I can't do it. You have to do it on your phone. And she's like, and you have four minutes. Okay. So I'm like hustling. It all worked out. And I made it home, but my. My flight was canceled. I wouldn't have. I would have got home. It was 30 hours later is what would have happened. So anyway, travel. Good old travel. And here I thought you're gonna say I'm in my hotel room in Cabo. That's what I kind of. That's what I was thinking. But. [00:11:12] Speaker B: Well, the wheat growers have their meeting down in Mexico. Right. And, yeah, they haven't invited me, so what am I gonna do? [00:11:18] Speaker A: Yeah, I didn't. I wasn't expecting an invitation, but I didn't get one either. I would have been nice to get one. So if you're listening, you know, for next year, they're not. [00:11:26] Speaker B: They're on the beach, but. [00:11:27] Speaker A: Yeah, that's true. Okay, well, if you listen to an old episode, one day, my passport is current. Okay. [00:11:33] Speaker B: Yeah. [00:11:36] Speaker A: All right, Chuck, on the road, everyone's been dying to know, when it comes to tariffs, is India extending the exemption moving forward? [00:11:48] Speaker B: Oh, yes. Oh, yes, that old India. [00:11:51] Speaker A: That's, I guess, a duty. Maybe it's a duty. I don't know what it is, but whatever that is, call it there. [00:11:56] Speaker B: Yeah. Well, yes and no. I was talking about that a little bit with SAS Pulse growers folks yesterday. And. And that was essentially. I mean, the govern. Indian government has. Its. Has. Is always trying to balance between keeping consumers happy and keeping farmers happy. So they're trying to find that sweet spot in prices. And of course, any market manipulation, you know, just generally doesn't work. And so they don't tend to get there very much. But I look at it in a couple of ways. So one is looking at crop prospects in India. So if they have good crop prospects, you know, that they should have increased production, increased domestic supplies. [00:12:34] Speaker A: Yeah. [00:12:34] Speaker B: Increased odds then that they would put those tariffs back on. Now, when I look at their planting of their Rabi crop, which is in the ground now, and some of the early stuff will be harvested now, in February, their acreage was down for. For peas and for lentils and for chickpeas compared to last year. So. And when you look at satellite vegetation maps, you see that conditions are better than average, but worse than last year. So, okay, if those are any indication, that would suggest, you know, the yield should be not as good as last year. Last year was a really good year in India, but not as. But better than average. And so you have lower, Lower acres and you have, you know, low. Lower than last year's yields. So you'll likely have smaller crops than you did last year. So that's a positive signal or a positive sign of what they might do if that's going to be their, their criteria for. And then. But the other one is prices. So you look at prices, because that's what they're trying to control is what goes on there. And yellow pea prices have continued to just. Just trend steadily lower in India. And with low prices, that means they have more incentive to put tariffs back on to keep out imported peasants. At the same time, desi chickpea prices in India have also just kind of have really fallen off the cliff because all of these Australian chickpeas are now coming into India. [00:14:01] Speaker A: Right. [00:14:02] Speaker B: And so, so that's, that's sending the opposite signal that they, that they might put tariffs back on peas. At least peas, maybe. So. So just to back up, the deadline for. For peas has been kicked down the road to February 28th. Yeah, there's gonna be a lot happening that day, isn't there? [00:14:20] Speaker A: Big day. Big day. Maybe take the day off, Chuck, because. [00:14:24] Speaker B: There'S stuff in the US Too, apparently. [00:14:25] Speaker A: We'll get to that. [00:14:26] Speaker B: But then for lentils and chickpeas, that deadline is end of March. So those are the kind of two things. Now for lentils, production is probably going to be down and the prices there are just flat, and it's a pretty good levels. So I would say that the, the largest odds would be for them to put tariffs on yellow pea imports a little less. Less likely for. For chickpeas, which doesn't concern us directly, and then less yet for red lentils. So that would be my order of whatever. So the lentil market is probably seeing the least risk that way, and then the lop market may be seeing the most risk that way, if that makes sense. Yeah. [00:15:07] Speaker A: Okay. [00:15:08] Speaker B: So, yeah, it's, you know, there's conflicting signals essentially with lower production, but also lower prices right now. [00:15:15] Speaker A: And, you know, maybe it's a situation where they, you know, they put it back on for a period of time and then maybe it's revisited later on this year. And. [00:15:23] Speaker B: Yeah, but the problem is that, like, especially for peas, they've done it, what is it, three, three or maybe four times now. They've extended that deadline. Last time was like, from December end of December to the end of February. Like, how do you trade properly with that kind of short? Like, if they'd say even six months, you know, that helps. But yeah, because it takes basically six weeks. I mean, it is based on the date that the bill of lading happens in Vancouver, but, you know, it takes about six weeks to get Peas from western Canada into India. Yeah, your window is two months. So it's. Yeah, it really makes that trade difficult. And, and then the other thing I would say with respect to yellow peas is when you look at where yellow pea prices are in India right now, even if they started importing more like we wouldn't see a bump of a dollar or two in, in yellow P bids because sure, prices in India are so low that they would just say, no, we're out or we're going to Russia instead or. [00:16:20] Speaker A: Right. [00:16:21] Speaker B: Yeah. [00:16:21] Speaker A: I, I also wonder, you know, and listeners, maybe they would share this or not. We'll see. But like who has yellow peas left to market across the prairies? Like, I don't know what that percentage would look like, but I know I would have to make quite a few phone calls to find somebody sitting on yellow peas or a significant amount of yellow peas. [00:16:41] Speaker B: Yeah, yeah, I think we've had a really good selling early in the year because of India. But yeah, there still are some out there for sure. [00:16:48] Speaker A: Yeah, we're going to be down to. [00:16:50] Speaker B: Fairly low supplies by the end of the year. [00:16:52] Speaker A: Yeah. Okay, let's keep talking tariffs here. I feel like I lived like a crop marketing life on the weekend and then I lived another crop marketing life on Monday and apparently it's Wednesday now today, but it's been a bit of a week. I saw on X that you were doing a little bit of work here when it came to, to U.S. tariffs and some of the impacts. How, how are you taking these first, these last couple days and anything kind of standing out for you? [00:17:21] Speaker B: Well, yeah, in our, in our weekly reports, our different weekly reports, we're, we're essentially looking at how exposed certain Canadian or all Canadian crops are to trade with the US and not only that, but then from the other side, how reliant is the US on Canadian products or Canadian imports. But yeah, I was writing these reports. I was writing the first one and was working on the weekend and then, and then again on Monday and, and I think I rewrote that introduction, I don't know, three, four times just because, just because it's. Well, maybe, you know, you gotta. No, it's happening. No, it's not. Or mid fight still. And it's just kept you on your toes, that's for sure. You know, I don't know. You know, it's my, my gut instinct tells me the fact that we got this 30 day reprieve suggests that there might be a little more thought that will go into it eventually. You know, a month from now, that could mean that there still are tariffs, but they might be, there might be carve outs, certain things exempted or certain things at lower rates and certain things at higher rates, just like they did with oil at 10% and, you know, everything else. But I think there might be more and more thought going into that. The other thing is, is that, you know, because of this, you know, Trump can claim that he has had a win already with Mexico and with Canada, and so therefore, you know, you know, his ego is satisfied and he can, for now, get political anyway. But, but, you know, he may, you know, he may move on to other topics now or, or like the middle, like the Middle east, you know. [00:18:54] Speaker A: Yeah, let's not get into all that today. Holy smokes. [00:18:57] Speaker B: So anyway, so that's, that's kind of. Yeah, we're trying to, there's, there's a whole lot of guesswork going on. Yeah, but you can, but that's what we were trying to do is figure out if they happen, then what would be the exposure. [00:19:08] Speaker A: Sure. So January 20th, we got word that he was kicking it, or maybe it was the next day, kicking the can down the road for whatever it was a couple weeks, and then now it's kicked down the road for a month. You know, it does show, you know, not, not a change in imposture per se, but it does show that there's maybe more to this than just, you know, where do I write 25% down and sign it and deliver it. Right. There's more to it. [00:19:38] Speaker B: So there is still talk about this April 30 thing where the US Trade Representative will have had some input. They're coming back with the report April 30th. So it could on the cat, kick down the road again to the end of April. End of April, Yeah. [00:19:53] Speaker A: Yeah, yeah. So, you know, I was chatting with growers over the weekend and early this week and, and with a few other analysts, people as well. And, you know, I, my, my trade was, you know, if tariffs were on, my trade was, you know, go long on oats or be bullish oats and cattle and, you know, be bearish canola. And I didn't care about wheat a whole bunch and maybe corn depending on Mexico. But I saw oats just kind of shoot up, you know, in the day that, you know, you know, leading into the potential for a tariff. And I thought, hey, I almost got one right there. So is that one of the crops that is highlighted in some of the work you're doing right now is oats stand out For a reason. [00:20:37] Speaker B: It does stand out. I don't know if I, I don't know if I would be on the bullish side, though. You know, I mean, we have to talk about old futures as kind of being useless as a, as a really real. Yeah, but in terms of cash bids, I was talking to somebody this morning and they said, yeah, last week they were getting. Or is it two weeks ago? Anyway, fairly recently they were getting. Someone was telling them, one of the buyers was telling them to put in bids at 475. And then today they got a call at. Or they were ready to do something and no, it's 375. So. So that's not good. I mean, what. The way that we look at it is how much of our Canadian oats go to the US and it's a large, large share. And not only that, but the, the very, very large share of oat products. So our Canadian oat millers are also highly reliant on what goes on in the U.S. yeah, so that's the same. But if you, if you, you know, flip it the other way. The US Relies extremely heavily on Canadian oats. So then you think, okay, well, what are, what would their options be? And so we tossing those ideas back and forth and those kind of things. And. Well, in terms of importing from other countries, there's nobody else that really. Maybe the Aussies a little bit, but they don't have huge amounts of production and they're selling mostly China. So there, there really aren't other options. People have asked about, you know, Scandinavian oats. Those volumes are really small too, and they're all spoken for. So in the short term, they would need to pay the tariff. The users in the US Would need to pay the tariff because they have no other options. If you fast, if you look ahead to the next crop, well, maybe they can encourage US Farmers to plant more oats to offset that, but you have to have the right price incentives. And if all of your oatmeals are in Iowa and Minnesota competing against corn and soybeans for those acres, like, good luck. [00:22:24] Speaker A: Well, yeah, corn is, is doing its thing right now. It's having a heck of a run. So good luck. Right, so. [00:22:30] Speaker B: So oats. But oats does make me somewhat nervous in that respect. [00:22:34] Speaker A: Yep. The other one that, that has been coming across my feed the last couple days here this week has been malt barley. Have you guys dived into malt barley at all to see if that's got implications or. [00:22:49] Speaker B: Well, yeah, I mean, actually, I was Just looking at it this morning. So, so yes, in fact, some of those numbers are still sort of in my head, which is nice, a bit of a feat. But. But yeah. Well, on the, on the barley export side, China dominates our barley exports. Like it's like 80, 85% of our barley exports go to China. And then this year anyway, or this last year, Japan was also buying some significant volumes and the US was in third place. They typically buy 150 to 250,000 tons of barley from us. And yeah, that would, that would largely be malt barley. So, so no, it's not an insignificant market. But at the same time, you have the domestic feed of barley in Canada is about double what we're exporting in total to China and elsewhere. [00:23:41] Speaker A: Okay. [00:23:41] Speaker B: So we can we absorb 200,000 tons that we'd be shipping to the States back into our domestic feed supplies? Oh, in a heartbeat, yeah. Especially if we're not buying corn from the US Especially if we tear up their corn coming north. You know, that would be, that would be no problem. But we do they. The US Also is our dominant destination for our Canadian malt exports. So our domestic malsters shipping malt, exporting malt, about 3/4 of it, I think 2/3 to 3/4 is going to the US and so that may reduce, like our domestic, what our domestic malsters are putting through. And I forget what the tonnage is there, but it's, yeah, it's for our malsters. That's a, that's a meaningful chunk of business. [00:24:26] Speaker A: Yeah. I got a message for, passed on to me from a maltster here from earlier this week. And you know, it, it, it didn't portray a lot of confidence in a very robust program for 2025. And it just was like, you know, we've kind of, we've got some commitments now. We're just going to hold on to that and we're not doing anything else right now. You know, we'll kind of circle back here, come back when, when we find clarity or find some type of, you know, path forward. And it just, yeah, like you said, it's pretty big exposure and you know, I guess we could pass that on to the beer drinkers as well though, right. [00:25:13] Speaker B: Over time, I think the bigger deal for the malsters is not the US situation like the US tariff situation at all. I mean, it isn't, it is an impact, but they've been kind of down in the dumps for the last two or three years. And I don't know if we've talked about that here on the podcast, but domestic. Well, consumption of beer is dropping in Canada and in the U.S. i mean, there's, I'm not sure about elsewhere, but malsters, they did shut down a malt, big malt plant in the US A few months ago just because they didn't need the capacity. And so part of it is people switching drinks away from beer into other, other, other, you know, alcohol, you know, these seltzer spirits or whatever. Yeah, whatever. Okay. That don't. And then you also have. And I don't know how big the move is, but. And it's particularly about, among young people about not drinking booze at all. So. So yeah, they're getting hit from, from a bunch of different sides. So the US Tariff thing is probably, it's not no worry, but it's, it's not the big. [00:26:16] Speaker A: Maybe short term, but not long term. Yeah, yeah, yeah. The, the kids, you know, that are half my age out there. Yeah. Like, I know my nephew, he's like 22 years old and he likes going out and stuff, but he does not consume very much. I have a few beers here and there, but not, not much at all. So a little different when I was that age as I, I think I have 240. So, yeah, I have 240 beer to my left right now that are going to Unity for grower meeting and in the next couple of weeks. But I'm doing my part apparently. Yeah. Okay. I'll let you. If is there another crop that stands out to you right now in your research, I'll, I'll. Yeah. Turn over to you on that. [00:27:02] Speaker B: Well, yeah, I mean, if I just kind of run through the pulse crops, lentils would probably be the least affected. We should some red lentils down there, but they don't, apart from Australia, they don't have a lot of other options for that. So I think that would be the least affected. And so that's, yeah, that's among the pulses, dry beans and chickpeas would be the most vulnerable to US Tariffs because we ship a lot of our, A lot of our exports of those two, two pulses are going to the US Peas kind of, you know, probably somewhere in the middle. And again, while that'd be more yellow peas, green peas, not so much affected by that. Mustard, of course, yellow mustard particular would be severely affected. I had again, I was talking to somebody this morning and they were asking me, so what's your outlook on yellow mustard? I said it's either going to be like completely flat or it's going to be like it's, it's going to drop, drop through the basement or you're going to not even be able to find anybody who will give you a bid. That's, that's how bad it could get. Yeah, but I mean, brown mustard, that's Europe. That's a different, totally different market. And oriental, same thing. So those, so that one is one that's, that's particularly exposed. You know, I'm sure you've, you've talked about, or you've thought about canola and that part of the business as well, too. Again, not a lot of other options. We don't ship much seed down there, but it could affect our domestic crushers because we ship all of the oil, almost all the oil to the US and 60% of the meal goes down there as well, too. [00:28:33] Speaker A: So, yeah, you think the crushers are nervous at all about this or, you know, there's been significant investment. It's just, just a blip, you think, on the, on the radar because, you know, I don't understand the whole biofuel blending credits and all that stuff. But, you know, their Canola was not listed or exempt from that blending credit. I'm going to actually interview Susan Stroud here later this week to talk in depth about this type of stuff. But you think the crushers are just saying, hey, you know, blip on the radar and long term, the future is bright, or is there bigger concerns here? [00:29:09] Speaker B: Well, again, you think about, well, how can, what can happen, how can the US Respond if they're automatic? All of a sudden there's a 25% extra cost on this part of the biofuels thing. And again, I don't understand at all. And you know, John has been down to biofuel meetings, conferences in the US and even people down there go, well, we don't know. Wonderfully. Part of it is, is that a large part of the canola oil usage has been in for renewable diesel and in particular in California. So that's a state regulation, not a federal regulation. [00:29:41] Speaker A: Okay. [00:29:41] Speaker B: That makes. So, so Trump may not be able to do much to affect that kind of demand. But sure, you know, do they make adjustments if, again, if Canola oil is 25% higher now, do they make adjustments and so on? That's quite possible. John and I were talking this morning about the canola meal, because most of the canola meal that gets exported to the US Goes into the US Dairy industry. And they really like canola meal. It's supposed to give a higher milk output or something like that. Even though it's lower protein, supposed to help improve milk output, whatever. So they really like it. They make, keep, might keep buying Canadian canola meal. That's possible. But if that spread gets too wide or that, you know, gets too expensive, you know, they might say looking for other things. You know, if a Joe consumer is looking at soy oil or canola oil in the US on the shelf. Yeah, they might make some shifts. They might make some choices too about what kind of oil they're buying and so on. So, so yeah, it does remain vulnerable as well. [00:30:42] Speaker A: And the commercial side shipping canola oil. [00:30:45] Speaker B: To China, but that's, that's not premium market. That's, that's a low price market. [00:30:50] Speaker A: Yeah, you know, like the, the, the commercial side or the, or the food industry side, you know, like back in the day, you know, working for a few different companies. But you know, they talked a lot about, you know, their customers of KFC and McDonald's and who, who else? Right. And all the big ones. And you know, that also is a little bit of a challenge to raise prices. They do. But yeah, they're also usually pretty, oh, it looks like I got a visitor back there. But they can get pretty, pretty mean at times. [00:31:22] Speaker B: So that's, that I find interesting in this whole thing is, you know, you always hear about the, the, you know, the cost of wheat in a loaf of bread is like 12 cents or whatever. So it goes up by 25%, you know, oh, it's 15 cents now for the loaf of bread. Whoopee. I mean it hurts their margins but like those kind of impacts are, you know, to the consumer are relatively small, so they may not change behavior all that much. [00:31:48] Speaker A: All right, so tariffs, I think we've, we've talked a lot about, covered a lot of those different ones. Obviously lots of unknowns there. The China canola tariff that's been on the, on the back burner now just keep it back there. Anything you're hearing on that one or. [00:32:03] Speaker B: Just keep it in the background forgotten, you know, and in the Chinese of course now have bigger matters to deal with than. [00:32:10] Speaker A: Yeah. [00:32:11] Speaker B: You know, one of the things that I wonder about this is nice. Suspicious or cynical or whatever devious mind is wondering because. And this is going to get political so just, you know, you know, turn up the volume. [00:32:23] Speaker A: Here we go. [00:32:23] Speaker B: Warning or whatever is, you know, our current soon to be departed prime minister, you know, has, has antagonized so many people, including Mr. Trump, but also the Chinese and India. And you know, he's just, it makes you wonder if these Countries see that he's leaving now and you know, they, they may, you know, maybe it may be a bit of a reset in Canadian relationships with some of these countries. Maybe that's my hope, that's my hopeful. [00:32:55] Speaker A: Yeah, maybe hope. Yeah. [00:32:56] Speaker B: You know, and, and that could include India, that could include China and you know, because I think, you know, some of the issues, the reason why Trump has come down so hard on Canada is because it's deeply personal, I think, for him, you know, between him and Trudeau. And so, you know, if there's a, there's a change in that, you know, maybe it'll give us a bit of a reset. And anyway, that's my hopeful response. [00:33:19] Speaker A: Well, it's, yeah, let, let's hope for that. And you know, fresh personnel, fresh people involved in know. I don't, well, I don't say it can't hurt, but we'll knock on wood. Okay, Chuck. All right. So you're on the road, Saskatoon Nipwin this week. I saw that you guys have. John has some hedging courses coming up this month. I'm seeing one here February 10th to 12th through Alberta Grains. Where's that one going to be? [00:33:45] Speaker B: Down in Calgary. [00:33:46] Speaker A: Calgary, okay. [00:33:47] Speaker B: Yeah, so I forget one of the hotels. It's on the, if you go to the Alberta Grains website, you have all of the information, look under events and you'll see. So that's a two day session in. It was going to be three days and then I think they've moved it now two days. And, and to be honest, like when I think about the possible risk, like when I look at risk in the market, like you can look at, part of it is one half of it is the odds, like how likely is this to happen? And then the other is the size of the, of the, the magnitude of the, of the risk. And so, you know, those two are whatever. And so we have pretty good odds that we'll see some sizable risk in the market. And so for, you know, canola or wheat or you know, for those ones that you can hedge, you know, this to me is like kind of the textbook here where you, you should be doing something to reduce that kind of risk. So I think it's, I think that's doable. And then there's another session, a one day session in Manitoba in the small town of Niverville. And that's on February 25th. [00:34:47] Speaker A: February 25th, yep. All right. [00:34:50] Speaker B: And so that for that one you can contact. Well, you can just come through our website, the left field cr.com website and. [00:34:57] Speaker A: You can contact information February 25th. [00:35:00] Speaker B: Yep. [00:35:01] Speaker A: Left field. Cr.com. [00:35:03] Speaker B: Right on. [00:35:04] Speaker A: All right. Perfect. All right, Chuck, Well, I wish you all the best on your drive up to Nipwin on those summer tires, that puddle jumper you have. Thanks for joining the show. I look forward forward to seeing your tariff. You know, I don't know what for calling a tariff report, but your, your weekly report on Friday. Look forward to, to seeing that and what you guys all have in there. And I'm assuming I know you've been open to free trials in the past, letting people kind of take a peek. Hey folks, if you're, this might be one that you wanted to get dialed in and you can see what Chuck. [00:35:38] Speaker B: And John put together by doing that. What I would say is we actually strongly want people to do the free trial. We rather they do that first than just sign up because then they'll know what they're getting. [00:35:49] Speaker A: Yeah. So awesome. All right, Chuck, appreciate your time as always. Thanks for coming on the show. [00:35:54] Speaker B: All right, Ryan. [00:35:58] Speaker A: All right, folks, for housekeeping this week, just a reminder that there is that grower event in Unity, Saskatchewan on February 20th. You can reach out to to Taylor Wallace. You can rsvp. Lunch is provided. It's at the Unity community center from nine to three. Taylor's cell number 306210-9954. You text that number to save your spot by February 7th. And that's today actually. So do it tootsuit. Do it right away. You've got Kyle Sinclair with Market Outlook. Trent Clarenbeck's going to be there. Myers, Norris, Pen, I will be there giving out some cool swag and some beverages and having some fun with the crowd there in Unity. So I got that. The other thing I want to throw in here for housekeeping is so there was a round of job cuts out of Cargill here in Western Canada. Certain areas, my area impacted a lot more than than other areas. And then there was a headline about ADM's financials. Their last reporting here wasn't great. And so they're doing some major cuts. And it doesn't have to say ADM there. It could say anybody. It's tough going out there, right, for farms and for folks in the farm industry. You know, I spent some time working with some of the people that got let go this week. And I would just say to farmers out there, I know labor is tough. It's always an issue that comes up each and every winter here when, you know, labor is hard to find. I'm not saying that Your next greatest operator is with this group of people. But you have some 10, 15 year people that know the industry very, very well and may have something to offer a farm from the business side. So, you know, there's, there's going to be more cuts coming. There's going to be good people out there looking for new opportunities. And heck, you might find a diamond, a diamond in the rough out there or somebody phenomenal that can help fill a need on your farm. So tough week for some folks with those job cuts and I know they'll turn up and be just fine. But always stressful when you're in it, right? I think that's going to be it for housekeeping for this week. All right, folks, time for positive moments for this week. My favorite segment each and every Friday, because it is Positive Friday. It is always positive Friday with the when the what the Futures podcast comes out. Okay, number one, we got through it temporarily. The Monday the market was positive. The wheat market, the canola market ended up being positive on Monday though. People were calling for limit down moves on the weekend and we ended it in positive territory. We come out on Tuesday with this thing getting kicked down the road, the tariff thing getting kicked down the road for another month. And it just. Hey, I don't think we expected that, right? You listening? You didn't expect that. Here we are. So that's a positive moment. I got back from vacation as well and we have a two year old and a four year old and it's basically parenting in a different space. Uh, but we saw our two year old, Finley, he was, he's flown a few times now. He's fantastic on the plane. You never know with that toddler rage what you're going to get. And so that was fantastic. And we saw both kids grow as well a little bit. Not just, you know, I'm not talking about height, but you know, socially. We saw both kids out there making friends and Finley's, you know, his sentences now, it was two words. Well, now he's got four or five words he's stringing together and he's really telling us what's, what's on his mind. And that really came out on vacation. He, he was, his communication just skyrocketed. So great time in Puerto Vallarta. I know we had farmers at neighboring resorts. We did not get together for a coffee and a market outlook. Maybe I should have suggested that coffee crop marketing iguanas. Uh, next time, next time. Uh, and lastly, positive moments. We launched a new app for the Lunchbox crew and it's been in the works for the last number of months here, but it launched today, February 7th. And you know, it's just a way of, of more efficient communication and, and record keeping and tracking. So I'm, you know, it's, it was needed and it's just nice to have it out. And it, it's not perfect, but it's definitely a giant step in the right direction. So looking forward to continuing that, that venture and, and yeah, it's, it's just really cool to see. All right, that's it for positive moments for this week. All right folks, let's get into what's on my mind here for crop marketing. And we don't have a mailbag sponsor any at this time, I should say. If you are interested in sponsoring the mailbox, let me know. But I did get a couple of questions here from some growers and I got a question about new crop wheat basis. So this is going to tie into what I put in the email as well. Sorry, I'm just looking it up here. Looking up, where did that come in? There we go. So the, the question that came in was, you know, our Canadian US exchange is reading at the time it was about 68 cents. It's now as of recording around 70 because tariffs got kicked down. Can sure. We be looking at some new crop basis contracts or is the tariff too much of a risk to have any new crop, any new crop aggressive basis bids to have any new. So anyways, what we'll say here is should we be looking at new crop basis contracts for wheat? Okay, so I believe I've talked about this in the past, but I, I today's example in, you know, just outside of where I live. Okay. There's one and a half companies out there that will let you lock in futures and your exchange, currency exchange at the same time. Patterson is one of those. The other one, it used to be grains connect. I know they listen to the show. We'll see if they send an email to clarify. But back in the day they would let us lock in futures in the exchange. And so the example I had today and the other companies out there, they put the exchange in their basis. Okay, so today's example was so Patterson, you know, locking that in. You know, let's, you know what? Actually let's just do one right now. Let's grab one right now because the market's been moving around. So 665 is December, Minneapolis spring wheat. And I've got a 1.4307 on the exchange.307. That's a 951 futures. Wheat futures and exchange. And I'll get back to basis in a second. All right, 951. I had a chat with that location. I said hey, give me your average. Just give me an average like basis. And it's a negative basis. Just give me the average. Then the basis is a representation of the local market. Is there a lot of wheat in that area? Not a lot. How's demand doing? Do they have trains coming or not? How's folds the facility that all impacts basis, the cost to get it to Vancouver, all this stuff that's all in there, right? And so we came up with our number. We came up with 54 cents. $8.97 a bushel. All right. For number one, 13.5% protein wheat. This was 25 cents better yesterday. But 8 97. Okay, October delivery. I went to the neighboring elevators, all right. And I talked to one grower too. And the grower said he asked for an 850 from the neighboring elevator and they laughed at him and said yeah, good luck. So guess what? He sold some to Patterson. So yeah, jokes on you other grain company. And then I, I got a, the vitera number was for October is 816 for number 113.5. And they suggested you could try an 850 target. So what, what is happening here is that the grain companies will stomp their feet on this one. But they would say we don't know. We don't have anyone phoning us to buy wheat for the fall. So we don't know how to give you a basis out there. So I would say I'd argue the bids out there are, are safe bids, their bids, you know, basis levels that they feel are, you know, they don't mind owning weed at those levels. They're, they're cautious but they're not a true representation of, of what's happening. So, so the question came from Evan, like do I lock in new crop wheat basis? And the answer that, the short answer to that is yeah, when the Canadian dollar is trading at these levels, the lowest since 2003, yeah, you should be locking in wheat basis. The problem is it's February and you're not going to get a very good represent representative offer for the fall. You're not going to get the true meaning the true basis that should be offered to you. So if this was in April or June where this was all aligning, then yeah, it would make even more sense to do it. So you know, I would consider looking at Targets for basis. I would definitely consider starting and getting some stuff locked in. And you say, well, Ryan, you, you could. You complain about basis contracts. You always talk about how basis contracts are. Are scary and terrible and never to do them. And that is true, folks. That is true. You definitely need to consult with your local professionals out there because this is going to bite me in the butt because I don't know who's all listening to this, but you have to have the discipline to price those futures. So I don't mind in this environment, in this setup of this current wheat market having a basis contract. The, the problem is I have the. I have the discipline to price the sucker sometime this spring or even in the next couple of weeks here, depending on this rally. And I hope you do too, because if you just say I got a great base and you ride this thing with record Canadian weed acres and a phenomenal crop, you know you're going to be upset. You might have a good basis still, but you'll be upset about your, about your futures and your net price. Prairie farmers want to plant more wheat in 2025. I don't necessarily understand why, but that, that is the messaging out there is they want to plant more wheat in 2025. And so you could look early on here, Mother Nature is going to hold all the cards, but, you know, production. Yeah, like, there's the chance that we have a highly productive year and a big crop. And again, it's February. I can't predict the weather and tell you what's going to happen, but it's something to be aware of that farmers want to plant more of this stuff. So I, you know, all signs point to, yeah, we should be locking in basis. Should we be doing it in February in northeast Saskatchewan or in Southeast Saskatchewan or in the Peace region? Oh, man. You know, it's getting close. It's getting close to doing something, but you're just not getting that true representation. So that's where I would dangle that target out there and say, hey, let's do some math here. Like right now, if we want to do the Patterson example, like, that's 80 cents a bushel difference. 80 cents a bushel. So if you want to take that number and say, hey, you know, I'm not taking the 8 16, but with the 80 cents here, if you can get close to that, I'll lock in that basis. Right. That's just about 30 bucks a ton. So that. I think that was a 57. That's got to go to like an 87, 85. Dollars base, something like that, to be competitive. And that all day long off the combine or in the fall, let's call it October instead of off the combine. But an $85 basis, yeah, do that all day. That'd be some of the best basis you've ever locked in. But I can only do it with Patterson right now. It's at the point where Patterson's going to buy some business this year because farms will not sit back and wait for the other companies to step up. Don't worry. Those other companies, they're not sweating about it. They're not nervous about it at all. They don't care about market share right now. They're not worried about it at all. Don't. Don't worry about them. They'll be fine. They'll tell you all. They'll buy the wheat anyway. But, you know, if you want to figure out some of the best pricing opportunities, again, this Patterson thing is interesting. It's only February, though. The weak futures are just waking up. Right? We still have tariff risk. The Canadian dollar could still be under pressure. I don't think you go guns a blazing on that strategy right now. I think you keep it in your hip pocket. I think it's very, very intriguing. But don't forget momentum and where we're at in this, you don't. You wouldn't go guns a blazing on that strategy yet, either. You. You just get familiar with it and be ready to execute. So, Evan, great question. And I talked in circles a little bit, but, yeah, wheat basis is definitely on the radar. I always get nervous when a bunch of us do wheat basis together because we tend not to all win together. So just be cautious. Be very cautious. And yeah, I think it'll be a topic that we'll cover many times here over the next couple months, for sure. All right, what else did I get for. I got a question about Europe and Canola. And. Yeah, so European rapeseed market is trading at a large premium to the Canadian canola market, which is true. That spread has been very, very wide, historically wide. Is this specific to Clearfield or can canola be shipped into Europe? All right, so if it is just Clearfield, should we be seeing a more aggressive basis for it going forward? So Clearfield Canola. I, I've always. I've had a bit of a soft spot for Clearfield Canola because it's classified as a non GMO canola. So Clearfield can into Europe, could go into the food industry. The other canola that we would send there, that would go into like biofuels. Right. And so it goes into that. Into that market instead. So when you see, when you see a non GMO canola, and again, if I'm wrong on this, please correct me, but that's where that can go into the food side. And our other canola is just going into the industrial. Into the industrial side instead. I don't, I'm not seeing a bunch of extra demand for the specialty canolas or I haven't paid a lot of attention to those premiums lately, but I know it hasn't stood out for me at this time, so. No. Would you see a more aggressive basis for Clearfield? No, I don't think so. Not at this time. I think it's pretty standard out there at this moment. But those are how those two markets will be, will act a little bit different. Everyone's trying to get you guys to sign up your acres for, to qualify for, you know, shipping into Europe just because of the threat of China tariffs and US Tariffs as well. So they're getting their ducks in the, in a row here to be able to move this canola into the industrial market and in Europe. Again, that's how I see it. If I'm wrong, I'm sure someone will send me an email on that one. All right, what else did I have come across here? I'm going to, I'm going to keep that one for the next time. So let. Yeah, I'll say that's kind of the two that came across here this week. Thought there might be another one. I do want to just dispel a rumor here as well, or not a rumor, but just the suggestion. So I was told that, you know, you could no longer do the futures first contract at Patterson, which would tie in that exchange rate. But I was on the phone with Patterson this week, and you certainly can do that all the way into March of 2026. So if Patterson's in your wheelhouse, you're probably a farm that is considering making some type of wheat play here. If they aren't in your wheelhouse, not in your delivery zone, then you're frustrated and trying to get G3 or Vitera to be more competitive out. But it's just a good way to do your calculations, folks, to figure out how currency is impacting or exchange is impacting your wheat price, and you gain a little bit of perspective and clarity around more accurate pricing. All right, okay. The other thing on my mind here for crop marketing, you know, I've kept things pretty cool the last week or so through These tariffs, I've been presenting calm to the people I work with and farmers I work with. And you know, I said it in past episodes as well, where, you know, not looking at that market for a week or sitting on your hands for a week could, could pay dividends, you know, who knows as we go and move forward. But just remember, folks, momentum, focus on, on the momentum. And you know, we are now seeing some of the highest wheat prices of the year. Like, if you want to reward those, that's fantastic. Like when I got offered 632 a bushel for wheat off, you know, right after harvest and was told, you know, you got to sell. This is the price. It's not great, but it's not going to get better. And you know, all of a sudden we're, we're $2 plus, you know, better, you know, three months, four months later. So yeah, it's, there's some momentum here. Stick to your plan and there's no shame in rewarding rallies and, and especially at profitable levels like taking advantage of that. But just try to park some of the noise here because nobody knows how it's going to play out. And in the meantime, you may, may regret that sale or pressure sale or whatever it is. I know this industry in Western Canada, you guys get a lot of negativity and you get a lot of pressure tactics on you from the grain side of this industry. That's the way it works in Western Canada. But tell those folks to bugger off, take a hike, stick to your plan, write some stuff down on paper, review it, execute your crop marketing plan, okay? And try to avoid the noise. So that's what's on my mind here for crop marketing this week. All right, big shout out to show sponsor John Deere. Again, I'll turn your attention folks to harvestprofit.com that is the farm financial software that you can use on your farm to help navigate the times in front of us. This stuff isn't easy. It's challenging. The decisions you're making have large implications and we've spent some, you know, we've spent time lately here even more time this last week just dialing in some of our scenarios here for 2020 in harvest profit. It's a tool that we use to track our farm financials and links up fantastic with John Deere operations center. So if you're already doing the JD Ops thing, check out harvestprofit.com and give that a look. Especially if you want just a little more peace of mind as you create your 2025 farm business plans. All right, thanks a lot to the folks over at John Deere for being such a great sponsor. Alrighty for eating your veggies for this week. I have, I'm gonna write them down here as I'm recording but I, the first thing I would, I would recommend and eating your veggies be, you know, it's the right thing to do or that's the slogan anyway is, you know, a crop rankings calculator. If I don't know if you have one yourself, but I've been playing with crop rankings this last week and I've been doing my version of tariff exempt crops or tariff free crops or whatever you want to call it, but just making some adjustments. We've seen some specialty crop prices come out and get more aggressive. You know, we saw maple pea price climb, green pea prices climbing. We saw some other malt offers come through. There's been a lot of different wheat prices have climbed. So just starting to tweak my crop rankings calculator and a few different crops I've stood out as leaders. So if I think it's a very, a very good exercise for, for you to do as well. And so I'm going to put that down as number one for eating your veggies to just refresh your crop power rankings and even make one in regards to tariff crops that will not be or will be least impacted against crops the most impacted. All right, give it, give that seeding plan a little, a little love here in, in early February. The second thing I have for this week, you know, I would say from a, from a sales perspective, I, I do think that as basis levels on wheat approach some historic values here, some very strong opportunities for the fall. Like I would recommend that you have some targets out there that you don't take face value on those basis targets, but you would consider those and, and maybe again use the math we talked about in the episode to come up with, with what makes sense in your region. But you should, should be looking at locking in some of your best fall basis that you have ever seen on your farm. Like that if you see a number and you're like man, I don't remember that. I don't remember ever seeing that. That's a good thing that you want to consider. So I'm going to say basis targets for wheat, for hard red and for cps. I do like that. And my last one, I'm going to give a shout out to those folks out there with give a show to JGL number one on the brokerage side. But, you know, as Chuck mentioned earlier in the episode here, we, you know, we have a, a year ahead of us that is full of, of whiplash headlines. And you know, the, the, you have tools available, you know, for you when it comes to a crop marketing plan. But again, if you are hesitant to look at opening a futures trading account, you don't have to do futures, you can do options. But the folks at JGL Capital, you know, reach out to those types of people and open up that toolbox for yourself. Give yourself a chance here to make, you know, maybe decisions that are less stressful. Maybe you take a bit of stress off knowing that, hey, I can sell canola and just figure out a strategy to remain bullish if the opportunity presents itself. I, I can, you know, go in and, you know, maybe there's a strategy against protecting against a higher Canadian dollar so that you allow yourself some of the best basis opportunities on wheat. Like there's lots of things that those folks look at. And I just think I, I'll say it every single year. It doesn't matter what the circumstances are, but it just opens up your, your entire portfolio here, your entire toolbox for a successful crop marketing plan. And hey, avoid the noise, all right, number four for this week. Avoid the flipping noise out there and look at momentum, all right, that's eating your veggies for this week. All right, folks, that's it for episode 62 of this Week. A big thank you to Chuck Penner for joining me and talking tariffs the topic on everyone's minds. But yeah, thanks for joining me, Chuck. Appreciate it. Thanks to you for tuning in to the episode. And that's it for me. Episode 62. I'm out.