Tariffs, Trade and Handling the 2025 Crop
Grain markets for 2025 have been a volatile ride for many western Canadian producers. Tariff threats, tariff exemptions, rail strikes, port strikes, political shifts, biofuel policies, export markets, global production issues: this is not an extensive list. Markets are volatile and proper grain marketing can be the difference between unloading grain out of fear or taking a calm, risk managed approach to the markets and your crop marketing plan.
Here are a few key items that could shape up how the crop marketing year could transpire as we head into the 2025/26 crop marketing year.
Foreign Policy: Trade and Tariffs have been a reoccurring theme in recent months. At the time of writing, there is a preliminary 75% tariff on canola seed being imposed by Canada’s largest export partner. China took around 50% of all Canadian canola in 2024/25 and over 70% the year prior. Australia will fill the gap for Canadian canola into China if the policy remains unchanged and Canada will need to service the markets that Australia can no longer fulfill. Global demand overall for Canola is expected to stay strong and Canadian canola will need to remain competitively priced globally to help ensure we are priced attractively to importing nations.
Another Foreign Policy to watch is the US Biofuel Industry Policies. The US Biofuel Policy is a complex system but plays into Canadian agriculture markets greatly. For example: The United States EPA back in early June proposed 5.61 billion gallons of RVO (Renewable Volume Obligation) for 2026. This would be up from 3.35 billion gallons in 2025 and will require more soybean oil and the use of foreign feedstocks to help fulfill the demand. The news in June came in higher than earlier anticipated and sent soybean oil values much higher at the time. Soybean Oil and Canola futures values have proven to be very sensitive to this policy and will remain so as long as the nation has such robust biofuel mandates. The United States accounted for 68% of year to date Canola Oil exports from Canada so far in 2025 and their domestic policy towards foreign veg oils and their usage needs to be kept top of mind.
Crop Size: We are early into the 2025 crop harvest at time of writing and the size of the crop is not completely knows. Statistics Canada estimated the Canadian Canola crop in its pre harvest estimates at 19.94 MMT, this is up from 19.24 mmt last year and the largest canola crop since 2018. Wheat crop was estimated at 35.5 mmt, down from last year but still a large crop. Biggest increases of note would be Peas, Lentils, Chickpeas and Flax.
Demand: Early demand will be key, especially this year when so many questions remain on trade relations. Demand is important to see early on in the crop year and if a lack of demand is present, it weighs on crop prices and forward looking sentiment. We have yet to see how demand will shake out but crops of larger production such as the pulse crops, we will be watching closely. Important to note where we see the Initial canola shipments get sent as markets will be eager to see that the Canadian crop does find a home.
Grain Marketing Tips Fall 2025 – Managing Risk on Your Operation
• Cash Flow: Know what your cash flow requirements are: When do we need cash and how much? Although farms need consistent cashflow year round, it is key to identify when the biggest cash draws are on your accounts. Producers need to be cognizant of cashflow needs several months out to help plan what grains we are moving. Don’t wait until you need cash to start making cash.
• What Are My Returns? Know your Costs of Production: What is a good price? A Breakeven price? How much return are you actually generating at said price?
• Logistics and Crop Movement: When marketing your grain, logistics of the sale is often overlooked. There are opportunity costs associated with storing grain. Many producers may be enticed to lay a grain bag in their prairie fields but costs associated with such need to be considered.
• Marketing Horizon and Outlook for Crops: What crops do we want to hold onto, what crops do we need to move first? This is where the market outlooks and forecasts can come into play. What does the current supply of the crop look like locally and globally? This is where one needs to build a relationship with a trusted local advisor who can help outline where these risks or opportunities might occur.
• Properly Manage Risk. Advanced Marketing Tools: There are many tools available to producers that do not result in a direct cash sale. One needs to be cognizant of what goals they are trying to achieve with each sale of their crop. Producers can elect to sell the cash price or place targets but there are other tools as well. Basis contracts, futures first contracts, minimum price contracts, daily averaging contracts, the list goes on. Producers can also work with licensed futures brokers to enact a hedge strategy on certain futures traded grains.
• Don’t Forget About Opportunity Costs: Cash advances available through the Advance Payments Program are a great tool if used properly. Producers may be able to access up to $250,000 interest free operating capital and up to $1,000,000 of total advance cash at Prime minus 0.25% for the current program year. Prime rate has been falling since summer of 2024, helping ease some of the borrowing costs. When it comes to opportunity costs, one needs to understand there is a cost to storing grain and the opportunity cost grows when there is operating notes to be repaid.
Exceed Grain Marketing
Simply put, we help producers market their grain. Exceed Grain Marketing works with producers all across the Canadian prairie provinces to better understand the forces at play in the markets and how we can best manage the risk at hand. Our experienced and diversified team members work directly with producers like yourself.
We have a very talented team across the Canadian prairies and if you have any inquiries about the services they provide, reach out to them.
The best way to reach our team is to visit our website or reach out directly to Exceed at markets@exceedgrainmarketing.com or myself at tykehrig@exceedgrainmarketing.com and we can point you in the right direction.
Ty Kehrig
Exceed Grain Marketing
