Barges of imported urea nitrogen fertilizer were purchased this week at the Port of New Orleans for export overseas, said Josh Linville, vice president for fertilizer at financial services firm StoneX.

“We saw a lot of physical barges that were being traded. They were linked to exports,” Linville said, adding, “It is feasible to buy barges on the Mississippi River, reload them on a vessel, and ship them out.”

Since the U.S. and Israel launched a war with Iran on February 28, nitrogen fertilizer prices have soared, with more than 30 per cent of global exports caught in Iran’s near closure of the Strait of Hormuz. The U.S. and Israel said on Friday the waterway had fully reopened after Israel’s ceasefire with Lebanon, sending oil prices sharply down.

Cheaper NOLA fertilizer offers profit opportunity

But while global fertilizer prices have soared, U.S. prices at New Orleans have remained about $170 (C$233) per short ton cheaper, providing buyers an opportunity to profit from the price difference.

With U.S. spring planting under way, some farmer groups and Republican Senator Josh Hawley of Missouri have accused fertilizer companies of price gouging. But Linville said U.S. prices are so low compared to overseas markets that urea nitrogen fertilizer bound for the U.S. is being purchased at port and resold to better-paying markets overseas.

In the opaque U.S. fertilizer market, it was not immediately clear who was reselling the U.S. imports.

Global fertilizer producer CF Industries said in late March it was “foregoing new higher-priced export orders during this spring planting season” so U.S. farmers could access supplies.

Fertilizer cost a global concern

Manufacturers, however, only control the production and sale of fertilizers such as urea until they reach distributors. Retailers who sell to farmers and traders control much of the fertilizer supply. Fertilizer cost has become a major global concern for farmers because of sagging crop prices, which are far below what farmers received in 2022, when fertilizer prices spiked after Russia invaded Ukraine.

On Monday, Rabobank, the global agricultural banking giant, described both nitrogen and phosphate fertilizers as being well into “unaffordable” territory, with little relief possible for months.

“There could be a very long tail to this,” said Stephen Nicholson, head of North American grains and oilseeds for Rabobank.

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Leduc, a fourth-generation producer who grows more than 10,000 acres of wheat, durum, mustard, canola, peas and lentils in an area dominated by grazing cattle, thinks that the long-awaited technological improvement, a plant that produces canola-like oil, could help him eke out a few more dollars per acre.

“All I’m trying to do is improve the bottom line of our farm,” he said.

WHY IT MATTERS: Mustard growers worry BASF’s InVigor Gold hybrid will destroy Canada’s condiment mustard industry. BASF says the oilseed could be grown safely in arid regions where canola routinely fails.

But Trent Dewar, who farms elsewhere in the Canadian semi-desert known as Palliser’s Triangle, fears the new GMO mustard plant will ruin the pure mustard he grows for the premium Dijon bottlers in France, the United States and Japan, as well as other specialty mustards. The industry is worth about $150 million (C$209 million) in exports annually — only a fraction of the $8.9 billion (C$12.4 billion) canola exports market. But in a geography where canola fails more often than it flourishes, mustard has been the lifeblood of many farms since growers started planting it 90 years ago.

“Everybody I’ve talked to personally is quite shell-shocked that this would even be considered,” he said.

Mustard is a tiny crop in Canada, with usually less than 200,000 metric tons of mustard produced by a few hundred farmers. Mustard production soars and sags with volatile world prices and local weather, like other specialty crops. Canadian canola growers, by contrast, usually plant more than 20 million acres of their crop, which produces upwards of 19 million metric tons. That makes canola Canada’s biggest source of crop income by far.

That’s why so many are excited about the drought-resistant GMO mustard plant. Global agricultural giant BASF hopes to win approval from Canadian and U.S. agencies for commercialization as soon as next year in the U.S. and a couple of years later in Canada.

It’s not without risk, however. The GMO plant looks nearly identical to a traditional mustard plant. Neighboring fields could be contaminated with seeds and pollen carried on the wind or by bees. Both traditional brown and oriental mustards and the new mustard canola are brassica junceas, so they can breed, with pollen from one type fertilizing the other.

“It has the potential of wrecking a whole industry,” said farmer Norm Hall, the chair of SaskMustard, which represents Saskatchewan’s mustard growers. The group is lobbying the government in Ottawa to keep the crop out of Canada.

Brent Collins, head of BASF’s seeds and traits division in Canada, said the crop was an “innovation” that would “truly unlock new canola acres, helping meet market demand.”

The French connection

France, which sources about half its mustard supplies from Canada, has a strict non-GMO standard. Other large global buyers are similarly stringent. Many Canadian mustard growers and sellers fear the door could slam shut if traces of the hybrid mustard-canola were detected.

“They look at it like a razor blade that shows up in a bag of rice,” said Peter Gorski of Broadgrain, a company that sells Canadian specialty crops like mustard to buyers around the world.

Foreign buyers have not said how they will respond if GMO traces appear. Most contracts contain a commitment to be non-GMO, and two contracts shared with Reuters contained that specification. A French law limits the presence of GMOs in the food supply, but the threshold of acceptable traces is mostly left to the buyer.

Christophe Planes, sales and marketing director for French mustard processor Reine de Dijon, said the GMO plant could spell trouble for Canadian exports.

About half of the company’s seeds are sourced from Canada, he said, adding: “We’re clearly committed to a non-GMO policy.”

“Since France is quite strict regarding GMOs we systematically check all our supplies to ensure that there are no traces, or very few traces,” Planes said.

Since Canada’s crippling drought of 2021, which hampered mustard production and triggered panic in French shoppers finding grocery store shelves bare of the condiment, France has boosted its own domestic supplies. There are other sources for mustard seed, such as Argentina, Germany and Ukraine, but Canadian mustard is both high quality and cheap, Planes said. Switching could affect quality and raise prices.

A flax grower’s nightmare, revisited

Canadian mustard growers are haunted by a historical precedent: tainted flax. Canada lost a well-paying and steady European market for flax when traces of a GMO variety called Triffid were found in European food products in 2009. Exports plunged and never recovered.

Mustard is an ancient crop, its seeds found in stone-age settlements of the Near East, in ancient Sumerian texts, and even in the tomb of Egypt’s Pharaoh Tutankhamun. In the Bible, Jesus of Nazareth told a parable about the mustard seed.

By contrast, the mustard-canola hybrid is a 21st-century scientific marvel, employing decades of traditional plant breeding and later GMO methods to produce a mustard plant that produces a version of canola oil, and that survives a herbicide controlling the plague of tumbleweeds in western North America. Many farmers in the mustard-growing region have been eagerly awaiting this new crop since the 1990s, but it has been a tortuous scientific development process. Canola is a cool-weather crop that thrives in northern latitudes like Canada, but climate change’s bouts of extreme heat and drought are expected to make it more challenging to grow.

Some of the original research into using a mustard plant to produce canola-like seed was done by scientists working for a farmers’ cooperative in the 1990s, as well as by university researchers. Now global agriculture giant BASF has brought what it calls InVigor Gold to the cusp of commercialization.

Traditional clashes with bold and new

From discussions with mustard and canola industry key players, it is clear that the two camps have sharply different assessments of whether the GMO mustard can flourish alongside traditional mustard.

“We know we can’t co-exist,” said Rick Mitzel, executive director of Sask Mustard.

BASF, however, thinks two million acres of its mustard-canola could be grown in arid areas of Canada and the U.S., with safeguards against pollen flow and seed spread between mustard and canola fields.

“We understand the areas that mustard growers are concerned about and it’s our responsibility to be able to explain what exactly we’re doing to be able to appease some of these concerns,” said Collins.

The two sides have sporadically met in recent years, but as the widespread release of the crop approaches, mustard growers and the mustard industry have grown desperate.

At an industry meeting this winter, mustard growers and merchants called for their representatives to take legal and political action to block the introduction of InVigor Gold. But Hall told them it would be an “uphill battle” because BASF is following the usual crop development protocols, and market impact is not considered during the Canadian crop approval processes.

Kacy Gehring of Mountain States Oilseeds, a U.S. mustard merchant in American Falls, Idaho, said the concern about GMO contamination destroying markets could trigger farmers to just stop growing mustard. That wouldn’t just be a problem for companies like hers, but also bad for world culinary culture, she said.

Farmer Leduc understands the worries of his mustard-growing neighbors, but doesn’t apologize for wanting to get InVigor Gold into his fields as soon as possible. Farming in an arid region isn’t easy, but it’s where his great-grandfather settled. He needs every survival tool he can get.

“I wish I was in a wetter part of the province,” he said.

— Additional reporting by Sybille de la Hamaide and Gus Trompiz in France.

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Speaking on Thursday at the Canadian Crops Convention in Toronto, he said the U.S. believes CUSMA, known as USMCA in the U.S., has worked well but there have been no “substantive” talks with Canada since October.

The Canadian minister responsible for Canada-U.S. trade met with his counterpart, U.S. Trade Representative Jamieson Greer, last week.

“I think we want to get to an agreement, but we are facing some headwinds in the negotiations,” Hoekstra said, citing a lack of “substantive” discussions since October.

Hoekstra said:

• Canada should do everything it can to get into the lowest tariff buckets.
• The U.S. is looking for coalitions with countries that will make sure that if there are trade agreements, then the non-tariff trade barriers are removed.
• U.S. President Donald Trump has said there will be some tariff for getting access to the U.S. market so the Canadian government and businesses should make the case why it is beneficial for the U.S. to do business with Canada at the lowest tariff rate.
• Canada and the U.S. can also work more closely on energy. The U.S. already imports a lot of oil and natural gas from Canada, the U.S. processes much of this energy, and it would want to expand the partnership.
• Canada should also build a stockpile of critical minerals in Canada or the U.S. to use during emergencies. Canada has many critical minerals and it should develop a full supply chain to become an ideal partner for the U.S.

The office of the Canadian Minister Dominic LeBlanc, who is responsible for Canada-U.S. trade, said that
Canada remains committed to establishing a new economic and security relationship with the United States that will deliver for workers and businesses on both sides of the border.

“The Minister looks forward to further engagement with his American and Mexican counterparts over the coming months as we undertake the trilateral and bilateral review of the Canada-United States-Mexico Agreement.”

— Additional reporting by Promit Mukherjee in Ottawa

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The war, which has closed the Strait of Hormuz, has shut down fertilizer plants in the region and severely disrupted shipping routes, potentially curbing supplies to key importers around the world just as farmers in the Northern Hemisphere prepare to plant seeds.

“It’s a mess because it’s spring,” said Cedric Benoist, who farms wheat, barley and other crops south of Paris, referring to global fertilizer prices that have jumped by dozens of euros per metric ton. “This situation can’t continue.” Farmers from Srinagar in Kashmir to Saskatchewan in Canada rely on fertilizer and diesel shipped through the strait, the conduit for about one-third of global trade in fertilizer and 20 per cent of the world’s export fuels.

Because of a global grains glut, many farmers were already expecting to lose money on this year’s crop. Now the outlook is especially gloomy for farmers who still need to buy spring fertilizer, like Jeff Harrison of Quinte West in Ontario. “We’re in a real bad situation now,” Harrison said.

Prices in the United States, which imports much of its fertilizer needs despite a large domestic industry, rose at the war’s outbreak. Prices for fertilizer jumped from $516 (C$706) per metric ton on Friday to up to $683 (C$934) at the import hub of New Orleans on Thursday. Prices could jump higher if the Persian Gulf closure persists and shipments can’t make it in time for spring planting, analysts told Reuters.

“Literally, this could not happen at a worse time of the year,” said StoneX analyst Josh Linville.

World’s largest single-site urea plant shuts down

Seth Meyer, former U.S. Department of Agriculture chief economist and now at the Food and Agricultural Policy Institute, said farmers might alter crop choices and fertilizer applications due to the price spike.

Farmers need fertilizers for virtually all their crops if they want a good yield, but each crop and the soil they are grown in have different demands.

Farmers could cut back on corn, which requires high rates of nitrogen fertilizer, or else sharply reduce fertilizer application rates, Meyer said.

Shipments from the Middle East are likely to drop not only because transit through the Strait of Hormuz has all but stopped, but also due to cuts in production.

Qatar Energy has had to stop production at the world’s largest single-site urea plant, as it lost its source of natural gas feedstock after the company shut down gas output due to attacks on its LNG facilities.

At the same time, sulfur output has been cut in other parts of the Middle East.

“We have lost a significant chunk of the global supply because of this situation,” Linville of StoneX said.

India buys more than 40 per cent of its urea and phosphatic fertilizers from the Middle East. While imports could be hit, output within India has already been affected.

Three Indian plants have been forced to reduce urea output as LNG supplies from Qatar have dropped sharply, said a New Delhi-based senior industry official. As a result, supply is expected to be tight for urea and diammonium phosphate in the short term, the person said.

Fertilizer market tight before war

The global fertilizer market was already tight, with China restricting exports this year to ensure domestic availability, while producers in Europe have cut output due to the loss of cheap Russian gas supply, analysts said.

Urea prices had risen by around $80 (C$109) per ton from around $470 per ton quoted before the start of the Iran war, they said.

China is likely to expand fertilizer export controls because of the conflict, two agricultural analysts said, although the restrictions may not be formally announced and instead communicated to major producers and customs.

While China sources more than 50 per cent of its sulfur imports from the Middle East, Indonesia relies on the region for nearly 70 per cent of its supplies, traders said. Sulfur is a key ingredient for phosphate fertilizers like diammonium phosphate and monoammonium phosphate.

“It is really hard to find readily available spot cargoes now. There are no spot cargoes anywhere,” said one Chinese sulfur trader.

Australia is dependent on imports to meet most of its fertilizer needs, say industry analysts.

“Another nail in the coffin”

Agricultural economist Corne Louw of GrainSA, which represents South African farmers, told Reuters that fertilizer can make up as much as 50 per cent of their production costs.

“Any increases in the current situation where farmers are already struggling with record low grain prices will just be another nail in the coffin,” he said.

Markets might not yet have fully priced in the possibility of a long war, according to Morningstar analyst Seth Goldstein, who estimates that nitrogen prices could roughly double and phosphate prices rise 50 per cent from current levels.

“If the supply shock lasts more than a few weeks, I wouldn’t be surprised to see prices go back to the highs of 2022, when the Russia-Ukraine conflict began,” Goldstein said.

— Additional reporting by Lewis Jackson, Daphne Zhang and Amy Lv in Beijing, Trixie Yap in Singapore and Rajendra Jadhav in Mumbai, Tristan Veyet in Gdansk, Gus Trompiz in Paris, Wendell Roelf in Johannesburg and Nigel Hunt in London.

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Farmers are expected to stick with the 18.8 million spring wheat acres and boost their barley acres from the projection based on a December-January survey, as they respond to a spike in fertilizer prices due to the Iran war, an ongoing rally in canola prices, and a search for “safe” crops to grow in a geopolitically fraught world, they said.

Canada is the world’s top producer and exporter of canola seed and a top-five wheat exporter.

“I think we’re going to see some upward adjustment to the canola acres,” said analyst Jerry Klassen of Resilient Capital. “When this survey was done, canola prices were below the cost of production.”

In some areas like Alberta, many farmers can now make a small profit on canola at today’s forward prices, so farmers are likely to grow more, he said. An increase of 400,000-500,000 acres is likely.

“I’m sure they’re going to lean further in to the oilseeds if they have any opportunity at all,” said Lawrence Klusa of Seges Markets, noting the runup in global vegetable oil crop prices.

Canola prices rise after uncertain winter

Futures prices for 2026-grown Canadian canola are up by more than $80 per metric ton since mid-December, a bigger gain than most competing crops have experienced.

Farmers might also boost their acres of pulse crops like peas if the present surge in fertilizer prices continues, Klusa said. Pulse crops are able to produce much of their own nitrogen requirements, allowing farmers to grow them at a relatively low cost.

Canadian farmers have faced a host of issues this winter. China’s market was blocked to canola and peas by prohibitive tariffs that were reduced only in the past two weeks. Trade tensions with the U.S. and unclear U.S. biofuels policies made that major market for canola oil appear uncertain. The war in the Persian Gulf has suddenly made fertilizer costs and supplies look worrying.

Klassen said farmers are likely to stick with their spring wheat acres and boost their barley acres from what they told StatCan because of these risks and due to the likelihood of financial losses this year.

“Those are kind of safety crops and a good choice with the price of urea going through the roof and so much instability,” said Klassen.

1 acre = 0.405 hectares

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Ellis, 38, a fourth-generation farmer in Wawanesa, Manitoba, credits investments in pricey systems including minimum and zero-till farming which help protect soil; tile drainage, an underground system to prevent flooding; slow-release fertilizer pellets which are more effective, and advice from a professional agronomist on weedkillers.

“We are constantly making little tweaks,” he said. “That’s how we’re going to be able to keep fighting the changing climate.”

Across much of western Canada, farmers like Ellis have been turning out strikingly better crops despite hotter and drier conditions — far above what farmers in the region could have expected in better conditions years ago, according to Canadian government data, thanks in part to widespread embrace of climate adaptation strategies.

While greater yields in Canada and elsewhere are depressing global prices for grains, they are keeping many farmers in business.

Record harvests despite drought

Adaptation practices – which tend to be costly and require cutting edge technologies – have enabled many farmers to ride out a drought that began in 2020.

Earlier this month, the Canadian government announced record harvests of spring wheat and canola for 2025. And because most of the grains produced in Canada are shipped and consumed abroad, those gains have major implications for the rest of the world’s ability to feed itself affordably.

Australia, another large global grain exporter, has also reported rising crop yields despite drier conditions.

This combination of methods and technology is not just helping Canadian growers keep up with climate change, but stay ahead of its ravages, according to interviews with 25 farmers, scientists and agriculture industry leaders, and a review of more than a dozen academic papers.

Spring wheat, used to make high-quality bread, yielded 58.8 bushels per acre this year, according to the government data release. That’s a gain of 77 per cent from 30 years ago, based on a three-year average. Canola yields nearly doubled, reaching 44.7 bushels per acre, also based on a 1994-1996 average.

While most climate science paints a bleak picture for global food supply, with a study in Nature this year forecasting up to 40 per cent reduction in North America’s wheat harvest by 2100, the agricultural experts Reuters interviewed said that with climate adaptation strategies the Prairies can continue to produce bigger and bigger crops in the future.

“Back in the day, 30, 35 bushels an acre (for wheat) would have been a bumper crop,” said Rob Saik, a Canadian agronomist who has consulted with governments all over the world. “Now it’s an abject failure.”

A notoriously difficult region

Even before climate change brought more unpredictable and extreme weather, western Canada was a notoriously difficult region to farm.

The central Prairies, a land of green and golden short grasses and thin, scrubby brush, get only about half as much rainfall as Iowa, and have a much shorter growing season. Climate change has made it even harder. Environment and Climate Change Canada says the country is warming at double the global average and that extreme events have become more common. On the Prairies, annual snowfall, a key source of spring moisture, has declined and summer extremes of rain and drought have increased, with rain often coming in enormous torrents, or not at all.

“Extreme events, like floods, heatwaves, wildfires, and severe storms, are increasingly damaging to our economy, ecosystems and built environment,” the federal department said in a 2024 report.

Incremental gains, not miracles

Scientists and agronomists say Canada’s gains don’t come from a single, dramatic factor, but from steady, incremental progress with farming methods and inputs.

Many seeds now come stacked with insect, disease and weed resistance, thanks to conventional breeding as well as genetic modification. Fertilizer application is designed to minimize disturbance to the soil surface by being placed at the same time as the seed goes in.

Fungicides, weedkillers and nutrients allow crops to outcompete their natural enemies.

Some of the strategies recall pre-industrial practices, such as intercropping, growing multiple crops at the same time.

Experts also credit automation such as self-guiding tractors that apply fertilizer at different rates based on soil tests and satellite mapping.

One family’s adaptation evolution

The Mowbray family ventured into adaptive practices four decades ago with tile drainage, laying a small stretch of perforated pipe designed to take the water down into the soil rather than spread it across the surface.

Over the last 12 years, Scott Mowbray, 46, has expanded the drainage system to about 800 acres of his land.

Meanwhile, the Mowbrays gradually took up minimum till. By 2010, the 2,000-acre farm was entirely no-till, leaving the soil unplowed and with stubble standing as a moisture trap and a barrier against the wind that otherwise carries the topsoil away.

The innovations allow the Mowbrays to “pull off yields twice what we used to with half as much rain,” Mowbray said, producing “incredible” volumes of spring wheat, peas and rye.

Technology’s steep price tag

Much of what has allowed Canadian farmers to deal with climate change involves expensive and complex equipment. A smart combine costs upwards of $1 million. A high-speed-data-enabled tractor and seeding drill cost around $2 million.

Kip Eideberg, senior vice president of government and industry relations for the Association of Equipment Manufacturers, which represents John Deere DE , Case New Holland CNH and other manufacturers, said precision systems have saved Canadian farmers nine per cent in herbicide and pesticides, six per cent in fuel, and four per cent in water use. That saves money for farmers operating on razor-thin margins, he said.

Most large-scale farmers have access to such technology in their tractors, combines, sprayers and management computers, Terry Griffin, a Kansas State University agricultural economist, said. But an older generation of farmers often doesn’t want to take on digital challenges, while younger farmers don’t have the money for machines or agronomic advice.

One obstacle to greater adoption is rural broadband access. Mowbray can’t count on being able to run a constant stream of data from his big farm machines. He can’t even call his farmhouse from his cellphone. His farm relies on two-way radios instead.

“It’s a simple thing but hugely important when you are in the field and might need a pick-up but can’t get a call through to the house,” he said.

Seed science – the invisible factor

Another equally important factor for farmers’ gains: breeding genetically superior crops that are hardier, drought-tolerant and produce bigger yields.

“We’re just starting down that path,” said Rick Mitzel, CEO of farmer-and-industry-funded mustard seed development organization Mustard 21. The company is developing drought-tolerant plants as an alternative to canola. The varieties “come out of the ground quicker, develop roots quicker, get leafing faster,” Mitzel told Reuters in an interview.

The farmer-controlled South East Research Farm in Redvers, Saskatchewan has been testing crops such as camelina, which is most likely to be planted in Canada for sustainable aviation fuel, that could offer farmers better yields and more resilience.

Executive director Lana Shaw doesn’t think climate change will happen without losses to the Canadian farm community. Some farmers will choose to not adapt and will simply retire. Some will adapt and fail. And some farmers will adapt and thrive.

“Under pressure,” she said, “they can adapt very fast.”

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The leaders of India and Canada have agreed to restart negotiations for a comprehensive trade deal as diplomatic relations thaw under Canada’s Prime Minister Mark Carney.

WHY IT MATTERS: Canada is a major global supplier of lentils to India, vying with Australia to be the top source. It is also a top supplier of peas, along with Russia.

India imposed a 30 per cent import duty on all yellow peas, effective November 1, after pressure from local farmers.

The Canadian and Indian governments are discussing “whether we can have a quota, whether we can have a lesser tariff, whether we can have a different system of how we can make sure that in the long run pulses from Canada go regularly to India,” said Patnaik after a tour of the Agribition farm show on Thursday.

Farmers at the show have said they might not grow peas in 2026 due to China’s 100 per cent duties on Canadian peas and India’s recently imposed duties. Those are two of Canada’s three biggest pea markets, with the U.S. the third, and many farmers say these tariff rates will make the crop unprofitable for them, so they are likely to plant other crops instead.

Patnaik said India would always need to have foreign sources of pulse crops for the long run, even if it has years of domestic surplus. India does not want to see Canadian farmers permanently back away from growing the crop, he said. Import restrictions are used to raise domestic prices to help Indian farmers, he said.

Canada’s agriculture and international affairs ministries did not immediately respond to a request for comment.

India has a long term strategy of becoming self-sufficient in pulse crop production, but many analysts are skeptical it can achieve that goal.

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Canada’s canola exports have been effectively blocked from China, at times Canada’s biggest seed export market, for months due to import duties on Canadian canola seed, oil and meal. These were part of China’s response to Canada’s 2024 100 per cent duties on Chinese electric vehicles. Canola sales to China were worth C$4.9 billion in 2024.

“This is not 2018 anymore. This is 2025. It’s a new (Canadian) government. We have a new leader. We want to do business,” Canada’s Agriculture Minister Heath MacDonald said a week after his return.

China had blocked most Canadian canola imports and some other products in 2018 in response to Canada arresting a Huawei executive on a U.S. warrant.

After the executive was released, relations became less frosty and canola sales recovered, until former Prime Minister Justin Trudeau followed the U.S. in imposing the EV tariffs.

MacDonald said his trip included meetings with senior Chinese government, research and commercial agriculture representatives whom he found willing to work together on agriculture issues.

No timeline or promises have been made on removing the Chinese restrictions, MacDonald said, but the relationship is warmer.

“We’re leaning on an open door and I think it’s important that we keep the communication open,” said MacDonald. After the minister’s visit a delegation of technical officials began looking at resolving trade snags.

The EV issue was raised in the agriculture talks, MacDonald said.

Chinese President Xi Jinping met Canadian Prime Minister Mark Carney on the sidelines of the Asia-Pacific Economic Cooperation (APEC) economic summit in Korea on October 31 and invited him to visit China. MacDonald said this is a sign of the thawing relations.

“I’m optimistic. I really am. I think we’re going to get somewhere. I think the willingness is there by both countries,” he said.

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CGC grain inspector Chris Fleury said that durum wheat appears to be particularly affected by the wet conditions.

Sprouting in durum wheat kernels lowers the quality of the grain for pasta and couscous makers, who are major customers in North America, Italy and North Africa. Mildew can also lower quality.

More than half of the world’s durum exports come from Canada.

Statistics Canada on September 17 predicted a Canadian durum crop of 6.53 million metric tons, which would be the largest since 2020’s 6.57 million.

“We almost had perfect harvest conditions” since 2020 until this year, Fleury said.

Late season rainfall has boosted production but may have impacted quality. Dry summers from 2020 through 2024 have resulted in smaller crops, with 2021’s 3 million tons the smallest since 2010. However, dry conditions have also meant a high quality crop, with limited damage from the wetness that can result in sprouting and mildew.

Thousands of farmer-supplied samples of crops have started arriving at the Canadian Grain Commission, which analyzes the quality of Canada’s major crops. It is early in that process and will take weeks to get a full sense of what is coming off Prairie fields.

While about two-thirds of the Prairies have not had major harvest delays due to rain, farmers in areas including southeastern Saskatchewan, which produce millions of tons of cereal grains like spring wheat, durum, oats and barley, have often had to postpone harvesting their crops in September, hoping drier weather will soak up some of the wetness in the crop. Spring wheat in eastern Saskatchewan and most of Manitoba could also be affected by the damp conditions, Fleury said.

Millions of acres of crops on the eastern third of the Prairies are still standing uncut or lying in swaths due to frequent rains from late August through September.

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China hit Canadian canola seed imports with preliminary 75.8 per cent duties on Tuesday following an anti-dumping investigation, escalating a year-long trade dispute. Grain buyers reacted by yanking their bids to buy crops in the next few months, said Dale Leftwich, the policy manager for SaskOilseeds.

Why it matters: China is Canadian farmers’ largest canola seed market and would be difficult to replace.

“It throws everything into confusion,” said Leftwich, whose organization represents oilseed growers in Saskatchewan.

“It’s a huge hit.”

China is by far Canada’s biggest canola seed market and will not be easy to replace, canola trade experts told Reuters. Canada exported almost C$5 billion of canola products to China in 2024, about 80 per cent of which was seed, and the steep duties would likely all but end those Chinese imports if they are maintained.

Futures prices fell as much as 6.5 per cent on Tuesday, hitting a four-month low at one point, and some traders said prices could fall further if the Chinese tariffs linger.

China did not say on Tuesday how long the duties would last. A permanent decision on tariffs was expected for September but the preliminary duty had some wondering whether the timeline might be extended.

Farmers sell their crops to local grain elevator companies who temporarily store the grain, before loading it onto trains and then ships for export to overseas markets like China.

Grain elevator companies are worried they will not be able to ship out canola seed that they buy from farmers, so are unlikely to buy more until they have a clear sense of what will happen, traders said.

Farmers are wondering how they are going to pay the bank and cover bills, said Saskatchewan farmer Chris Procyk, who was having an early morning coffee with his wife when he received a flood of texts and emails about the Chinese trade action.

With the Canadian canola crop maturing and within days or a few weeks of harvest, selling the crop quickly is vital for farmers who need to cover bills for expensive inputs like fertilizer that they bought on credit.

“This is the worst possible time,” Procyk said.

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