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Trump Trade War – Canadian farmers feeling the brunt

Steel News - Published on Fri, 13 Jul 2018

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Global News reported that Saskatchewan based farmer’s buying intentions have shifted in light of tariffs imposed by the US. Chad Doerksen, a fourth generation farmer who works in the Hanley area who was considering upgrading and adding to his fleet of equipment in the near future with a new sprayer, combine and tractor, said “You don’t want to buy high and sell low. Yes I’m looking to do some more purchasing but right now I’m just holding off to see how things evolve.”

At Moody’s Equipment in Saskatoon, current inventory is unaffected by tariffs but when it’s gone, all equipment will be priced much higher and the dealer isn’t planning to brunt any of the increased cost. Moody’s GM, Kim Leland, said “The exchange has gotten so, the price has gotten so high that the margin has eroded, eroded, eroded so there is no margin so if we got charged as a dealer, CAD 50,000 more for the combine, we have to pass that on because there is no buffer anymore.”

But according to Steve McLellan with the Saskatchewan Chamber of Commerce, there’s potential farmers also won’t be able to carry those cost increases. He said “Everybody feels it, the business and their customer. If you take the price of a combine at CAD 550,000 and you may add 10 per cent to that, that’s significant. That’s CAD 55000 more. Once you’ve increased your price by 10 or 15 or 20% it makes your market very confused to next year so ‘oh, well, we’re dropping our prices by 20% because steel has gone back to normal. Nobody knows what normal is going to look like in a year so it’s a very volatile market. A lot of our customers are having to re-look at that plan and go ‘okay, are we going to push our buying forward now into 2018 and buy non-tariffed equipment now or are we going to wait it out? and if we wait it out, how long are we going to have to wait?”

Federal agriculture minister Lawrence MacAulay said the situation is unfortunate. He said “Farmers right across North America are fully aware of how valuable free trade is and how valuable it has been. What we want to see happen is the free flow of trade.”

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Posted By : Rabi Wangkhem on Fri, 13 Jul 2018
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