The name January is derived from the Roman god Janus. Janus was said to have two faces, one looking forward and one looking back. It is an appropriate metaphor for the month where we can look back at the year that was and anticipate the year to come.
If there is such a thing as a good disease year in the hog sector, 2024 was it. Given historical patterns, we expected to see new cases of porcine epidemic diarrhea (PED) this past spring. That did not materialize. While we did not make it though 2024 PED free, the first case did not show up until December. This is not an accident. Manitoba’s hog farmers, our government, veterinarians, and processors came together to develop a comprehensive plan to eradicate PED. The “Manitoba model” is a 2024 success story - one that is being considered throughout North America and is a testament to what can be done through collaboration.
On the economic front, 2024 was a year of relief for hog farmers in Manitoba, with margins coming back to where they should be. I do see the positive financial situation extending well into 2025, but that prediction comes with a lot of global uncertainty and unpredictability.
So, what will farmers face in 2025? One cannot look ahead without mentioning the new administration in the U.S. Most farmers in Manitoba depend upon international markets. Take the hog industry as an example - 90 percent of Manitoba’s annual production is directed into international markets, with the U.S. being the number one destination. Both major U.S. political parties advocate for “America First” policies and are moving away from supporting free and open trade. Examples of protectionist policies that threaten our exports include the revival of country-of-origin labelling and individual state legislation that is fragmenting the North American market (e.g., Proposition 12 in California).
“America First” was brought into sharper focus after the November election in the U.S. when President-elect Trump called for massive tariffs on Canadian and Mexican exports. In the past, he has threatened to rip up the Canada – U.S. – Mexico Agreement (CUSMA). Not since the original Canada – U.S. trade agreement have we seen political goals tied to U.S. market access. For example, increased defense spending by Canada is likely going to be a condition of ongoing American support for CUSMA. I do believe that Canadian agriculture exports are going to be a target for U.S. negotiators. How is Canada going to respond?
It is not just trade with the U.S. that will be unpredictable in 2025. China, which is both the world’s largest food producer as well as the world’s largest food consumer, is also signaling that agriculture and food trade will be tied to outside policy issues. The threat to impose tariffs on Canadian canola exports in response to tariffs on electric vehicles is just one example of this. What happens if a new trade war erupts between the U.S. and China? Will Canadian farmers be caught in the middle? How Canada responds could very well determine if 2025 will be profitable or show a mess of red ink on farmers’ income statements. Governments and industry need to be planning for all eventualities on Chinese trade before any of these potential problems arise. I am concerned that this is not happening.
Add to this the ongoing uncertainty caused by the war in Ukraine, the threat of foreign animal diseases like African Swine Fever, production risks, etc. and a picture of a volatile 2025 emerges. Farmers can offset some uncertainty through tools like currency hedging, forward contracting, and other risk mitigation approaches, but farmers cannot control instability caused by global policies. This is the area where we need the support of our federal and provincial governments.
It is my prediction that protectionism, trade barriers, and global uncertainty will be the top topics next January when we look back at 2025. We will also likely be talking about the outcome of a federal election, which may happen sooner rather than later. Elections are the time when politicians are most attentive to concerns raised by constituents. Farmers, of all stripes, need to be asking the candidates who show up on their doorstep about their party’s plan to deal with global volatility and trade uncertainty.
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