The Canadian Food Inspection Agency said in an email on April 8 that new admissibility requirements for commodities originating from Greece have been set up in CFIA’s Automated Import Reference System (AIRS).

WHY IT MATTERS: Data from Greece’s tourism industry show over 300,000 arrivals in that country from Canada in 2024 alone.

According to the World Organization for Animal Health, Greece began reporting cases of foot-and-mouth disease on March 15 with nine infected cattle at a farm on the island of Lesvos, marking the country’s first such cases since 1994. Its most recent cases, in sheep and one cow on the same island, were reported March 29.

Greece’s cases so far have all occurred on farms in the northern regions of that island, in the Aegean Sea off the west coast of Turkey. So far, 438 animals in total have been confirmed infected.

The findings make Greece the fifth European Union member country currently under foot-and-mouth restrictions from Canada. Hungary, Slovakia and Cyprus all reported cases last year, while Bulgaria is the lone EU member country “not usually considered free” of foot-and-mouth disease.

Germany regained disease-free status last month, while CFIA’s restrictions on Austria were lifted last September.

While findings of the disease in Greece are so far limited to Lesvos, Canada’s new restrictions apply to the entire country, unlike certain other nations such as Brazil, Argentina and Peru in which CFIA classifies some but not all provinces or states as free of foot-and-mouth disease.

What products are prohibited?

At-risk commodities covered by Canada’s import ban include live animals and germplasm; animal products and byproducts; uncooked meat and meat products; raw milk and milk products made from raw milk, such as unpasteurized cheese; unprocessed manure; laboratory material; blood products; livestock feed and equipment that has been in contact with affected animals; raw or unprocessed pet foods; raw hides, skins, wool, antlers, horns, hooves; and any other non-heat-treated products or byproducts from vulnerable animal species.

Species vulnerable to foot-and-mouth disease include hogs, cattle, bison, sheep, goats, camelids (llamas, alpacas) and cervids (deer, elk, moose) among others.

CFIA’s restrictions apply to any at-risk products dating as far back as 28 days before the first symptoms were detected in an affected country.

Foot-and-mouth disease, according to CFIA, is a viral disease characterized by symptoms including blister-like sores on the tongue and lips, in the mouth, on the teats and between the hooves; foot lesions, accompanied by acute lameness and reluctance to move; and loss of appetite or milk production. The virus can spread between animals through direct, indirect or airborne transmission.

Canada is free of the disease and has not reported any cases of the disease in livestock since 1952, when an outbreak in southeastern Saskatchewan is believed to have originated with a visitor from an infected farm in Germany, carrying the virus either on clothes or an infected sausage.

Advice for farmers visiting Greece

Canadians are still free to travel to Greece, but CFIA recommends they avoid visiting farms when doing so. Travellers who do visit farms should make sure clothes and footwear worn during those visits are free from soil or manure. Footwear should be cleaned and disinfected, and dry-cleaning of the clothes worn is recommended.

Travellers should also avoid contact with susceptible animals, including farm and zoo animals and wildlife, for 14 days after returning to Canada.

For farmers who travel to Greece, contact with farm animals is not recommended for five days upon return to Canada, when “strict personal decontamination measures” are applied to clothes and footwear, CFIA says.

Travellers also must declare all food products upon arrival in Canada. Generally, CFIA says, meat and dairy products from foot-and-mouth infected countries won’t be allowed, but foods that are “cooked, shelf-stable, commercially prepared and hermetically sealed” may be.

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Protesters deployed thousands of trucks and tractors in at least 20 blockades across the country, local media said. Police fired tear gas at a group of protesting farmers who threw stones and forced their way onto the runway at Heraklion airport in Crete, halting air traffic.

Another group near the Chania airport in Crete smashed the windows of police vehicles with their shepherd’s crooks and stones. Police officials said those involved had been identified and would be charged.

Greek farmers face a 600 million euro (US$700 million) shortfall in EU aid and other payments after a corruption scandal in which some farmers, aided by state employees, faked land ownership to qualify for payouts. Ongoing audits have slowed subsequent disbursements.

The delays to funding come just as farmers and stock breeders struggle with an outbreak of sheep pox that has led to hundreds of thousands of sheep and goats being culled.

“We don’t have help, climate change has influenced production a great deal, all of this with the (corruption) scandal — people who have nothing to do with the profession are getting enormous amounts,” said one farmer, Prokopis Bandzis, who protested on the island of Lesbos.

“I want there to be justice. Those involved with the illegal subsidies need to account for (their actions).”

Prime Minister Kyriakos Mitsotakis, under criticism for the scandal, urged farmers to end the blockades and said the government is open to dialogue. The government has acknowledged the payment delays and pledged to distribute 3.7 billion euros (US$4.3 billion) to farmers this year.

Yet protests continue. In the north on Monday, farmers disrupted traffic at the Promachonas and Kipi border crossings with Bulgaria and Turkey respectively. A customs official at the Kipi checkpoint said that only passenger cars and trucks with sensitive goods were allowed to cross.

Roadblocks were also set up in southwestern and central Greece, where farmers have said they aim to block the Volos port this week. Hundreds of farmers had blocked the entrance to the port of Mytilene on the island of Lesbos.

— Reporting by Renee Maltezou, Angeliki Koutantou and Elias Marcou

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The products are more effective, a dozen farmers across the Thessaly plain said. They are also potentially more harmful: laboratory tests shared with Reuters show the bottles contain pesticides banned in the European Union for several years because of suspected risks to humans or the environment.

The situation in Greece, explained by farmers, elected officials, law enforcement officers and pesticide industry experts, is echoed across the EU, where authorities say the use of banned and counterfeit pesticides is higher than ever.

This comes as the bloc is seeking to reduce even the use of permitted crop aids as part of its green transition.

At least 14 per cent of pesticides used on EU fields today are illegal, up from around 10 per cent in 2015, EU data shows. In some areas of Greece, that number hits 25 per cent, said Greece’s Crop Protection Association ESYF, which represents pesticide companies in the country.

A record 2,040 tonnes of illegal pesticides were seized by police in Europe in 2022, the latest available data by Europol from an EU-wide operation shows, four times higher than in 2019.

The problem is likely even larger because so much smuggling goes undetected, said authorities in Greece and in several of Europe’s main agricultural producers: France, Germany and Spain.

Agriculture Minister Kostas Tsiaras told Reuters Greece was working to protect public health, support farmers, and promote safe, legal agricultural production.

“The fight against illegality is a priority for us,” he said.

The EU Commission did not respond to Reuters’ questions.

Farmers’ livelihoods threatened

Greek farmers are vulnerable to the illegal pesticide trade because of the lingering impacts of the 2010-18 financial crisis and climate change, which has parched their land and brought pest outbreaks.

Pesticides can amount to up to 50 per cent of annual costs, some farmers said. A litre of a popular Greek insecticide costs up to 380 euros (C$607.62). A counterfeit can be found on the black market for 200-230 euros, they added.

The high prices threaten livelihoods in Thessaly, a key breadbasket in central Greece, which produces apples, almonds, grains and cotton. Orchards in the region have been abandoned as farmers seek work elsewhere.

“To survive, a farmer must become a criminal?” said Giorgos Zeikos, a fourth-generation apple farmer who heads a cooperative in the village of Agia.

“It’s one thing to break the law to profit; it’s another to do it just to survive.”

Zeikos said he has refused offers to use illegal pesticides. But farmers in six villages across the hot valley said they, or their relatives or neighbors, had tried them.

Another temptation is the perceived effectiveness of the illegal pesticides.

On a break from the fields, farmers in the cotton-producing village of Metamorfosi recounted how older, now-banned pesticides were so potent that birds would not fly over their fields after they sprayed. Now, they said, they apply twice the recommended dose of the legal product.

George Pontikas, president of ESYF, the crop protection association, dismissed farmers’ claims that pesticides were expensive and inefficient. He said authorities were not doing enough to punish lawbreakers.

“Someone who poisons our food supply to make a profit should be treated as a felon,” said Pontikas, who is also chief executive of the Greek branch of Swiss agrochemicals giant Syngenta.

Illicit chemical trade

The products are smuggled into Greece overland from Bulgaria in spare tires or ferried on rafts traffickers use to bring migrants into Europe from Turkey, farmers and officials said.

In one village, an almond farmer said he once drove to Bulgaria and bought five boxes of counterfeit products for himself and his neighbours. In another, a farmer said locals act as intermediaries for a man known as “the Bulgarian”. When he is expected, they take orders from others in the village.

Farmers pay in cash, spray at night and burn the empty containers to erase all evidence, they said.

“If you want it, you’ll find it,” said Thanasis Kostis, a farmer in Metamorfosi. Kostis said he has not used illegal products.

Farmers who told Reuters they had used the illegal pesticides asked to remain anonymous for fear of reprisals from authorities.

Bulgaria’s Food Safety Agency said it has stepped up inspections since October to combat the trade and use of unauthorized products.

Turkey’s Trade Ministry did not respond to a request for comment.

The trade is increasingly structured, resembling organized economic crime, a senior Greek police official said, speaking on condition of anonymity. Roles are divided into import, storage and distribution. Meanwhile, police act largely on tip-offs, three police and industry officials told Reuters.

Dimitris Stavridis, head of Thessaly’s General Directorate of Regional Agricultural Economy, acknowledged that more checks could be carried out in farmers’ markets but said that some regions struggled with understaffing.

Health risks

Seized products go to the Benaki Phytopathological Institute in Athens for analysis. Many arrive with Bulgarian, Turkish, or handwritten labels. Some counterfeits look like EU-approved products but may contain harmful substitutes, including unknown solvents. Under Greek law, only pesticides with Greek labels are legal.

Greek police and Europol say many of these substances originate in China.

China’s Foreign Ministry said in an email it has always asked companies to abide by the laws in the countries in which they operate and that Beijing is willing to strengthen cooperation with the EU on customs enforcement.

The EU bans have been partly due to what regulators identified as health risks, including links to liver, kidney and lung damage, or as possible carcinogens. However, some of these chemicals are used legally in other countries, including the United States.

Over a dozen banned pesticides – some since 2009 – were detected in Greece alone in 2024, tests seen by Reuters show.

“This is serious,” said Thessaly Governor Dimitris Kouretas, a toxicology professor, referring to research on the possible health impact.

In the past year, 10 banned pesticides were detected in Greek produce including olives, cherries, tomatoes, grapes and oranges, Agriculture Ministry data shows.

While the World Health Organization says consumer risk from low pesticide levels is minimal, farmers using illegal chemicals may face greater danger.

In the early 2000s, respiratory physicians at Larissa University Hospital in Thessaly observed that many patients who smoked and were exposed to pesticides were developing a rare form of lung scarring. In 2006, their published findings alongside similar research in France, helped to formally recognize a disease now known as Combined Pulmonary Fibrosis and Emphysema (CPFE).

“Nearly all such patients exposed to both smoking and pesticides developed this distinct entity,” said doctor Ilias Dimeas.

Elsewhere in Greece’s farming regions, doctors say they have seen a rise in respiratory diseases in recent years potentially linked to pesticide exposure and are beginning to take note of their patients’ occupational history.

Farmers greet the risks with a shrug.

“All pesticides have consequences,” said Kostis, the farmer in Metamorfosi. “I had a mask, but this year I haven’t worn it at all.”

— Additional reporting by Alexandros Avramidis in Thessaly; Patricia Weiss in Frankfurt; Riham Alkousaa in Berlin; Sybille de La Hamaide in Paris, Emma Pinedo in Madrid, Georgi Slavov in Sofia, Kate Abnett in Brussels, Joe Cash in Beijing and Tuvan Gumrukcu in Ankara.

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As they drove through the streets of the capital they honked their horns to cheers and waves from passersby. Dozens of tractors parked in front of parliament and more were set to join.

“Livestock farming died today,” read a banner on one tractor with a black coffin attached to its front.

The protest echoes grievances in France, Belgium, the Netherlands, Poland and Italy, where farmers have staged similar demonstrations.

“No farmers, no food, no future,” a banner on a tractor in Athens read.

Greek farmers’ unions have been in negotiations with Prime Minister Kyriakos Mitsotakis’ conservative government for weeks, but say the measures announced so far don’t go far enough to meet their concerns.

“We are coming to Athens right now to fight for a better tomorrow,” said farmer Konstantinos Katselis.

“Everything is very expensive,” he said. “Petrol, fertilizer.”

At the last toll booths on the national highway some 30 km outside the capital, farmers waved Greek flags and cheered each other on as they passed through.

Hundreds of farmers with about 150 tractors were expected to join the rally, scheduled for 1630 GMT, and try to pile pressure on the government, which has already offered discounts on power bills and a one-year extension of a tax rebate for agricultural diesel to the end of 2024.

On Monday night, farmers lined up their tractors and pickups along highways as they gathered at a meeting point in central Greece where they spent the night before heading to Athens.

“There are many problems, most of all the fuel and the energy costs,” said one of the protesting farmers, Christos, in the central Greek town of Kastro.

“Last year was catastrophic for farmers, we did not produce grapes, we did not produce olive oil, we produced a bit of cotton but it was bought for nothing.”

On Tuesday morning, dozens of farmers arrived by boat at the port of Piraeus from the southern island of Crete. More farmers were expected to arrive by bus from other areas across Greece.

The government reiterated on Monday that it is willing to discuss a more permanent tax rebate scheme in the future, but it had no fiscal room for any further concessions this year. Greece has been recovering from a decade-long financial crisis.

“We have nothing more to give,” Mitsotakis said during an interview with Greek Star TV on Monday evening.

“I think farmers acknowledge this and know very well that the government has probably exceeded even their expectations, especially on the power bills issue.”

He said the rally was expected to be largely symbolic, but farmers appeared determined to push for more concessions.

“Everyone needs to stand together, because everyone is going to win from our fight – not just us,” farmer Spyros Hatzis said.

–Reporting for Reuters by Angelos Tsatsis, Giorgos Moutafis, Alkis Konstantinidis, Renee Maltezou.

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“All we are asking for is that the environmental and hygiene rules we impose on our farmers and other professions be the same”, Macron said, adding: “As of today, as the draft texts stand, France opposes and will continue to oppose to this free-trade deal”.

Speaking after a European Union leaders’ summit in Brussels, which was overshadowed by hefty protests staged by farmers from all over the continent, Macron said the EU also needed a joint mechanism to guarantee fair prices retailers and food giants pay to producers.

At a separate news conference around an hour earlier, German Chancellor Olaf Scholz said he was a “big fan” of the Mercosur deal, which affects  Argentina, Brazil, Paraguay and Uruguay and has been in the works for around 20 years.

Time to go home

Two of France’s main farming unions on Thursday urged protesters who have staged hundreds of tractor blockades across the country to go back home, after the government announced measures to try to quell the anger in a movement that has spread across Europe.

While some local grievances vary, the unrest, also seen in Belgium, Portugal, Greece and Germany, has exposed tensions over the impact on farming of the EU’s drive to tackle climate change, as well of opening the door to cheap Ukrainian imports to help Kyiv’s war effort.

Farmers’ complaints across Europe include being choked by green rules, taxes, rising costs and unfair competition from abroad.

The frustration came to a head in Brussels earlier in the day, where farmers threw eggs and stones at the European Parliament, and started fires and set off fireworks as they demanded EU leaders at the nearby summit nearby do more to help them.

“We want to stop these crazy laws that come every single day from the European Commission,” Jose Maria Castilla, a farmer representing the Spanish farmers’ union Asaja, said in Brussels.

With the call from some of the French unions, the question now is whether farmers will they lift their blockades in France – and what will happen to protests that have spread across Europe.

French pledges

The French farmers had stepped up their tractor protests from Monday after more than two weeks of demonstrations. Wary of further escalations, the government promised on Thursday to offer them more protection, including by better controlling imports and giving farmers extra aid.

“Everywhere in Europe the same question arises: how do we continue to produce more but better? How can we continue to tackle climate change? How can we avoid unfair competition from foreign countries?,” Prime Minister Gabriel Attal said, as he announced the new measures in Paris.

In response to the array of pledges, Arnaud Rousseau, of France’s main farmers union FNSEA said it was “time to go home” and lift the blockades.

Arnaud Gaillot of the Young Farmers’ union said the same. But both warned that other types of protests would continue – and that they would take back to the streets if the government did not follow on its promises.

EU leaders meet farmers

The protests across Europe come as the far right, for whom farmers represent a growing constituency, is seen making gains in June’s European Parliament elections.

In Brussels, European Commission chief Ursula von der Leyen and Belgium Prime Minister Alexander De Croo – who holds the EU’s rotating presidency – were set to meet the European farmers’ lobby COPA-COGECA after the summit of EU leaders.

Von der Leyen said the European Commission would work with Belgium on a proposal to reduce farmers’ administrative burdens.

“To the farmers that are outside. We see you and we hear you,” European Parliament President Roberta Metsola said.

Small groups had tried to tear down the barriers erected in front of the parliament – a few blocks from where the summit was taking place – but police fired tear gas and sprayed water at the farmers with hoses to push them back.

A statue on the square was damaged. Security personnel in riot gear stood guard behind barriers where the leaders were meeting at European Council headquarters.

The pockets of unrest diminished during the day and the tractors began leaving in the afternoon.

Farmers have already secured several measures, including the bloc’s executive Commission proposals to limit farm imports from Ukraine and loosen some environmental regulations on fallow lands, which several EU leaders welcomed as they arrived at the summit.

And Irish Prime Minister Leo Varadkar echoed French President Emmanuel Macron’s opposition to signing a trade deal with the Mercosur group of South American countries in its current form – another key demand for farmers. But German Chancellor Olaf Scholz reiterated his support for the deal.

Supply chain impacts

Farmers across Europe staged protests during the day.

In Portugal, farmers used tractors to block at least three roads linking their country to Spain.

Hundreds of Greek farmers with black flags – to symbolise what they say is the death of agriculture – drove their tractors across the centre of Greece’s second-biggest city Thessaloniki.

“No farmers, no food, no future” one banner read. One tractor was carrying a black coffin.

“We hope to shake them up (with our protest), we hope they are frightened and change the laws they have enacted,” farmer Vassilis Kanods said.

At a protest in Italy, a tractor carried a sign reading: “You are destroying our future.”

Meanwhile, one of Belgium’s biggest supermarket chains Colruyt said on Thursday three of its distribution centres were blocked by protesting farmers, leading to disruptions in its supply chain.

Belgian media reported that 1,400 trucks were stuck at the port of Zeebrugge, blocked by farmers.

In France, Eric Hemar, the head of a federation of transport and logistics employers, said delays had cost transport firms about 30% of their revenues over the past 10 days.

—Reporting for Reuters by Sudip Kar-Gupta, Johnny Cotton, Yves Herman, Kate Abnett, Phil Blenkinsop, Erol Dogrudogan, Petra Wischgoll, Julia Payne in Brussels, Geert De Clercq, Nicolas Delame, Elizabeth Pineau, Tassilo Hummel and Kate Etringer in Paris, Piotr Lipinski in Gdansk, Catarina Demony in Lisbon, Angeliki Koutantou and Lefteris Papadimas in Athens, Alexandros Avramidis in Thessaloniki, Charlotte van Campenhout in Amsterdam.

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The farmers parked tractors on a national highway near the town of Larissa in central Greece, where they faced off with police.

Kostas Tzelas, head of the Karditsa agricultural association, said the rising prices for fuel and electricity had increased production costs by 50 per cent.

“They don’t solve the basic problems that we have to maintain our farms and villages,” Tzelas said. “We ask for substantial measures that will give a real solution to our problems.”

Greece has spent about 1.7 billion euros (C$2.48 billion) subsidizing power bills for farmers, households and businesses to help them with rising energy prices.

High energy costs have been the main driver of inflation, which accelerated to 5.1 per cent in December, the highest in the country in 11 years.

Tzelas, speaking at the rally outside Larissa, the largest city of Greece’s central agricultural heartland, said: “That is why we are out on the streets, the countryside will become deserted, villages will be deserted, people will not be able to cultivate and we will no longer be able to live in our villages.”

Earlier on Friday, the government unveiled an additional 170 million euros in financial aid for the agriculture sector.

Agriculture Minister Spilios Livanos said in a televised statement that despite its tight finances, Greece had offered one billion euros in aid to farmers last year.

“At this difficult point of multiple major outside crises, we’re standing by our producers,” he said.

The package includes subsidies to cover 80 per cent of the additional costs farmers face on their power bills from August up to December and half of this cost for January and February.

A sales tax on fertilizers will be cut by 46 per cent to 13 per cent.

Farmers, who said the latest measures are not enough, have staged several protests in the past over social security laws and pension contributions.

The farm sector accounts for a small part of Greece’s output, but it employs hundreds of thousands of people, most of them seasonal workers.

— Reporting for Reuters by Alexandros Avramidis; writing by Angeliki Koutantou.

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The vessel is expected to sail for Spain once the transfer is completed in the late evening, an agriculture ministry official told Reuters.

Spain’s government could not confirm it was expecting the return of the Elbeik, which left the Spanish port of Tarragona in December carrying nearly 1,800 cattle for sale in Turkey.

Turkish authorities rejected the animals and another shipment of 800 Spanish cattle aboard the Lebanon-flagged Karim Allah over concerns they had bovine bluetongue virus, turning the vessels into international pariahs. Since then, various countries have refused them entry even to replenish animal feed.

A Greek shipping ministry official told Reuters the Elbeik was not allowed to dock at any Greek port but it had received fuel off the island of Crete in recent days.

The vessel is currently moored off the port of Kalamata, in the southern Peloponnese peninsula, where authorities are expected to deliver food for its crew and the cattle in the coming hours.

“We are in the process of transferring the supplies for the animals and for human consumption, for the crew, to the vessel. The operation is still in progress,” a regional official said.

After the Karim Allah returned to Spain on Feb. 25 a team of government veterinarians deemed the animals unfit for transport and ordered them to be slaughtered. But the vets’ report did not say if the cattle tested positive for bluetongue, which causes lameness and haemorrhaging among cattle but does not affect humans.

The Spanish government said in February that all the animals on both ships left Spain with the necessary medical certificates.

— Reporting for Reuters by Renee Maltezou in Athens and Nathan Allen in Madrid.

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About 1,300 farmers who had arrived in Athens from the island of Crete overnight headed to the agriculture ministry, which was sealed off by police buses.

Tempers flared after reports spread among the assembled crowd that officials had refused to see a delegation from the farmers, witnesses said.

A number of farmers, some holding shepherds’ staffs, charged the building and smashed windows of two parked police buses, with police responding by using tear gas, dispersing demonstrators into sidestreets.

Riot police remained at the scene, with some demonstrators occasionally appearing to hurl stones at them. One demonstrator punched a hole in a police bus window, placing a large blue-and-white Greek flag in it. Shops in the area, a commercial district in downtown Athens, were shuttered.

Farmers have been engaged in a long-running feud with Greek authorities over social security laws introduced in mid-2016 which force them to pay on imputed earnings upfront, and higher pension contributions.

Greece is now engaged in discussions with creditors on additional economic reforms required to meet bailout obligations.

The crisis-hit country signed up to a new credit lifeline worth 86 billion euros (C$122 billion) in mid-2015, its third since 2010.

–– Writing for Reuters by Michele Kambas.

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The billion-dollar question, Anderson says, is what will happen in China. Other issues are important too, such as Greece and the chance that the U.S. Federal Reserve could jump the gun on touted rate hikes, just as the economy shows signs of flagging.

And Canada? We’re likely already in recession but just haven’t recognized the fact yet.

It all adds up to a challenging — but not impossible — environment to market grain. Opportunities will emerge, but they’ll be fleeting, so having a marketing plan and sticking to it is going to be more important than ever.

COUNTRY GUIDE: What are the main economic indicators you’re watching these days? What’s your overall take on commodity markets?

Errol Anderson: We’re definitely entering a new marketing era for commodities. For a long time the emerging economies like the BRIC countries — Brazil, Russia, India and China — have been growing very rapidly. Now we’re seeing these same countries encountering a significant slowdown with their economies turning recessionary. This has had a direct impact slowing global commodity trade. The most recent concern has been China. China’s stock market has been under considerable pressure and there are signs indicating their real estate bubble may be popping. If they’re not growing by six per cent or more, they’re really in recession. I know that sounds crazy, but the truth is their amazing growth has been so highly leveraged, they need that kind of growth to maintain the health of their credit markets.

What we’re seeing now is the early stages of their credit bubble imploding. It’s going to have a real impact on commodities, and it’s going to be painful and take awhile. What’s staggering is that China’s economy now represents 39 per cent of the total global GDP growth. China is an economic giant, and its slowdown will impact markets globally.

I think Europe and Greece are really just a side-show compared to China. It just boils down to the relative size of their economies. We pay a lot of attention to Greece because it’s right in Europe, and there could be some knock-on effects for other indebted countries like Italy, Spain and Portugal. But the loss of wealth in China due to the falling stock market is really going to affect consumption in China as well as global commodity trade. We can already see it weighing heavily on commodities like copper and iron ore. You can see it in shipping rates, with the Baltic dry index basically collapsed. Container ships are simply being dry docked.

CG: You paint a concerning picture. Until recently we’ve seen fairly rosy economic data, especially out of the U.S.

EA: I don’t think the picture of the U.S. recovery has ever been as good as a lot of people thought it was. The U.S. has experienced a modest recovery since the 2008 financial crisis. But these gains are fragile and can come under pressure, especially with economic uncertainty around the globe causing the U.S. dollar to rise. That of course makes it much more difficult for American manufacturers and exporters to compete globally, which undermines their recovery. I think this likely means that, despite public posturing, in reality we’re in a low interest rate environment for several years. An interest rate increase while economic recovery remains fragile is highly risky, and a gamble for the U.S. Federal Reserve.

True, we’ve already heard a lot of talk about U.S. interest rate increases, including some pretty strong language from Fed governors, but I think what they’re really doing is talking the talk, but not walking the walk. If the Fed does hike rates, it will be just a toe in the water to measure the potential market contagion that might occur both outside and within U.S. borders.

At the same time, we’ve seen both the IMF (International Monetary Fund) and the World Bank request that the Fed leave interest rates untouched. They’re concerned about what the global impact of that move would be, since the U.S. dollar is the de facto global currency. Take Brazil as just one example of what might happen — they owe a lot of money and it’s all in U.S. dollars. If U.S. interest rates rise, so will theirs, putting a lot of pressure on their economy just when they don’t need it, because commodity demand is falling. Also remember, by the time President Obama is out of office, the U.S. debt will have ballooned towards a staggering $20 trillion. The U.S. also has to service this debt with higher interest service charges.

It all adds up to a lot of talk, but no sudden moves. If they do move prematurely, it could seriously undermine the U.S. economy and slam the brakes back on. Global contagion could occur. In a lot of ways the U.S. is stuck in the same stagflation trap of chronic slow growth that Japan has found itself in for many years now.

As for Canada, I personally think we’re already in recession, government data just hasn’t caught up to it yet. If China sneezes, Canada catches cold. We can see this in recent moves by the Bank of Canada to reduce interest rates even further. Clearly it’s concerned with the fragility of the Canadian economy.

CG: That sounds grim. Can I safely put you on the bearish side?

EA: (Chuckles.) Sometimes I think I really need to stop being so cautious towards prices. But I’m not trying to sugar-coat commodity markets. This is the reality. Once the process of credit deleveraging occurs, commodities will again turn bullish. Commodity prices — from crude oil to precious metals to copper to grains — are going to remain capped. But there will be opportunities for pricing profits, if you’re watching for them and you’re ready to move when they occur. However, reducing your production costs and paying down debt will also be a big part of this business formula.

This is definitely going to be a year when having a marketing plan in place and doing your best to be disciplined and sticking to it will help business success. I think probably the greatest danger is going to be for producers who fall victim to picking tops — markets will rally, but rather than sell at a profit, they’ll hang on, expecting prices to recover fully towards previous years’ highs. I really don’t think, given the overall global economic picture and what that’s doing to demand, that it is in the cards for the foreseeable future.

Market recoveries are going to be fleeting and what we’re really going to see is prices see-sawing up and down. Rallies will be short lived, and sell-offs can be swift. You have to be prepared for this. If you don’t understand the nature of this beast, pricing opportunities will be lost.

CG: You say planning will be very important. What would that look like?

EA: The two leading indicators for a farmer putting together a marketing plan are how much control they feel they have over their business, and how well they’re able to sleep at night. Those are the indicators that are really important, and it all starts with the farm balance sheet. It’s not rocket science, but it does require that you get a firm handle on the financial side of your business and understand what your obligations are and when they come due. You also need to have a really good handle on what you have for sale, how much in inventory, how much it cost to produce and what a profitable price will be.

Many farmers do a really good job of this stuff already, but I do think there are some farmers who could up their game a bit. Strong record-keeping is essential, as well as noting why key decisions are made. Try to document why you made a particular sale. Over time, as you collect more and more data and history, a pattern will appear.  It’s going to reveal how you make sales and the reasoning behind cash sales. It might even help reveal patterns and market situations where you find yourself doing less-than-strategic marketing, like panic selling to meet a debt obligation or selling into a falling market.

Collecting this sort of information is really important and a valuable tool, especially over time.

As for the day to day, I can’t overstate this — don’t fall victim to pure speculation under the guise of marketing. Your goal as a grain marketer is to find opportunities to price profitably. Don’t hold on, hoping to hit the market peak. The reality is we’ve all tried, and almost none of us have succeeded. You don’t see a market peak with any certainty unless it’s in the rear-view mirror.

Generally I recommend that growers use a mix of both cash contracts and the added horsepower of the tools you can find in a commodity trading account.

I’m also generally not a big fan of the extensive use of on-farm storage. Storage can be overused and abused as a marketing strategy. One of the fallacies, as I see it, is producers looking at stored grain as purely an asset, when in reality, I think it can also be seen as a bit of a liability. There are certainly risks tied to storage. Many farmers would be, when appropriate, better served by selling the physical grain and getting early cash flow to pay bills, then turning around and buying the paper in the form of call options, to capture future market upside. I recognize this might not be a big issue for some of your readers but it’s a strategy that bears consideration.

CG: Any last strategic points?

EA: If you believe the world owes you your cost of production, you are mistaken. It’s demand that’s driving this market, not supply.

Markets can and will remain below the cost of production for long periods of time. You’ve heard me say this before, but it deserves repeating — bear markets, on average, last more than twice as long as bull markets.

This is why it’s so very important to take emotion out of your business decisions. It’s why tracking the true cost of production, reining in expenses, understanding all the tools available in your marketing tool box and setting up and executing a marketing plan are so important. Over the next few years, these concepts will all be put to the test.

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Corn prices pulled back from 2015 highs notched last week after heavy Midwest rains raised crop concerns and following a tighter-than-expected U.S. Agriculture Department supply outlook for corn and soybeans.

Traders feel that the worst of the rains may now be over, said Jim Gerlach, president of A/C Trading in Indiana.

Fields are drying out after a weekend of clear skies in Missouri and from Illinois to Ohio, added Rich Nelson, chief strategist for brokerage Allendale in Illinois.

Chicago Board of Trade September corn unofficially closed down two cents at $4.26-1/2 a bushel (all figures US$). In the previous session, the contract hit its highest price since late December.

August soybeans unofficially closed 16 cents lower at $10.22-1/4 a bushel in a setback from a six-month high touched last week.

Prices weakened ahead of a weekly U.S. crop report that is expected to show corn and soy ratings declined for the fourth straight week.

Uncertainty created by Greece’s rejection in a referendum of bailout terms from its creditors added pressure to commodity and equity markets, traders said.

Markets were also unnerved by emergency measures in China to support its tumbling stock markets, which added to worries about the world’s second-largest economy and biggest consumer of a clutch of raw materials including soybeans, analysts said.

Concerns about unfavourable weather around the world, including a heat wave in Europe and dryness in Canada, helped lift wheat futures, analysts said.

September wheat futures were up 4-1/2 cents to $5.95 a bushel at the close of trading.

— Tom Polansek reports on agriculture and ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Gus Trompiz in Paris and Colin Packham in Sydney.

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