The Water Table
The Water Table
#124 | Who Pays? The Impact of Tariffs on U.S. and Canadian Ag
What do tariffs mean for relations between the U.S. and Canada? Toban Dyck, an Ag Journalist and fifth-generation grain farmer from Winkler, Manitoba, joins us for a conversation about the ripple effect of tariffs on agriculture. Toban breaks down the importance of strong relationships, communication amidst uncertainty, and how Canadian producers and U.S. importers may be impacted.
Chapters:
00:00 Introduction: Toban Dyck & Tariffs
03:04 Understanding Tariffs: A Basic Explanation
04:36 The Devastating Effects on Canadian Markets
07:46 Potash and Manufacturing: Key Trade Factors
11:10 Seeking New Markets: Canada's Response
14:04 The Great Plains: A Borderless Agricultural Region
16:24 Maintaining Strong Relationships
17:35 Government Changes and Responses
19:58 Finding the Silver Lining: Wake-Up Call for Markets
21:44 Toban's Family History: Fifth-Generation Farmer
24:12 Farm Evolution: From Livestock to Grain
26:13 Returning to the Family Farm
27:24 Family and Farm Life
28:53 The Uncertainty of Tariffs: How Long Will They Last?
30:35 Hopeful Connections and DC Lobbying
31:27 Seeking Resolution: Value of U.S. and Canadian Relations
32:19 Closing Remarks
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Jamie Duininck (00:00):
Today on The Water Table podcast, I'm interviewing Toban Dyck. Toban is a grain farmer from Winkler, Manitoba, and also a journalist on agricultural issues. We are talking about tariffs. As we all know, that's the front and center of our minds when it comes to US-Canada relations. We also are talking about the fact that Toban is a fifth generation farmer and how his family has progressed through those generations in Central Manitoba.
(00:37):
Welcome back to The Water Table podcast. I'm Jamie Duininck, the host. And today, I have Toban Dyck with me. He is a trusted and respected voice in agriculture. He is from Winkler, Manitoba, and he has more than two decades of experience in agriculture. He's a farmer. He knows the first-hand needs of agriculture in the industry and how to exceed them. Toban is also a fifth generation. He is a fifth generation to run his family farm. I want to talk about that a little bit today up in Canada and what that was like and what the stories he hears.
(01:13):
But Toban is award-winning writer and a national agricultural columnist in Canada with additional experience writing outside of the sector. He has many years of experience working with provincial and national farm groups to effectively communicate their values, extend their research to farmers, and better engage the industry lawmakers and the public. He is passionate about what he does. Toban also co-hosts a podcast called The Extensionists. Toban, welcome to The Water Table. Appreciate having you today.
Toban Dyck (01:48):
Thanks, Jamie. That was a very flattering introduction.
Jamie Duininck (01:51):
Well, you've earned it from what I hear from my colleagues and contacts up in Canada, and excited to have you on today. Today, we're going to make, at The Water Table, most of the time we talk quite a bit about water and agriculture and water management and agriculture. With everything going on in our world today with tariffs, the relationship when it comes to the economy and tariffs between the US and Canada, it seemed like a good topic for us to dive into here on The Water Table.
(02:26):
A lot of American farmers and those of us that are connected to agriculture hear this term pretty much every day now, but our actual knowledge of it and our deep understanding is pretty light. So, I thought it would be a great opportunity just to share and talk a little bit. So, want to give you the floor a little bit, but let's talk a little bit about tariffs and maybe start at the beginning of we know what a tariff is, but how do we think about that as a Canadian farmer or an American farmer, those of us that are involved in agriculture?
Toban Dyck (03:05):
Yeah, no, thanks, Jamie. Happy to talk about it. First off, going to say that I haven't got everything all figured out. It's a confusing landscape for me as well. But I will say that throughout the winter months here, conference season in Canadian ag, and I've been attending lots of events. Every time there's an economist that gets up to the podium and talks to the crowd, no matter how kind of educated or in the know that crowd is about what's going on in Canadian ag, each one of those economists feels compelled to start with a basic, almost like a preschool or a fifth grader definition of what a tariff is.
(03:51):
And there's a sense of they're coming at it from, I believe they wouldn't say that if they felt a lot of people weren't confused about what it is. I think they feel compelled to say that when the US imposes tariffs on Canada, it's not something that the Canadians pay for directly. It is something that the importers in the US pay.
(04:19):
So, that cost is on the US and that's a tariff. That's a tax that goes to your government, and then the government can distribute that as it pleases. But the effects on the Canadian market are indirect, so it's a matter of lessening demand, lessening interest in products. It encourages maybe some US importers to explore other markets or other sources for the same products if those products can be sourced elsewhere.
(04:57):
To start, it's kind of getting one's head around that. So when you start to talk about the effects on Canadian markets, it's devastating. It's not a good thing for us. We don't want tariffs, and we want to actively find ways to lessen them but it's not so clear.
(05:29):
I chatted with an exporter in the horticulture industry out of Ontario, and their relationship to US tariffs are very direct. You have somebody who grows, let's say, onions or something like that, and their customer is in Maine or directly across the border, and they'll talk to them. They talk to them regularly. So, they have a much more one-to-one relationship with these tariffs in the sense that if they stay at 20 to 25% for an ag product, they can work together as partners to make up that cost, that there's a bit of flexibility there.
(06:15):
But if it goes to 50, then it's quite damaging, and they feel some of those importers would try to source out of the Pacific, yeah, out of the Western US. But yeah, long answer to that first question, but it's a complicated maze to sort through.
Jamie Duininck (06:40):
From my perspective, living in Minnesota and having Canada as a border, what I see on a regular basis and have seen for years and years is really on the equipment side. Even our company, Prinsco, has bought some bins that are usually used for grain bins, but we're using it to store resin, but that are manufactured in Canada. But it seems like there's more of equipment type material that's manufactured in Canada that is what I see as being the potential tariff situation, whether it's grain carts, grain bins, those kind of things.
(07:23):
But there is so many other agricultural products and maybe you can speak to just some of your personal experience with what you're hearing and seeing with where we're going to have significant maybe surprise or a tariff that's just going to impact more people in the agricultural market than what they expect.
Toban Dyck (07:46):
Yeah. I think you touched on something important with manufacturing. You have these raw products like steel and things like that. That's a big... I mean, potash, of course, in the fertilizer market. I mean, US needs Canadian potash, so that's something that I feel like the Canadian ag market and the people who are playing this out in a macro level in Canada are using that as their card. It's their card to play. That's a significant product that is tethered to US.
(08:27):
But you think about the manufacturing's big, and especially in my area, in the Winkler and Morton area, I mean, there's tons of ag manufacturing here. There's lots of people who are making equipment. And for them, what I've seen anecdotally is there's just the effects of that uncertainty are huge.
(08:54):
If you think of you run a business, I run a business, you think of your planning for 2025 or 2026 even, it's really hard to look ahead to forecast what you're going to do. Are you going to... Maybe the trajectory was to ramp up production for 2025, and then all of a sudden, all of this comes into play and that changes things significantly, what does that look like for a Canadian business.
(09:27):
US-wise, in North Dakota, the other side of that story is I'm involved in the pulse and soybean commissions here in Manitoba, and they talk with their North Dakotan friends who are all of a sudden made a whole bunch of crush facilities, soy crush facilities that have come up and are coming up. And there was the dream or the hope of all of those was a close relationship with Canada. That's part of their catchment for soy is coming in and for meal going out to service our hog, our hog industry here.
(10:15):
It's so interwoven is the relationship for many, many products that it's really hard to parse out. Some things go back and forth many times before they are what they're intended to be, and then other things are just kind of mutually reliant on each other. So, there are some cases where it's just, "Hey, you need a product from us or we need a product from you, and we get it in." But in a lot of cases, it's much more complicated than that. So, it's a real mind bender to figure out what that looks like.
(10:57):
But the uncertainty is the big thing. There is a way forward. It's not necessarily doom and gloom because we... Canada does have other export markets, so definitely it lights a spark under our butts to strengthen those markets and even look for more. But there's also, equally if not more so, greater passion for figuring this all out.
Jamie Duininck (11:28):
How do we get this back on track to have this relationship, which makes a whole lot of sense in a better place. Yeah. I think as you're talking, it wasn't something I was going to bring up but I don't know how many Americans, because so much of America's population is far away from the Canadian border. Whereas Canada's population, is it like 70% of Canada's population is within 150 miles of the US border, right? So, the Canadians understand much more than the US does that the US side of the Canada border for the most part is very rural across the entire border.
(12:14):
So when we want to build these rural economies, those in your example, I wouldn't have thought of it without your example of the soybean crush plant, but those plants, I'm assuming, and I think I'm probably right on this, I'd done no research, but they would not make sense to build one of those plants in Walhalla, North Dakota or Grafton, North Dakota or something because of the population base, if they weren't able to send some of that meal into Canada as an export market, because there just isn't enough people there to make it make sense for a geographical location.
(12:53):
But what it does when you build that in the rural locations, it builds that small rural economy and it builds a tax base and employs people that want to move home to be where they grew up, and that's their choice. So, that's part of what we've been passionate about at Prinsco and at The Water Table is just building a rural economy. Because what that does is it creates a tax base, and that tax base build schools and hospitals, and the community leaders then build churches and whatever in those communities and build a vibrant community.
(13:29):
You see that in places, if you've never been, like Winkler and Morton, which are two small towns in Canada that are very vibrant small towns because they have the economic base. So, it's an interesting point I hadn't thought of around the American side, and that the rural economy and building certain manufacturing plants that the products are then shipped back into Canada is really the only viable way to even decide to build that plant in those rural American economies.
Toban Dyck (14:05):
Yeah, it is interesting. I know, in one sense, we have our countries, US, and we have Canada, but in the ag sector, at least among certain people, we like to think of it a bit borderless in a sense. If we're going to draw regional lines or put some parameters on things, it'd be more like the Great Plains. So, we share so much across the Great Plains, and you think of water management, very, very similar, and growing regions and even crop varieties and all that kind of stuff is our traits that are shared into Manitoba, into Saskatchewan, and then down to cut through the US in this interesting little curved region.
(15:00):
So, I think that's a really interesting... I think we dream a little bit that would be all open and shared, because there is so much that we have in common in those areas. Even to feather onto what you're saying, building these economies, it makes sense to treat things that way. Right now, we're faced with a unique challenge.
Jamie Duininck (15:26):
Yeah, yeah. One of the things we're doing in North Dakota and northern Minnesota is there's a lot of water management happening along the Red River. Canadians can be happy that we're sending our water north in the Red that is clean water from the standpoint of we have a great subsurface water management system in place, which is unique when you get to the Red River across the border. It just doesn't seem like that practice has been as well accepted there. You got to go to the west toward the Winkler-Morton area before you start to see it really adopted in a big way. I just had to get a plug-in there for water management, but Americans might be not the favorite people of Canadians right now, but we're sending precious clean water up the Red to you.
Toban Dyck (16:25):
Yeah, no, that's awesome. I mean, I think on a B2B level, on a person-to-person level, I think those relationships are still quite strong in Canadian ag, especially from what I hear. Just a matter of... Yeah. Thanks for the clean water, I should say. I totally understand the plug. You got to make the plug, take the plugs. But no, I think there is... What kind of... [inaudible 00:17:00] would I be to say there isn't a path forward? Of course, I think there is. I think there is. It's just what that is, I'd love to provide some insight.
(17:10):
It's tricky for us now in Canada too because we're going through a government change, so we haven't had a really strong... Trudeau announced his resignation before these tariffs were announced, so we haven't had a really strong response or as strong of a response as maybe we could have or as a balanced response. It's tricky. It's tricky for us. Canada's always... We kind of like being the underdog. We always think of ourselves as having great potential but always having it unrealized. That's our happy place.
(17:58):
We always like to think we're bigger than people think we are, but we have yet to figure out ways to really flex that muscle in a way that makes sense for who we are as a nation. So, that comes up again too always at these conferences. We try to unite and what should be our response to this.
Jamie Duininck (18:24):
Yeah, no, that makes sense. I think too, from my perspective in thinking through these things, I think human nature is always to... We want things to be consistent in what we know and not have something out there that... Obviously, you've made it really clear and it's totally right that when it gets hard to plan for the future and know where you're going, that's a very complicated thing.
(18:52):
However, the old saying goes, if you're always going to do what you always did, you're always going to get what you always got. That's, I think, shakeups these things as though they can be scary. There can be an outcome that you can't see yet that is far better or is easier to navigate, whatever that might be, that for future farmers and future generations could be really good. So, that's my hope in a lot of this stuff that's happening, that you shake something up and just look at it from a different angle and see something that you never could have saw unless you thought about it from that standpoint.
Toban Dyck (19:38):
I mean, I 100% agree with you. I've asked to comment shortly after the tariffs were announced that I was... I'm so reticent to say that there's a silver lining to all this because it gives it a bit of more credibility that I want to give it, but I agree with you 100% because these shakeups are good. Their flux is inevitable, and I think we need to... If there's a silver lining on our side, I think it's a wake-up call, and I think there are things that the market's been a little bit complacent about over the last number of years that it might not be so much anymore.
(20:29):
So, I think that's a good thing if we can be a little bit more intentional about some of all that. I can't even give you an example, but even export market development for us, building those relationships, not being too casual about our relationship with the US, being very intentional about all those elements, and then being very intentional about cultivating strong export markets elsewhere so that we're not so vulnerable.
Jamie Duininck (21:05):
Yeah, for sure. Well, I appreciate talking about that. I wanted to ask you a little bit about a fifth generation farm. There isn't a lot of people out there that can say that. And when I think of that and I think of Canada in five generations ago, what that was like, your ancestors had to be some tough hearty people to be willing to go out and break the ground and get started in that way. But fifth generation, what does that mean? How long has your family farm been in business?
Toban Dyck (21:46):
Yeah. I think 1886 is when the first one came and settled in this area. Apparently, it was a sod house and too bad there aren't pictures of that. Just piecemeal accounts of all these things. I'd love to know it all. I'd love to know everything. What did that sod house look like? What was inside of it? All that. How do they survive our winters is what I want to know.
(22:29):
Because when my wife and I are sitting in our house and it's -30 Celsius and there is 100 kilometer an hour winds blowing, and I can't see anything. I can't imagine what that would've been like. I mean, I'm still concerned about our overhead power lines going down. But, I mean, it's a fairly... If they do, I have a jet backup generator so it's not the end of the world, but I couldn't imagine having... You'd feel so alone and powerless.
Jamie Duininck (23:01):
Yeah. Well, I know exactly. I split some wood on Sunday for about 20 minutes and my back is still sore. I mean, that would've been an hour a day every day just to keep up in that kind of winter. I'm fascinated by that stuff and watched some documentaries and things, and just the fortitude and resiliency of those people. You can be very proud of your family. Heritage is quite impressive, whether it's there in Ohio is really impressive in that time.
(23:38):
But when you start going further and further north, and that winter season lasts... Some years still, it starts in October and ends in April or May, so it's a long time. It's just really, like you said, you would love to know more, really impressive. But tell me just a little bit about then from the start, and in a quick way, how did that develop over the generations and what does your family farm look like now.
Toban Dyck (24:16):
It's a good question. It started as a grain operation. I'm not sure offhand when livestock was introduced, but it was, for a spell, so sod, it had to... I'm sure it was like an [inaudible 00:24:33] factory, two-story home that was delivered to the farm at some point. So, that wooden structure still is on my property. I have dreams of restoring it at some point, but that's going to take a little bit of extra cash. Anyways, it's there and it was used for a granary, but built from 1900. That's still there. The grain, the land base grew with each generation a little bit. I think probably most exponentially with my parents, that land base grew most.
(25:16):
Livestock, I think my grandpa had a little bit. My dad certainly grew cattle. I think at its prime or at its largest, we had 500 head of cattle and about 1,200 hogs. He was in that business quite a bit. As a need to diversify too. When he took it over from my grandpa, then there was a need to diversify those income streams and make it viable for two families to live on the farm for a spell. And when I turned 18, not that they had anything to do with each other, when I turned 18, my parents sold the whole livestock operation, cattle and hogs. I mean, didn't look back. That was...
Jamie Duininck (26:12):
It was an everyday thing, yeah.
Toban Dyck (26:14):
That was a good move on his part. Yeah. Since then, that would be 1998, since then, it's been grain. I moved away from the farm around that time when I was 18, and became a journalist and worked in various markets in Canada. And then, my wife and I moved back to the family farm in 2012 from Toronto, moved straight back to the family farm and we've been taking it over ever since. So, I run our own farm corporation, and I have another agricultural communications company that is... That's my livestock. That's my diversified income.
Jamie Duininck (27:02):
Yeah. Awesome. Awesome. What does your family look like? Do you have children and...
Toban Dyck (27:10):
No children. Just two dogs. That's our lives. Yeah.
Jamie Duininck (27:15):
Yeah, nice. Nice.
Toban Dyck (27:17):
More time for nieces and nephews.
Jamie Duininck (27:19):
That's right. That's right. I was just curious, are your nieces and nephews helping you at all or not yet? Not old enough?
Toban Dyck (27:26):
Yeah. They're in Winnipeg, so they come out quite a bit to the farm. Yeah, they help out. My dad, my parents are still very active on the farm. My dad still loves it. He's in the US. He's a snowbird, so he's in the US right now. But when he comes back early April, it'll be every day on the farm, getting ready, and yeah.
Jamie Duininck (27:53):
Yeah. Awesome. Awesome.
Toban Dyck (27:54):
Doesn't slow down at all.
Jamie Duininck (27:55):
Nice way to work with family and stay connected, so good. Well, I appreciate the time today on The Water Table. It's fun to hear about your generational farm and what you're doing. It's also educational and great to start connecting the dots on the tariffs. We don't know a lot, but to be thinking about how this might affect us beyond just knowing there's tariffs and that's going to change some things.
(28:28):
Do you have any insight on how you think this is going to go and how long this may last? Some people say, "Well, if this only lasts 180 days or something, it's really not going to affect a whole lot," which would probably be true. But how do we know that? Just being Canadian and hearing different news, do you have any insight into that?
Toban Dyck (28:55):
I don't. I don't have insight. I know the question is a great one because it comes up all the time. How long do we think this is going to last? Yeah, like you said, if there is that threshold, there is that kind of... If it doesn't go past then, it's fine. We'll be okay. If it goes longer, we might be okay still, but there'll be some seismic shifts in how we do business.
(29:31):
It's really tricky though, just going back to the earlier comment. As a farmer, as a grain farmer, let's say as a grain farmer who is used to paying only a slight amount of attention to these kinds of things, and is used to just throwing crops and selling them to the local elevator and whatever, that's life. I'd be curious to know when these tariffs will start to trickle down to that granular level where it's like, "Okay. I'm really starting to see this now. This is really starting to make sense."
(30:05):
Right now, it's a lot of fear mongering and just we don't know. There's the uncertainty of it. There's the fear. There's the thing that... But I will say, I should say that a lot of my industry counterparts who hold positions at various national associations are feeling a little... They're hopeful in the connections they have with their best counterparts. So, they're spending a lot of time in DC, they're chatting with people, they're chatting with ministers, and they're trying to get the story across and trying to feed that up the chain as far as they can.
(30:50):
And I think they're feeling... In some cases, they're feeling hopeful. Anyway, they're pinning a lot on those relationships. They're finding this is a time to kind of strengthen connection and really bolster those. Yeah. How long do I think this will last? I hope not long. I would like to think that both of us really do, at the core, know that we value each other, and that will, at the end of the day, mean resolution. But there's an error of unpredictability to all this that is hard to quantify.
Jamie Duininck (31:38):
Right. There has definitely a natural sense of we need to wait and see. But I agree, and again, like we said earlier, there's a certain amount of, in a strange way of saying that it's exciting, because there is an opportunity for things to maybe be better in the end. I appreciate that. I appreciate your perspective on all of this and would like to keep the door open to communicating on this again.
(32:10):
Hopefully, I don't have to call you on tariffs, because we have something figured out that works. But as time goes on, it'd be great to have you back on The Water Table, Toban. Appreciate the time.
Toban Dyck (32:21):
I've really enjoyed the conversation, and I'd happily come back.
Jamie Duininck (32:25):
Thank you.
