Trade Changes USMCA

[Klause]

From the sounds of it the new nafta will make us and Canadian grain equal.

And a bunch of guys think this is great.


Except we are now officially no longer a premium market, won't get premiums at all for any cereals and on top of that are competing with a country that has far superior logistics infrastructure.


Way to go!!!

[jazz]

From the sounds of it the new nafta will make us and Canadian grain equal.

And a bunch of guys think this is great.


Except we are now officially no longer a premium market, won't get premiums at all for any cereals and on top of that are competing with a country that has far superior logistics infrastructure.


Way to go!!!

Very little american grain will come north. Why would it when it can go south on rivers and to market way cheaper than ours?

Premiums on cereals died long before any of this nafta stuff happened. Thats a result of millers using lower quality mixes and poorer countries not being able to afford better food.

The dream of high quality premiums is just a dream now. We need to adjust. Most guys are switching over to super high yeild HRS and forgetting about quality.

[Klause]

Very little american grain will come north. Why would it when it can go south on rivers and to market way cheaper than ours?

Premiums on cereals died long before any of this nafta stuff happened. Thats a result of millers using lower quality mixes and poorer countries not being able to afford better food.

The dream of high quality premiums is just a dream now. We need to adjust. Most guys are switching over to super high yeild HRS and forgetting about quality.

Why? Because American grain coming in will make ours cheaper. Unifying grading standards means no more 2 or 3 or 1 in wheat. .

And you're right since the end of the cwb we haven't had anybody push quality.


Growing "super high yield" wheat in Canada is a joke.

We can't get it to market cost effectively. How do you think we will compete with countries like Argentina, where the national average is 70 bu/ac and it costs 17 a metric tonne from farm gate to boat

Or the FSU where wheat yieldsre routinely over 100bpa and they have export freight subsidies.


This isn't about their wheat coming here (though I could see a trade war with them plugging our elevators on purpose... Anyone remember RCALF ?

Its moreso about lowering our wheat to US standard which you end up loosing that 60 cents a bushel we gain on bids of 2rs or higher shiploads... Get ready for all wheat to be at feed value.


We can't compete on volume.

We can't compete on reliability

We used to be able to compete on quality buy not anymore



So what are at going to sell on????


PS: high yield RS wheat like Brandon still has very desirable milling characteristics...

More and more people can afford better quality food.


We just are not even players in those markets anymore.

[blackpowder]

This post will surely resurrect the board supporters on here.
Before they get stupid on here, would someone explain briefly what this does to grain trade?
Googling it got no concrete info. Thanx.

[macdon02]

Very little american grain will come north. Why would it when it can go south on rivers and to market way cheaper than ours?

Premiums on cereals died long before any of this nafta stuff happened. Thats a result of millers using lower quality mixes and poorer countries not being able to afford better food.

The dream of high quality premiums is just a dream now. We need to adjust. Most guys are switching over to super high yeild HRS and forgetting about quality.

There's some absolute race horse varieties of hard red spring south of the border. Croplan and Winfield seem to have the best. Consistent triple digit yield

[fjlip]

Was grain a bargaining point with the US? Or did f*cking liberals deal us in to save eastern Canada?

[Klause]

The USA will regulate our exports of dairy to the world, and we will be forced to charge export duties on our own product - to the world (not just the USA)... Wow.

[jazz]

The prediction is that american imports to canada will double under this agreement, to a whopping 100,000 tons. This is no threat.

This will help to ensure elevator prices are the same everywhere and only adjusted for currency. When the CWB existed the price in montana was always higher than just the currency adjustment.

Americans are not going to abandon their world class logistics system to come up here. This is first rate fear mongering.

[jazz]

The USA will regulate our exports of dairy to the world, and we will be forced to charge export duties on our own product - to the world (not just the USA)... Wow.

How exactly is that going to happen? Vietnam and Belgium have the same dairy access as the USA now. We werent worried about them controlling our milk market.

[Klause]

How exactly is that going to happen? Vietnam and Belgium have the same dairy access as the USA now. We werent worried about them controlling our milk market.

Because Canada didn't agree to report to them all of our international milk trade, and self-impose tariffs on exports.

See below, text of agreement.

Notwithstanding paragraph 4, Canada shall ensure that the prices for non-fat solids used to manufacture milk protein concentrates, skim milk powder, and infant formula shall be no lower than the applicable price determined by the following formula:
(The USDA nonfat dry milk price minus
Canada’s applicable processor margin) multiplied by
Canada’s yield factor.
6. Paragraph 5 shall not apply to domestic sales of milk components for non-human consumption, such as for use as animal feed.
7. Canada shall monitor its global exports of milk protein concentrates, skim milk powder, and infant formula and provide information regarding those exports to the United States as specified in paragraph 12.
8.
(a) In a given dairy year, if the total global exports of milk protein concentrates and skim milk powder from Canada exceed the following thresholds:
then, Canada shall apply an export charge of CAD 0.54 per kilogram to global exports of these goods in excess of the thresholds set out above for the remainder of the dairy year.
(b) In a given dairy year, if global exports of infant formula from Canada exceed the following thresholds:
then, Canada shall apply an export charge of CAD 4.25 per kilogram to global exports of these goods in excess of the thresholds set out above for the remainder of the dairy year.

12. Further to paragraph 7, Canada shall make available to the United States data regarding Canada’s global exports of milk protein concentrates, skim milk powder, and infant formula, at the six digit HS Code level, on a monthly basis, and no later than 30 days after the close of each month.

[Klause]

The prediction is that american imports to canada will double under this agreement, to a whopping 100,000 tons. This is no threat.

This will help to ensure elevator prices are the same everywhere and only adjusted for currency. When the CWB existed the price in montana was always higher than just the currency adjustment.

Americans are not going to abandon their world class logistics system to come up here. This is first rate fear mongering.

I'm literally slamming my head into my desk at this.


We will never get direct USD pricing, I believe the big thing was once the CWB was gone, that'd happen.

Instead, we are at a discount to MGEX, have high basis levels and shitty movement.

THE CWB WAS A DISASTER the way it was - no questioning, but this mirage of an open market you think we have is a bigger joke.

Argentine farmers, after their export tax, get paid more for a bushel of wheat than we do... Where's the open market?




Here's the special addendum between Canada/USA on Grain.

Each Party shall accord to originating wheat imported from the territory of the other Party treatment no less favorable than that it accords to like wheat of national origin with respect to the assignment of quality grades, including by ensuring that any measure it adopts or maintains regarding the grading of wheat for quality, whether on a mandatory or voluntary basis, is applied to imported wheat on the basis of the same requirements as domestic wheat.
2. No Party shall require that a country of origin statement be issued on a quality grade certificate for originating wheat imported from the territory of the other Party, recognizing that phytosanitary or customs requirements may require such a statement.
3. At the request of the other Party, the Parties shall discuss issues related to the operation of a domestic grain grading or grain class system, including issues related to the seed regulatory system associated with the operation of any such system, through existing mechanisms. The Parties shall endeavor to share best practices with respect these issues, as appropriate.
4. Canada shall exclude from transport rates that are subject to the Maximum Grain Revenue Entitlement, established under the Canada Transportation Act, or any modification, replacement, or amendment thereof, agricultural goods originating in Canada and shipped via west coast ports for consumption in the United States.
.

[Braveheart]

The language in the agreement for grain looks pretty good to me. It gives the reciprocity needed between US and CA on grades and that had been a trade irritant. I like that they recognized that rail rates for CA grain was an entitlement only for CA grain and not to be used for transshipment of US origin grain.

As far as premiums, buyers and sellers will decide the bids and offers, as has always been, even under the CWB.

I don't see any change to the requirement for CA grain to have an end users certificate going into the US. Not surprising as CA grain shouldn't go to US programs like state mills, PL480, etc.

I live on the border and can tell you there won't be US wheat moving north. None. Klause, you and the NFU can chill.

[walterm]

The language in the agreement for grain looks pretty good to me. It gives the reciprocity needed between US and CA on grades and that had been a trade irritant. I like that they recognized that rail rates for CA grain was an entitlement only for CA grain and not to be used for transshipment of US origin grain.

As far as premiums, buyers and sellers will decide the bids and offers, as has always been, even under the CWB.

I don't see any change to the requirement for CA grain to have an end users certificate going into the US. Not surprising as CA grain shouldn't go to US programs like state mills, PL480, etc.

I live on the border and can tell you there won't be US wheat moving north. None. Klause, you and the NFU can chill.

In CDN $ what would you get for same wheat today on both sides of boarder? Say #1 cwrs 13.5 px in Canada compared to # 1 HRS 13.5 in USA?
Now since we are selling by variety on affidavit what would you get for OSLO which is classed as CWRS in Canada compared to in the USA where it is classed as HRS.

[Klause]

The language in the agreement for grain looks pretty good to me. It gives the reciprocity needed between US and CA on grades and that had been a trade irritant. I like that they recognized that rail rates for CA grain was an entitlement only for CA grain and not to be used for transshipment of US origin grain.

Why are you so eager to make the Americans happy???

America is a competitor not a customer in wheat trade... And at that, a low quality exporter.

An Argentine farmer is getting $8 CAD/Bu for wheat. we are getting $6. We used to be the premium export market.

As far as premiums, buyers and sellers will decide the bids and offers, as has always been, even under the CWB.

I don't think you understand... if we don't have a premium product to export, we may as well stop growing wheat, or get used to breakeven or at cost production... nobody wants glyphosate treated, fusarium infected, or ergot infested product. Especially not the EU and those other "premium" markets we need in order to be profitable.

I don't see any change to the requirement for CA grain to have an end users certificate going into the US. Not surprising as CA grain shouldn't go to US programs like state mills, PL480, etc.

No, and I agree with you on that. It also means that we won't be able to sell "saskatchewan durum" to a foreign customer, because we won't be able to certify that it's Canadian crop (since we can't have that on a declaration).

I also see this as a step backwards... other countries can trace every load of grain back to the field it came from, and we won't be allowed to trace which country it came from??? If it's being used domestically I don't see it as a concern but when selling into export markets - some of which are sensitive to US... "involvement"...

[macdon02]

The USMCA preserves the trilateral nature of NAFTA, which reduces uncertainty in the region.*At least some pent-up investment may be deployed as a result. The deal also reduces risk premium and is therefore supportive of Canadian assets such as CAD. It also clears the way for the Bank of Canada to continue hiking (we expect the next hike in October). USMCA constitutes a win for US president Donald Trump and reduces the risk of escalation of global trade wars, as it provides a path for other trade deals such as an eventual US-China agreement. David Woo believes this agreement could send US rates higher and that it is bullish for cyclical assets.

BOC is essential handcuffed to raising rates in sync with the Fed. This one might be a giant slayer. Get ready for normalized, ie 8-10%

https://www.zerohedge.com/news/2018-10-01/heres-what-inside-trumps-wonderful-trade-deal-canada-and-mexico

Currency manipulation also mentioned. I believe we just blew our head off. The implications to provincial debt levels is astronomical. Obviously there was no consultation with BOC and provinces. This is massive.

https://nationalpost.com/news/politics/andrew-coyne-the-wolf-is-really-at-provinces-door-pbo-fiscal-report-warns

Provincial tax increases and higher interest rates will consume any possible growth we can muster