Canola price hike from China trade dispute hits northern growers still recovering from insect infestation

Northern Ontario canola farmers are facing some tough decisions this spring.

A trade dispute with China has driven down prices to the point some producers wondering if it's worth planting it at all. 

"I guess you can still grow it, but the profit margin gets lower and lower, so it's not as attractive for farmers to grow it," says Hubert Beaudry, the president of the Ontario Canola Growers Association, who farms a few hundred acres in Cache Bay, near Sturgeon Falls.

"A lot of the farmers will either switch crop or take the gamble and grow it anyway and hopefully this issue gets resolved in the near future."

Beaudry says while the western provinces are really where canola is king, there are about 40,000 acres cultivated in Ontario, much of it in the Nipissing and Temiskaming districts.

He says many of those farmers were looking at 2019 as the comeback season for canola.

An infestation of Swede Midge in 2012 and 2013 saw many growers give up on canola in favour of soy beans and other cash crops.

"This year, it's optimistic, everything's seems a go and now farmers are wondering if they should take the risk," says Beaudry.

"I think the seed was ordered throughout the winter with the intention of planting. If it's going to be switched, it's going to happen, like, right now."

Federal help for canola farmers

He says unlike some producers in western Canada, Ontario farmers can still get their crop to market, but because China has closed its door to Canadian canola, it makes for a saturated market in North America and has seen prices drop from $525 per metric ton in December down to about $440 this spring. 

The federal government announced last week that it will more than double the maximum amount of money available to individual producers under the Advance Payments Program, from $400,000 per year to $1 million.

For canola producers, the interest-free portion will be increased to $500,000 from $100,000.

Beaudry says he's not sure how many northern farmers will take advantage of the loan program, especially since it's money that will one day need to be paid back.

"I'm encouraged to see the government doing something," he says.