RealAg Politics, Ep 6: Dairy trade, wheat exports, and escalating inflationary pressure

(Kara Oosterhuis/RealAgriculture)

There is so much happening right now in the world of politics and trade, whether it’s dairy disputes, the wheat market, big decisions for countries on what they are doing with exports, massive inflation, and more.

Al Mussel, research lead with the Canadian Agri-Food Policy Institute (CAPI), joins hosts Shaun Haney and Kelvin Heppner on the latest episode of RealAg Politics to break it all down.

SUMMARY

  • A lot of focus right now on wheat, and India limiting exports
  • There is a hyper focus on food security right now
  • In a lot of developing countries, they get most of their caloric intake from wheat products
  • Are we at the peak of the wheat shortage getting so much mainstream attention?
  • There’s a lot of reports of thefts of different crops in the Ukraine right now, that’s a problem, too.
  • Are we going to see more countries doing what India is doing? There’s a lot of inconsistency and confusion in the market place.
  • Exports are almost starting to look like COVID-19 vaccines were looking for awhile there, across the world. Inadvertently making the situation worse?
  • Countries are going to be inclined to fall back on their individualistic principles…what’s going to be good for me, today?
  • There are parts of the WTO that deal with conflict, but they’ve never really had to be tested out before
  • There are also countries looking at reducing tariffs they had in place, because they are trying to fight inflationary pressure. This is something we could be seeing more of, as well
  • There’s a very long list in play of countries that have exports restricted. Is it unprecedented? Mussel says yes.
  • We have our own sanctions as well, especially when it comes to eastern Canada, and getting fertilizer out of Russia and Belarus.
  • Just as much as energy drives geopolitics, fertilizer drives geopolitics.
  • What would it take to have Canadian urea from the west, in the east? Do we have the political will to do this, or is it too big of thinking for where we are at right now?
  • There’s some logistical challenges too, as well
  • As our input costs have gone up, the value of our crops have gone up as well, too. However, we still need to be able to cash flow these high inputs.
  • When you’re in a cycle of inflation, everyone wants to buy everything right now, before the cost goes up even further. Which of course, ends up making the situation worse
  • Both New Zealand and the U.S. are pushing on Canada’s interpretation of dairy tariff rate quotas.
  • There was three pages alone that dealt with what the term allocation even means…there’s a lot there

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