Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2: Hello and welcome to another episode of the Odd Locks podcast.
Speaker 2: I'm Jill Wisenthal and I'm Tracy Alloway. Tracy. Canadian elections
Speaker 2: last night.
Speaker 3: Yes, big event. I think a lot of people are
Speaker 3: talking about it in the context of US politics. Right,
Speaker 3: So we just saw Mark Karney and the Liberals win,
Speaker 3: and in a lot of ways, I think people would
Speaker 3: agree that Mark Carney's sort of the antithesis of Trump, right,
Speaker 3: He's the sort of globalization Davos, former central banker guy.
Speaker 3: And the funny thing is, or the slightly ironic thing
Speaker 3: is it seems like Trump might have swung the election
Speaker 3: in the direction of the girls.
Speaker 2: Well, yeah, you go back like three months ago or
Speaker 2: four months ago or something, and it just seemed guaranteed
Speaker 2: that the Conservatives Pierre Pluliev was going to win. And
Speaker 2: then Trump started talking about making Canada the fifty first state,
Speaker 2: and suddenly fortunes turned very quickly. But that was just
Speaker 2: a news hook. We're not really doing a Canadian politics
Speaker 2: episode today, per se.
Speaker 3: We're doing something better.
Speaker 2: We're doing something better. The real reason that we're doing
Speaker 2: this episode, this just happened to be good timing for
Speaker 2: the hook. The real reason we're doing this episode is
Speaker 2: that several weeks ago, I was reading an article and
Speaker 2: I saw a title about a man named the lentil
Speaker 2: King of Saskatchewan, or not named but titled as such,
Speaker 2: and I thought to myself, the lentil King of Saskatchewan
Speaker 2: sounds like a great odd lots character, someone that we
Speaker 2: should talk to to learn about a very specific business
Speaker 2: and how it works.
Speaker 3: The lentil King of Saskatchewan, the Sultan of split Peas,
Speaker 3: the Grand Poopa of pulses, the Baron of beans, Monarch
Speaker 3: of multi grains. I can keep going.
Speaker 2: You did your prep. That's really good. Anyway, do we
Speaker 2: have the lentil King of Saskatchewan on the podcast today
Speaker 2: and we are going to really learn about how the
Speaker 2: international pulses and grains trade actually work. What does it mean,
Speaker 2: How does trading work with us, how does it work
Speaker 2: with the rest of the world. How do you build
Speaker 2: that supply chain.
Speaker 3: I'm also just incredibly surprised that Canada is such a
Speaker 3: big player in this market. I think it exports like
Speaker 3: a third of the world's lentil crop something like that.
Speaker 3: That's kind of crazy.
Speaker 2: That is a lot of lentils. But they have a
Speaker 2: lot of land in Canada for this type of thing.
Speaker 2: Not a ton of people, a lot of land. Anyway,
Speaker 2: let's learn all about the lentil trade, the pulse trade,
Speaker 2: the grain trade and so forth.
Speaker 3: Are we going to take the pulse of the pulse trade.
Speaker 2: We're going to take the pulse of the pulse trade.
Speaker 2: We are speaking with Marad al Katib. He is the
Speaker 2: president and CEO of AGT Food and Ingredients, credited with
Speaker 2: turn Saskatchewan into such a powerhouse of trade from a
Speaker 2: lentil So, Marian, thank you so much for coming on odlot.
Speaker 4: Well, thanks for having me.
Speaker 2: What did you start with? What does the lentil King
Speaker 2: of Saskatchewan do tell us about the business of an
Speaker 2: AGT Food and ingredient.
Speaker 3: Is it good to be the lentil King.
Speaker 4: It's definitely been an interesting career for me to kind
Speaker 4: of contribute to the transformation of agriculture out in Western Canada. So,
Speaker 4: you know, coming up on twenty five years since I
Speaker 4: made a decision to quit my job in government at
Speaker 4: the Governor of Saskatchewan and move to the basement of
Speaker 4: my house and drive the transformation of a cropping system that.
Speaker 4: You know, when I was a kid growing up in
Speaker 4: a little town called Davidson, Saskatchewan, we grew wheat and
Speaker 4: we grew canola, and then the farmers had to leave
Speaker 4: their soil to summer follow because the nitrogen fertilizer that
Speaker 4: they used in canola and the oil seed was so
Speaker 4: heavy that the soil needed to replenish naturally. The alternative
Speaker 4: to that to plant and nitrogen fixing legume, so lentils, chickpeas,
Speaker 4: peas beans. These crops actually fix nitrogen. They don't require
Speaker 4: nitrogen fertilizer. And so, you know, that was my bet.
Speaker 4: I mean, I was a twenty seven year old young
Speaker 4: entrepreneur who kind of looked at this situation and said,
Speaker 4: look agronomically, if we can grow these things, the world
Speaker 4: demands them. They're protein crops. If we could intersect, you know,
Speaker 4: taking our summer follow into protein and reaching global markets,
Speaker 4: I could create a business. And that was kind of
Speaker 4: the premise. So it's been quite exciting to build a
Speaker 4: multi billion dollar company based round the Regina, Saskatchewan, you know,
Speaker 4: to kind of reach the world, drive the Canadian trade,
Speaker 4: and participate in growing and consolidating a global supply chain
Speaker 4: in this business.
Speaker 3: So how big a player is Canada nowadays in pulses
Speaker 3: and grains and lentils and all those things I mentioned
Speaker 3: earlier that I think it produces like a third of
Speaker 3: the world's life until crop I did see an estimate
Speaker 3: that said sixty percent of the world's lentil crops. I
Speaker 3: went with the third trying to be conservative here, but
Speaker 3: like give us some context around where Canada sits in
Speaker 3: this space.
Speaker 4: Yeah, we would be more depend on the crop year,
Speaker 4: but somewhere around fifty percent or more of the world trades.
Speaker 4: So wow. You know, you have to recognize that the
Speaker 4: traditional growth of these crops were in areas where they
Speaker 4: consumed them, right Turkey, Middle East, India. India is the
Speaker 4: biggest giant in this business, you know, with all of
Speaker 4: the vegetarians. You know, you look at one point three
Speaker 4: billion people, four hundred and fifty million vegetarians. Vegetable protein
Speaker 4: is essential for the diet of countries, you know, in
Speaker 4: the emerging market. So you know, they grow them and
Speaker 4: they consume them. Well, what was missing was global supply
Speaker 4: in nations that could grow them but not consume them,
Speaker 4: but export them. And so that's where you know Canada
Speaker 4: came into the play, Australia, the United States. Now we
Speaker 4: have emerging origins like Extan, Russia, Ukraine. You know, the
Speaker 4: the global consumption of these crops are over one hundred
Speaker 4: million tons. Now, you know, because you know you're talking
Speaker 4: about the traditional crops that we consume. Let's let's talk
Speaker 4: about the traditional diet of the world. Let's do it rice.
Speaker 4: You know, rice is six percent protein, corn eight percent protein,
Speaker 4: lentils twenty two percent protein, faba beans thirty four percent protein,
Speaker 4: chickbas twenty six percent protein. I mean, these crops are
Speaker 4: not in the same class when it comes to protein availability,
Speaker 4: and the world is in a global protein deficit. So
Speaker 4: you know, we can we always forget one thing. We
Speaker 4: talk a lot about energy and energy security. We talk
Speaker 4: about you know, oil and gas, but we have to
Speaker 4: recognize that protein and you know, diets are human energy.
Speaker 4: And so when we look at that there's a protein
Speaker 4: deficit in the world, it's causing major socioeconomic problems. You know,
Speaker 4: let's look at a country like India. Eighteen percent of
Speaker 4: children in India are stunted due to protein deficiency. Right,
Speaker 4: the world has you know, eight hundred billion people who
Speaker 4: are malnourished on a daily basis, over two billion people
Speaker 4: who are food insecure on a daily basis. So this
Speaker 4: has become one of society's global challenges. Ten billion people
Speaker 4: by twenty fifty quantifies it to a statistic where in
Speaker 4: the next forty years we have to produce the same
Speaker 4: amount of food that the world produced in the last
Speaker 4: ten thousand years of civilization. Just wrap your head around that,
Speaker 4: go back ten thousand years, go head forty years. You've
Speaker 4: got to equal food production. And that's only if we
Speaker 4: curb food waste and we actually can store the crops
Speaker 4: that we harvest. So you know, when you look at it,
Speaker 4: it's a global challenge. And land and water are not
Speaker 4: being created, so those are the scarcest resources in the world.
Speaker 4: And Canada is blessed with a northern hemisphere. You know
Speaker 4: that ultimately is more resilient on climate change. We have
Speaker 4: arable land and water, and we have the best farmers
Speaker 4: in the world with technology and innovation driving sector. Those
Speaker 4: are all recipes for what I would call a generational
Speaker 4: economic driver for this country.
Speaker 3: Joe, could you say that Canada has been blessed in
Speaker 3: growing grains? Do you get it?
Speaker 1: Okay?
Speaker 2: I get it.
Speaker 4: I'm I'm sure you've heard of.
Speaker 2: All over over theres. I'm glad you brought that up. Actually,
Speaker 2: though about the calorie as the original unit of energy,
Speaker 2: that was important. You know, we've never had him on
Speaker 2: the podcast, but vaklov Smil talks about that when he
Speaker 2: talks about the history of energy and just these calculations
Speaker 2: in the beginning, Okay, how many calories did a firmer
Speaker 2: have to expend to produce this much land, and then
Speaker 2: so forth, and how many calories were produced and so forth.
Speaker 2: So just even thinking about it from that equation is
Speaker 2: a very like sort of important, I think, Lens, why
Speaker 2: don't you just describe the actual role of AGT foods.
Speaker 2: Where do you sit in the supply chain and dist
Speaker 2: Do you have farms yourself, do you work with farmers?
Speaker 2: Do you contract with them? Like talk about where you
Speaker 2: sit and how a lentil grown in Saskatchewan gets to
Speaker 2: a consumer in say, India.
Speaker 4: Well, the entire business plan was set up modern state
Speaker 4: of the art processing infrastructure in the areas where we
Speaker 4: grow these crops. So we contract directly with farmers. We
Speaker 4: are the ones who transform their products into saleable you know,
Speaker 4: human consumption products. So we own factories in Canada, the US, Australia,
Speaker 4: South Africa, Turkey. So I started with one small, little
Speaker 4: factory in Regina. We now have forty six manufacturing and
Speaker 4: processing facilities and five continents around the world. I started
Speaker 4: in the basement of my house. There's now thirty six
Speaker 4: hundred employees. Wow. So you know what we do is
Speaker 4: we take those crops, we clean them, we size them,
Speaker 4: we peel them, we split them, we can them, we
Speaker 4: package them, we put them out and we fraction them
Speaker 4: into protein starts, f flowers. I mean, we put them
Speaker 4: into food products. We do the full range of value adding.
Speaker 4: And in the scale of our business now you know,
Speaker 4: let's say around three point two billion in revenue this year,
Speaker 4: we become a major global supply chain in this particular
Speaker 4: segment of the business. In fact, if I look at
Speaker 4: you know, containerized agricultural Shipments AGT would be among the
Speaker 4: two or three largest containerized shippers of agriproducts in the
Speaker 4: entire world. So you know, we shipped to one hundred
Speaker 4: and ten countries actively.
Speaker 2: And how does it get there? Like what is the okay,
Speaker 2: So from a farmer in Saskatchewan, how many links are
Speaker 2: there on that chain.
Speaker 4: So we'll take it into let's say a farmer in Eston, Saskatchewan,
Speaker 4: We'll deliver to our location at Aston, Okay. We will
Speaker 4: then take that grain. We'll put it into a railcar
Speaker 4: that we own. So those owned railcars then go into
Speaker 4: the CN rail system. They get transported to a port facility.
Speaker 4: Let's say I just did one as an example, and
Speaker 4: on May the sixth, we're going to ship a vessel
Speaker 4: of lentils to Turkey. So those Eston farmers would have
Speaker 4: filled the railcars. We're shipping it to thunder Bay. At
Speaker 4: thunder Bay, we have an ocean terminal where we'll load
Speaker 4: a vessel. That vessel will transport twenty one thousand tons
Speaker 4: of lentils that will go to Turkey. They will be
Speaker 4: offloaded in the port of Meerson, Turkey, which is in
Speaker 4: the southern Mediterranean. We have factory seven kilometers for the port.
Speaker 4: Will peel them, split them, polish them, package them, and
Speaker 4: then they'll be shipped to Iraq. They'll be shipped into
Speaker 4: the Gaza refugees. They'll be shipped into the Middle East
Speaker 4: region and they'll be consumed locally in the entire region
Speaker 4: on the food side. So you know where we play
Speaker 4: is in the entire supply chain, taking it right from
Speaker 4: the farmer right through to the distribution directly onto the
Speaker 4: consumer shelf. And you know, that was the strategy that
Speaker 4: we wanted to to build out. It gives us resiliency.
Speaker 3: I was going to ask, is it normal for agricultural
Speaker 3: company is to actually own their own transportation capital. You
Speaker 3: mentioned train cars just then. That seems extremely vertically integrated.
Speaker 4: Well, yeah, actually I was definitely not, you know, the
Speaker 4: normal thought and that In twenty fifteen, I decided to
Speaker 4: build a transportation business, and so we bought six hundred
Speaker 4: and fifty kilometers of short line railway. We bought the
Speaker 4: Saskatchewan government grain car fleet. So when the Canadian Wheatboard
Speaker 4: was dismantled, the Saskatchewan flagged grain cars, I bought them.
Speaker 4: We bought thirteen locomotives. We set up our own transportation infrastructure,
Speaker 4: linked it in a long term agreement to Cnrail, and
Speaker 4: you know we're able to access it through ocean port infrastructure.
Speaker 4: We actually took that business in twenty twenty five in January,
Speaker 4: and we sold it for one hundred and ninety two
Speaker 4: million dollars to an infrastructure fund in the United States,
Speaker 4: and then we contracted them back to provide US service
Speaker 4: for the next twenty year. So you are correct. We
Speaker 4: actually built out a transportation infrastructure that didn't exist to
Speaker 4: handle these kinds of commodities, and then we found a
Speaker 4: partner to run it for the long term and it
Speaker 4: gives us a competitive advantage to get our products to market.
Speaker 2: I have a question. You know, you mentioned that the
Speaker 2: only scarce resources are land and water. Can you talk
Speaker 2: about yields on an acre or yields on a given
Speaker 2: farm today versus when you got started in the industry,
Speaker 2: and how what you've seen in terms of technology and
Speaker 2: productivity growth at the land level.
Speaker 4: Massive massive transformation, So precision agriculture, digital infrastructure has transformed
Speaker 4: the productivity of Canada. And you know, when I was
Speaker 4: a kid growing up in that little village of Davidson,
Speaker 4: twelve hundred people in the middle of Saskatchewan. You know,
Speaker 4: as an immigrant Turkish family, the farmer would go out
Speaker 4: and kick the dirt. He would put his hand into
Speaker 4: the soil. He'd have his wife with him and say
Speaker 4: what do you think should we go? And she'd say, yeah,
Speaker 4: let's go, and they would go and start seeding. Today,
Speaker 4: we're soil sampling. We're analyzing the soil and the nitrogen
Speaker 4: in the soil. There's precision weather stations that are measuring moisture.
Speaker 4: We have zero minimum tillage where GPS systems are giving
Speaker 4: the farmer the exact placement of seed fertilizer in a
Speaker 4: single pass without breaking the soil using air channels. We're
Speaker 4: putting the seed in a precision basis to maximize the yield,
Speaker 4: to lower the amount of nitrogen fertilizer being used in
Speaker 4: all crop rotations, which ultimately saves inputs and lowers the
Speaker 4: carbon intensity of our agriculture. Our yield curves have been
Speaker 4: massively increasing, you know, to where if I look at
Speaker 4: the next decade ahead in Saskatchewan, I'm forecasting seven to
Speaker 4: ten million additional tons of grain from the same amount
Speaker 4: of acres that are being seated. You know, that is
Speaker 4: a massive.
Speaker 2: Wait, what's the baseline, what's the base? Seven to ten million?
Speaker 2: On top of how many.
Speaker 4: We're growing about thirty million tons, so we're gonna have
Speaker 4: another seven to ten million. I mean, you're talking about
Speaker 4: twenty to thirty percent yield increase over the next seven years.
Speaker 4: I mean, when I chaired the National Strategy Table for
Speaker 4: Agriculture and Food for the Government of Canada. We set
Speaker 4: a target in twenty nineteen that the agriculture sector in
Speaker 4: our country would grow from forty five billion to eighty
Speaker 4: five billion of exports in a five year cycle, and
Speaker 4: domestic agricultural output would grow from one hundred and twenty
Speaker 4: billion to one hundred and forty five billion. And we
Speaker 4: reached that target in three years. I mean, what sector
Speaker 4: of our economy can deliver sixty five billion of growth
Speaker 4: in three years. Agriculture did that in this country. So
Speaker 4: the tangibility of that opportunity of global food insecurity, the
Speaker 4: productivity of precision agriculture in our country, and you know,
Speaker 4: the ability to get our products to market. You know,
Speaker 4: this is the recipe that I believe is going to
Speaker 4: be a big part of the government economic agenda going forward. So,
Speaker 4: you know, we talk a lot about natural resources that
Speaker 4: are in conflict in certain mindsets, whether it be oil
Speaker 4: and gas or mining. There's very little controversy on the
Speaker 4: growth of the natural resource sector in agriculture. So from
Speaker 4: that perspective, I see that as being a key opportunity
Speaker 4: for this country, you know, and one that I'm very
Speaker 4: excited about for the next twenty years of my career.
Speaker 3: So I take the point about yields having been improved.
Speaker 3: But at the same time, there's a lot of talk
Speaker 3: about soil exhaustion, right And one of the reasons this
Speaker 3: is on my mind is because I was gardening over
Speaker 3: the weekend on an old farm property and the soil
Speaker 3: is just terrible. It's basically dust like, there's no tilth
Speaker 3: I think I found one earthworm in like six hours
Speaker 3: of digging. How big a problem is soil depletion? And
Speaker 3: you touched on this earlier, But what role can lentils
Speaker 3: and beans play in that?
Speaker 4: Well? And then that's actually the key. The key is
Speaker 4: is that farmers in Western Canada are now practicing a
Speaker 4: sustainable three crop rotation. So one year they'll grow that
Speaker 4: wheat like when I was a kid, the next year
Speaker 4: they'll grow an oil seed like canola, and then the
Speaker 4: year after that they'll plant the lagoome that will fix
Speaker 4: the nitrogen. By using zero minimum tillage, we're conserving soil moisture,
Speaker 4: we're managing pests and the health of the soil, and
Speaker 4: we're actually using farming practices where without tilling we're returning
Speaker 4: biomass into the soil. So from that perspective, when I
Speaker 4: look at the sustainability of soil health, the farmers in
Speaker 4: Western Canada have gotten And you know, that is something
Speaker 4: that bothers me is people talk about how regenerative agriculture
Speaker 4: is such a key part. Well, in Western Canada, we've
Speaker 4: been doing regenerative agriculture for the last forty years. This
Speaker 4: is something that is actually foundational to the success of
Speaker 4: the Western Canadian and I mean the Canadian agriculture sector
Speaker 4: in general. So you know, I think that when I
Speaker 4: look at soil depletion and soil health, it's about farmers
Speaker 4: pushing the wrong rotations, growing crops on top of crops,
Speaker 4: the same crops. You know, ultimately, if you don't rotate,
Speaker 4: you have pests that multiply, you have diseases that ultimately
Speaker 4: get resistant to any type of management. So, you know,
Speaker 4: this kind of diversity of our agricultural system is one
Speaker 4: that not only has to be celebrated, but it's actually
Speaker 4: yielding that yield gain. So you know, not only is
Speaker 4: our soil health at a peak, but it's also something
Speaker 4: I want to be clear, we can't take for granted.
Speaker 4: We have to be continuously innovating to make sure that
Speaker 4: we maintain that. I mean, I say, the canola fields
Speaker 4: of Saskatchewan are the same as the oil fields of
Speaker 4: Saudi Arabia, only every year it replenishes naturally. So we
Speaker 4: can take crops, we can produce renewable fuels, we can
Speaker 4: take crops, extract protein and feed the world. But we
Speaker 4: have to make sure foundationally that soil health is at
Speaker 4: the forefront. And I think it is in our farmer's
Speaker 4: minds and then the practices that they do.
Speaker 2: So you know, you've described this global supply chain that
Speaker 2: exists in the fact that you can get the lentil
Speaker 2: product from a farmer in Saskatchewan all the way to
Speaker 2: a consumer in India or Iraq or Turkey, et cetera. Obviously,
Speaker 2: we're having this conversation, at least on the US side,
Speaker 2: with this turn against globalized supply chains, globalized trade and
Speaker 2: so forth. Talk to us a little bit about how
Speaker 2: you see the state of US Canada agg trade, or
Speaker 2: give us the sort of the short history of the
Speaker 2: various turns of the dial there and how some of
Speaker 2: these conversations are affecting your business.
Speaker 4: Look, I think We've got to recognize one thing. We
Speaker 4: have a president in the United States today who's just
Speaker 4: very loud and using tariffs as the mechanism to not
Speaker 4: only provoke conversation but to drive policy protectionists. Agricultural policies
Speaker 4: in the United States are not something new, you know.
Speaker 4: I always have to remind people that country of origin
Speaker 4: labeling was a Barack Obama policy that you know, continued
Speaker 4: through the Trump administration and into the Biden administration. So
Speaker 4: you know, every government in the world, agriculture is the
Speaker 4: most political business in the entire globe because farmers have
Speaker 4: to be protected by governments that are elected. Yet, food
Speaker 4: inflation and food security are paramount considerations in the health, wealth,
Speaker 4: and security of every nation in the world. So when
Speaker 4: we look at it, let's not forget one thing. When
Speaker 4: a baby is hungry, they cry, When an eighteen year
Speaker 4: old man is unemployed in hungry, they protest. So you know,
Speaker 4: ultimately a big part of civil obedience in the world
Speaker 4: is available food, and that growing food insecurity is one
Speaker 4: that I think, you know, is going to be paramount.
Speaker 4: So when I look at even US policy, look, food
Speaker 4: security is a foundational part of US intelligence and foreign policy.
Speaker 4: And so from that perspective, you know, I believe that
Speaker 4: agricultural trade will have to be preserved as a part
Speaker 4: of the overall policy framework. So you know, we're going
Speaker 4: to see tariffs, We're going to see protectionist measures being
Speaker 4: more prevalent in the world. But I do think that
Speaker 4: ultimately food are going to be concessionary items. Governments are
Speaker 4: going to allow them to flow. Governments will use tariffs
Speaker 4: to protect their farmers when they need to at times
Speaker 4: when they harvest their crops, but they need food available.
Speaker 4: And you know the COVID post supply chain disruptions and
Speaker 4: food lines and food inflation, and you know, food being
Speaker 4: a big driver of that inflationary environment in the world
Speaker 4: world is something that everybody recognizes can't continue. On the
Speaker 4: US policy side, domestic agriculture in the US and Canada
Speaker 4: are very integrated. So if I look at you know,
Speaker 4: the pasta on the shelves of the US consumer come
Speaker 4: largely from Durham wheat in Western Canada. The overall integration
Speaker 4: of our livestock sectors, cropping sectors are there, and ultimately
Speaker 4: I think we're going to see further integration. We're going
Speaker 4: to see you know, getting over this current protectionist conflict.
Speaker 4: Leyden dialogue to recognizing that the Americas integration and more
Speaker 4: reliance on each other as nations in the Americas is
Speaker 4: going to be part of economic prosperity. And you know,
Speaker 4: I think that, you know, if I look at the
Speaker 4: Trump administration, you know, kind of policy on Canada. We
Speaker 4: have to just remind everybody very clearly to have comm heads.
Speaker 4: Thirty one US states have Canada as their largest trading partner.
Speaker 4: The ultimate availability of food in the United States is
Speaker 4: you know, not completely reliant, but we certainly have a
Speaker 4: big influence on food prices. And so you know, I'm
Speaker 4: a very strong optimist that agriculture will continue its integration
Speaker 4: and that you know, ultimately food and I believe energy
Speaker 4: are going to be the two sectors. And the third
Speaker 4: one from a Saskatchewan perspective is potash. I mean, eighty
Speaker 4: percent of the potash in the United States, which is
Speaker 4: a necessary nitrogen element you know, comes from Canadian minds.
Speaker 4: So you know, from that perspective, you know, there's certain
Speaker 4: sectors that I think are mutually beneficial that are going
Speaker 4: to enjoy heightened access in some sort of resolution.
Speaker 3: Okay, so agriculture might be special in one way or another.
Speaker 3: But just to drill down a little bit into specifics,
Speaker 3: if the US slaps tariffs on Canadian lentils, what is
Speaker 3: the first thing that happens in your supply chain? And
Speaker 3: I guess maybe we could go back in history and
Speaker 3: talk a little bit about thee from India on lontals
Speaker 3: because you have experience with this, right like you have
Speaker 3: gone through this process, So what exactly happens.
Speaker 4: Agriculture is no different than any other sector, except that
Speaker 4: our markets are already a lot more diversified than you know,
Speaker 4: other sectors. So you know, when I look at the
Speaker 4: crop sectors in particular wheat, canola, and pulses, we do
Speaker 4: have shipments into the US on a regular basis, but
Speaker 4: it's still making up a relatively small percentage when you
Speaker 4: look at it compared to other sectors' reliance on the US.
Speaker 4: So you know, one of the key things to having
Speaker 4: strength in a tariff or a trade protectionist environment is
Speaker 4: to have alternative markets. Now, for US, I worry more
Speaker 4: about the reciprocal tariffs in places like China, India and
Speaker 4: other large markets than I do only the US market.
Speaker 4: I mean, it's one of the considerations. We want that resolution,
Speaker 4: but you know what we do is we pivot. You know,
Speaker 4: when we were facing the tariffs on the March deadline
Speaker 4: than the April deadline, you know, as a company, we
Speaker 4: already prepared for this. We have a North Dakota manufacturing
Speaker 4: facility that was going to manufacture more for the US market.
Speaker 4: We were going to switch our supply chain to reliance
Speaker 4: on North Dakota and Montana, and we were going to
Speaker 4: take the Western Canadian product and we were going to
Speaker 4: go out to the Middle East into other markets in Asia.
Speaker 4: We're going to put a height and focused on South America,
Speaker 4: and we're going to ship into Europe. So you know,
Speaker 4: that's where you have to be. And I think that
Speaker 4: this is ultimately you know, my dialogues with Prime Minister
Speaker 4: Carney prior to the election, of my dialogues after with
Speaker 4: Prime Minister Carney are going to be trade diversification agenda
Speaker 4: is not something that we can blink at, no matter
Speaker 4: how quickly or how comprehensively. The resolution is with the US,
Speaker 4: we need to finally execute trade diversification in this country.
Speaker 4: We need to recognize that our industries have become overly reliant.
Speaker 4: We've been complacent. You know what, this has to be
Speaker 4: a wake up call to my colleagues in every industry
Speaker 4: in this country. Wake up over reliance. Eggs in one
Speaker 4: basket is a dangerous remedy for long term sustainable health
Speaker 4: of your business. And you know, ultimately that's where we
Speaker 4: have to go. We need bilateral trade agreements. We need
Speaker 4: to resolve India and China as powerhouses that balance our
Speaker 4: reliance on the US, and we need to monetize the
Speaker 4: European Union trade agreement that we've already signed. We need
Speaker 4: to ensure that we get relevance with these countries. And
Speaker 4: agri food, energy and potash and uranium are four things
Speaker 4: that get us relevance with these nations. We need to
Speaker 4: parlay that into free trade agreements, bilateral exchange agreements, and
Speaker 4: we need to get ourselves market access.
Speaker 2: Obviously, shiating free trade or bilateral trade agreements with different
Speaker 2: counterparts is an important element. There's also a physical element, right,
Speaker 2: the quality of rail infrastructure, the quality of export terminal
Speaker 2: and I guess on the other side, import terminal infrastructure.
Speaker 2: In the context of energy, we hear a lot about
Speaker 2: this and are we building export terminals fast enough? And
Speaker 2: is it cheap enough, is it economical? Talk to us
Speaker 2: about the sort of like the physical things that need
Speaker 2: to get built, as you put it, monetize these relationships,
Speaker 2: and like I don't know in the US, I know
Speaker 2: that building everything is crazy expensive these days. What does
Speaker 2: the state of this physical trade infrastructure look like in
Speaker 2: Canada right now?
Speaker 4: We have we have to acknowledge that we've got, you know,
Speaker 4: major challenges. I mean, we've got large geographic land base,
Speaker 4: we have mountains between production regions in Western Canada and
Speaker 4: the coast in Vancouver, and we have minus forty degree temperatures.
Speaker 4: So you know, these are all constraints that we have
Speaker 4: to live with. And you know, one of the things
Speaker 4: you know, I've become a little bit known for in
Speaker 4: this country is my adage that if I was Prime
Speaker 4: Minister for one day, I would invest one hundred billion
Speaker 4: dollars in trade infrastructure because that ultimately would pay dividends
Speaker 4: for generations to come. So, you know, we need to
Speaker 4: revive the gateway strategies. If I look back at the
Speaker 4: two thousand and five twenty eleven period, the Asia Pacific
Speaker 4: Gateway initiative is one of the most successful in recent times.
Speaker 4: In Canada where you had you know, municipal governments, provincial governments,
Speaker 4: private sector players, Class one railways, port authorities, poort infrastructure,
Speaker 4: private sector players working on first mile and last mile,
Speaker 4: and we made major progress on developing the Asia Pacific Gateway.
Speaker 4: We need to acknowledge that we need to build a
Speaker 4: trade infrastructure for thirty and forty and fifty years from now,
Speaker 4: not just for thirty and forty and fifty weeks from now.
Speaker 4: We need to relocate rail lines out of the center
Speaker 4: of communities across our nation, to plan for development of
Speaker 4: industrial and redissidential developments and allow for the trade infrastructure
Speaker 4: to have room to scale. You know, as we continue
Speaker 4: to build out. I mean Saskatchewan is a perfect example.
Speaker 4: As I said, seven to ten million more tons of agri.
Speaker 4: With the BHP investment of twelve billion dollars in potash
Speaker 4: k Pluss mine expansion and the expansions that are on
Speaker 4: for nutrient and mosaic, you have roughly about twelve million
Speaker 4: additional tons of potash that will come online over the
Speaker 4: next decade. And you know, if we get oil and
Speaker 4: pipelines and we get the dry bull commodities on rail,
Speaker 4: we have some capacity, but We've got to think about
Speaker 4: what we're going to be thirty years from now. If
Speaker 4: we continue on these yield trends, we're going to reach
Speaker 4: one hundred million tons of production one day. Today our
Speaker 4: average is fifty five million tons in this country in Agrie.
Speaker 4: So from that perspective, the economic benefit is there as well,
Speaker 4: which ultimately, you know, funds the Canadian way of life,
Speaker 4: social programs like healthcare, education, you know, the things that
Speaker 4: we as Canadians value, you know, in terms of being
Speaker 4: Canadian versus being living in another nation around the world.
Speaker 4: So that's the opportunity. And trade infrastructure. I have a
Speaker 4: level of optimism that, you know, our newly elected Liberal
Speaker 4: government and frankly, it would have been the same if
Speaker 4: the Conservatives were elected. Trade infrastructure is recognized as an
Speaker 4: essential element of that trade diversification strategy. We focused a
Speaker 4: lot on north south infrastructure and not that we should
Speaker 4: diminish that because I think people got to recognize we're
Speaker 4: not saying trade less with the US. We're saying trade
Speaker 4: our growth with new countries. Over time, we will diversify.
Speaker 4: Trade diversification couldnot happen in one day, one year, or
Speaker 4: even in ten years, you know, we have created an
Speaker 4: economy that's reliant over decades. We need to diversify over
Speaker 4: the next decades.
Speaker 3: So I know it's early days, but just on this point,
Speaker 3: farming is clearly a very capital intensive business and you
Speaker 3: want to be investing in trade, infrastructure and things like that.
Speaker 3: Have you noticed any changes in capital availability post Trump's win?
Speaker 3: So are people maybe they feel more cautious because there's
Speaker 3: all this policy uncertainty, or maybe people are directing capital
Speaker 3: away from the US and towards Canada. Now, I don't know,
Speaker 3: have you noticed any shifts in the pattern?
Speaker 4: I think that you know, certainly short term disruptions like this,
Speaker 4: you know, cause capital to be nervous. You know, there's
Speaker 4: no doubt about it. But you know, if I look
Speaker 4: at you know my partners in agt are you Fairfax
Speaker 4: Financial is a sixty percent owner of my company. So
Speaker 4: prem Watts believed in the long term growth of an
Speaker 4: agri food champion from Canada. Along with Omer's pension program.
Speaker 4: You know, those two companies own seventy two percent of
Speaker 4: my shares along with myself. And you know that kind
Speaker 4: of capital source is recognizing canada role to build billions
Speaker 4: of growth. You know, in this sector. In the trade
Speaker 4: infrastructure side, I think that there's a recognition that, you know,
Speaker 4: we're not building this only you know, to talk about, oh,
Speaker 4: we got great infrastructure. There's a large economic benefit that
Speaker 4: will come along with it that can allow the tax
Speaker 4: base to be directed into the things that need to
Speaker 4: be done in this country. So, you know, when I
Speaker 4: look at that recognition again not looking with rose colored glasses,
Speaker 4: I believe capital will flow. We need to do a
Speaker 4: better job of figuring out how to monetize trade infrastructure
Speaker 4: into projects that could be funded in more traditional project finance.
Speaker 4: So you know, it's easy on a toll road, you
Speaker 4: have an income stream and someone will finance that. How
Speaker 4: do you finance the growth of Class one railway infrastructure
Speaker 4: or bridges that go to the ports, or you know,
Speaker 4: port infrastructure. You need to come up with economic models
Speaker 4: that create cash. And I remind people that extra revenue
Speaker 4: is ca U and cost savings in the supply chain
Speaker 4: are also cash. So from that perspective, you know, I
Speaker 4: think that we're going to see a capital attraction because
Speaker 4: Canada has such a fundamental competitive advantage in the natural
Speaker 4: resources sector that capital will come here get our products
Speaker 4: to the places that demand them.
Speaker 3: So speaking of cost savings in the supply chain, one
Speaker 3: of the things we've seen since the tariff's announcement is
Speaker 3: a slow down in global shipping, or a slow down
Speaker 3: at least in shipping between China and the US. Does
Speaker 3: that affect you at all, because I imagine, on the one hand,
Speaker 3: maybe container rates start coming down, which would be good
Speaker 3: for you. But on the other hand, my understanding is
Speaker 3: that a lot of your produce is shipped via back hall.
Speaker 3: So the ships come over carrying I don't know, toys
Speaker 3: or whatever, and then they're loaded with all the agricultural
Speaker 3: products and they're sent out into the world where ever
Speaker 3: those are going to be processed or sold. So are
Speaker 3: you experiencing any changes in terms of the actual flow
Speaker 3: of ships here.
Speaker 4: That's a great question, and you are absolutely correct. The
Speaker 4: trade flow in the world is dependent on balance. We
Speaker 4: can only fill what comes in full, we send it
Speaker 4: back full. So you know, ultimately it has been an
Speaker 4: Asia trade into North America and a North American trade
Speaker 4: back out to Asia. So far, you know, the disruption
Speaker 4: time period has been small enough that we haven't felt
Speaker 4: it yet, but it's something we're watching very very closely. Now,
Speaker 4: what I think we have to recognize is that although
Speaker 4: President Trump would like to have manufacturing at the snap
Speaker 4: of a finger in the US, it's going to take time.
Speaker 4: If they do succeed in building out domestic capacity for
Speaker 4: a number of these consumer goods that they want to produce,
Speaker 4: and then we have to also be realistic that the
Speaker 4: cost of manufacturing and the cost of production in the
Speaker 4: US is going to be a lot higher on a
Speaker 4: number of these items. So, you know, I still have
Speaker 4: a view that you know, there will be some sort
Speaker 4: of a balanced resolution where there will be some tariffs,
Speaker 4: but there ultimately will still be production around the world
Speaker 4: coming into North America. So you know, I think that
Speaker 4: you know, no matter what, if it doesn't come from China,
Speaker 4: it may have to come from Korea, or it might
Speaker 4: come from you know, Indonesia, or it may come from
Speaker 4: you know, another nation that is set up to manufacture.
Speaker 4: You know, if you look at you know, Apple as
Speaker 4: an example as saying, now, well, we're going to stop
Speaker 4: shipping out of China, We're going to start shipping out
Speaker 4: of India, you know, there's ultimately going to be trade
Speaker 4: flows that are going to come in. So we're watching
Speaker 4: it carefully. We are definitely concerned, but we ultimately know
Speaker 4: the consumption's not going away, so that consumption has to
Speaker 4: be filled somehow, and ultimately it will ultimately be through
Speaker 4: a combination long term of more domestic manufacturing. But you know,
Speaker 4: at the end of the day, that's not going to
Speaker 4: happen in the near term. Next five to seven years
Speaker 4: are going to be transition years. And you know, again
Speaker 4: our supply chains will have to also transition. If we
Speaker 4: don't have container availability, what you'll see is bulk supply
Speaker 4: chains getting bigger, like we're shipping those lentils in a
Speaker 4: vassel to Turkey, and we'll have to be manufacturing elsewhere
Speaker 4: as well, So we'll have to be a part of
Speaker 4: global value chains as they settle in this new geopolitical
Speaker 4: and trade regime in the world.
Speaker 2: I just want to get back to the politics of
Speaker 2: farming for a second, and you mentioned, you know, this
Speaker 2: is one of the most politically sensitive topics because every
Speaker 2: government feels some impulse to take care of their local farmers,
Speaker 2: and also every citizen in the world of every country
Speaker 2: eats and is sensitive to food inflation. And Tracy asked
Speaker 2: about India earlier and they've had an on again, off
Speaker 2: again lentil important tariff. Can you talk a little bit
Speaker 2: more about what you saw there specifically, like both I
Speaker 2: guess the domestic politics of lental tariffs and then again
Speaker 2: like how it affected your business specifically as they've toggled
Speaker 2: that on and off.
Speaker 4: Look, you know, I've been a very vocal advocate over
Speaker 4: the last couple of years to have the Canadian industry
Speaker 4: recognize that the domestic agricultural policy of India is actually
Speaker 4: a sensible policy that the Modi government has no choice
Speaker 4: but to do it. You know, Ultimately, nations in the
Speaker 4: world have to build local production to insulate themselves from
Speaker 4: food security issues. So you know, the view that twenty
Speaker 4: two million tons of production of pulses in India should
Speaker 4: become thirty five million one day will still not even
Speaker 4: keep pace with their domestic consumption. So there's still going
Speaker 4: to be a net importer at that. So how can
Speaker 4: we as a nation, you know, fault another nation from
Speaker 4: trying to encourage local production. We've shifted our dialogue with
Speaker 4: India to say, look, we are the reliable partner to
Speaker 4: fill your gaps. We're going to see in countries like
Speaker 4: India Turkey. Turkey has been doing this for decades from
Speaker 4: May until September of every year when they harvest their crop.
Speaker 4: In June, Turkey has a lentil tariff on. So if
Speaker 4: you're bringing in lentils from Canada, they put a tariff
Speaker 4: on to protect their domestic price of lentils for their farmers,
Speaker 4: and September they take it off to protect against food inflation.
Speaker 4: So these are the ways that tariffs are used to
Speaker 4: build local prices farm receipts and yet not sacrifice the
Speaker 4: domestic prices for affordability. India is going to do the
Speaker 4: same thing, and I think ultimately it's a sensible policy.
Speaker 4: We've got to recognize that trade relationships are no longer
Speaker 4: going to be how do we drive by and sell.
Speaker 4: Nations in the world are looking for two way trade
Speaker 4: investment and innovate and technology development and transfer. So you know,
Speaker 4: we as a company AGT are taking that view. We're
Speaker 4: building a new processing plant near Mumbai where we're going
Speaker 4: to be you know, taking Canadian materials. We're going to
Speaker 4: be processing them in India and we're going to be
Speaker 4: playing in the local market, and we're also going to
Speaker 4: be exporting out of India to nations in Asia where
Speaker 4: they have a competitive advantage. So you know, that's the
Speaker 4: way that you build the long term trade relationship. You know,
Speaker 4: recognizing that we can't sit here and say we want
Speaker 4: terror free access to all markets around the world. We
Speaker 4: have supply management in our country. We're restricting the access
Speaker 4: to our agricultural sector for nations around the world. So
Speaker 4: you know, what you want to be free traders, Let's
Speaker 4: concentrate on the things that we need to do in
Speaker 4: this country. Inner provincial trade barriers have to come down,
Speaker 4: we have to open up our domestic agricultural markets, and
Speaker 4: we have to recognize that we're going to have more
Speaker 4: to gain from free trade than we are to lose
Speaker 4: from free trade. You know, I see this as a
Speaker 4: transitional time where you know, ultimately, you know, deals are
Speaker 4: going to get done and trade is going to happen.
Speaker 4: It has to because economies can't transition quick enough to
Speaker 4: fill the gaps. That's what's ultimately going to drive it.
Speaker 3: So everything you've outlined sounds very sensible. Boosting production in
Speaker 3: North Dakota, setting up more bilateral trade relationships, maybe moving
Speaker 3: some processing capacity elsewhere in the world. But it also
Speaker 3: sounds very expensive and very difficult to do if you
Speaker 3: are a smaller scale farmer. And I guess one of
Speaker 3: the concerns with the rise in trade protectionism in general
Speaker 3: is that you are going to get even more consolidation
Speaker 3: in agriculture. And we know that small scale farmers have
Speaker 3: been suffering for a while. It's difficult to compete against
Speaker 3: giants in the agricultural business. Is that going to become
Speaker 3: even more of a trend in the current circumstances? Like
Speaker 3: is scale going to be essential basically to surviving?
Speaker 4: Scale today is essential to surviving. But that doesn't mean
Speaker 4: that small and medium enterprises don't have a role to
Speaker 4: play in scale. You know, I always counsel entrepreneurs. There
Speaker 4: are you know, different ways in which to achieve scale.
Speaker 4: You can build scale, you can buy scale, or you
Speaker 4: can partner scale. Right, that's it. That's the key. And
Speaker 4: you know what we have not had enough of in
Speaker 4: our economy in Canada. It's a recognition, you know. I
Speaker 4: call it the dinner diner phenomenon. Do you want to
Speaker 4: be dinner or do you want to be a diner?
Speaker 4: I want to be a diner. I want to eat
Speaker 4: other businesses and grow my scale. I don't want to
Speaker 4: build myself to be eaten by somebody else. So ultimately,
Speaker 4: you know, what we encourage is companies have to build
Speaker 4: their ourselves into a link in the global value chain.
Speaker 4: They have to recognize what role they do play and
Speaker 4: they have to link themselves into a supply chain. That
Speaker 4: makes a lot of sense. You know, I was in
Speaker 4: Turkey three days ago. In fact, I was there on
Speaker 4: the earthquake day in Istanbul, so scary day that day,
Speaker 4: but you know, ultimately I was in Turkey meeting with
Speaker 4: you know, customers from Japan. You know, we've linked with
Speaker 4: the major Japanese trading houses on the development of our
Speaker 4: pasta manufacturing business because the large Japanese trading houses have
Speaker 4: strong linkages into the Japanese retail and the Asian distribution
Speaker 4: side of things. So you know, we've recognized, even as
Speaker 4: a relatively large company that we don't have the scale,
Speaker 4: and we're partnering with companies that have one hundred billion
Speaker 4: dollars in revenue because we can't solve that distribution. Or
Speaker 4: in India, we're in discussions with the large majors like
Speaker 4: Tata or Reliance or you know, those types willmar a
Speaker 4: Danny group. I mean, these are the type of companies
Speaker 4: that dominate, you know, the distribution in those nations. So consolidation,
Speaker 4: you know at the farm gate is already happening. I mean,
Speaker 4: can you can you imagine when I was a kid
Speaker 4: growing up again, you know, we as a family had
Speaker 4: four thousand acres of farmland. That was a big farm
Speaker 4: in nineteen seventy eight. Today, at four thousand acres, a
Speaker 4: family can't farm full time. You know, they ultimately will
Speaker 4: need to have a second job. You know. You basically
Speaker 4: say today a mother, father, and a daughter who are
Speaker 4: farming would have to be twelve thousand acres in order
Speaker 4: to sustain a family. So from that perspective, you know, again,
Speaker 4: scale is actually part of our advantage in our agricultural system.
Speaker 4: And we're a low cost, high quality producer. We're competing
Speaker 4: against nations that have one acre and two acre and
Speaker 4: five acre farms that are very manual and not mechanized.
Speaker 4: So ultimately, you know, we have to recognize. I don't
Speaker 4: think it's a bad word. I think it's transition. But
Speaker 4: I do think that SMEs are key. Small and medium
Speaker 4: enterprises are key because they're nimble, they can innovate, they
Speaker 4: can deliver a product that is fitting. You know, sometimes
Speaker 4: bigger companies aren't good at doing things like that. We're
Speaker 4: not nimble enough to do it. We need SMEs to
Speaker 4: make us competitive. We've got to build the ecosystem and
Speaker 4: the linkages. We haven't done that in this country.
Speaker 2: I just have one last question, and it sort of
Speaker 2: relates to the productivity gains that you've seen over the
Speaker 2: years in farming from all kinds of like sensors and
Speaker 2: maybe there's drones involved and stuff like that, or lower
Speaker 2: cost of tractors or whatever. There's obviously a lot of
Speaker 2: anxiety about how much technological products come from China. When
Speaker 2: you look at the farming business in Canada, how much
Speaker 2: of that tech stack that drives productivity gains these days
Speaker 2: comes from a Chinese tech basically, or Chinese manufacturing in
Speaker 2: the form of farm equipment.
Speaker 4: I would say, you know, from my experience, there'd be
Speaker 4: a lot more reliance on the overall Asian manufacturing, not
Speaker 4: just China, and I think that's an advantage for us.
Speaker 4: You know, again, a lot of the sensors and things
Speaker 4: that we use are now manufactured in so many nations
Speaker 4: around the world that we can kind of dodge that.
Speaker 4: They think the key is you know, on the manufacturing side.
Speaker 4: You know, a lot of the farm equipment is you know,
Speaker 4: still very much dominated by US manufacturers, but a lot
Speaker 4: of the core technologies, like zero minimum tillage. You know,
Speaker 4: the center of manufacturing for that technology is Western Canada.
Speaker 4: We're the ones who developed it, you know, companies like
Speaker 4: you know Borgo Industries and you know Flexico Oil and
Speaker 4: Morris Industries. These are industries that were here for the
Speaker 4: last four decades, you know, developing out these zero minimum
Speaker 4: tillage seating systems. All we've done is add on the
Speaker 4: technology to that, GPS, sensors, you know, decision support systems,
Speaker 4: the big guys, the John Deere's the case ih. I mean,
Speaker 4: these are again large global companies who are ultimately driving it.
Speaker 4: Data is something that is going to be a key
Speaker 4: advantage for us. I don't see, you know, vulnerability. Maybe
Speaker 4: I'm overstating. Yes, there's always vulnerability when you have a
Speaker 4: tech stack, but you know, ultimately we're using so many
Speaker 4: different technologies and we're stacking them together that I think
Speaker 4: that ultimately we have something that is not only unique,
Speaker 4: but it's something that you can only implement a scale.
Speaker 4: You can't digitize one acre farms. It's not cost viable.
Speaker 4: You know, we have single farm families, you know in
Speaker 4: west central Saskatchewan, who's seating three hundred thousand acres of
Speaker 4: farmland this year? Three hundred thousand acres. You know, these
Speaker 4: farm families have you know, two generations, there are four
Speaker 4: generations on the farm and they have full time IT
Speaker 4: departments on their farm. So these are not you know,
Speaker 4: corporate farms in the in the mind. Don't forget. We
Speaker 4: still have foreign ownership guidelines that prevent foreign ownership of
Speaker 4: farmland and Saskatchewan as an example. So these are still
Speaker 4: family farms. They've just scaled to be something that is
Speaker 4: very large and very competitive.
Speaker 2: Rad Al Katib the Lentil King of Saskatchewan.
Speaker 3: The leg you Mary Lentil King Legumary of Saskatchewan with
Speaker 3: his pulse on the pulses.
Speaker 2: That was a fantastic I learned a lot in that conversation.
Speaker 2: Thank you so much for coming on hotlines.
Speaker 4: Thank you.
Speaker 2: That was a lot of fun. There are a lot
Speaker 2: of very interesting strands to pull out from that conversation.
Speaker 2: I do think like the politics of food is definitely
Speaker 2: one of them. And this idea that every government basically
Speaker 2: around the world is trying to balance the distinct demands
Speaker 2: of their local constituency. Food security would which can kind
Speaker 2: of only be ensured by having some sort of local production,
Speaker 2: and then the fact that everyone has to eat.
Speaker 3: Are there any countries or governments out there that don't
Speaker 3: sort of idealize agriculture.
Speaker 2: Yeah, it's a great question. I don't know, Like in Singapore,
Speaker 2: did they I don't know. Yes, there's got to be.
Speaker 3: Something Singapore, I guess some Middle East countries, but even there,
Speaker 3: I know they're doing stuff with like hydroponics. Anyway, a
Speaker 3: couple things that stood out to me. So Murrad's comment
Speaker 3: about trade being a balance, especially in global shipping, I
Speaker 3: think is really important. So even if Canada wasn't directly
Speaker 3: affected by something like US tariffs, there would still be
Speaker 3: that knock on effect from ships being re routed around
Speaker 3: the world. And this is something that we saw in
Speaker 3: the pandemic of course, you know, like ships coming over
Speaker 3: full and then returning empty and that being a pretty
Speaker 3: big problem for a bunch of companies and American consumers.
Speaker 3: So that's one thing, and then the other thing is
Speaker 3: the consolidation aspect. It just seems to me like the
Speaker 3: only I mean, we said it right, the only way
Speaker 3: to survive, especially in a world where trade restrictions are
Speaker 3: becoming more popular, really is scale, and it's going to
Speaker 3: be near impossible, I think for the smaller guys to compete.
Speaker 2: I'm glad you asked that question about the back hal
Speaker 2: because this is one of the things that it's been
Speaker 2: wearring me. It's like, you know, people talk about the
Speaker 2: sort of tariffs and from a sort of strictly fiscal standpoint,
Speaker 2: like this is going to raise the cost of X,
Speaker 2: and so there's going to be less but as we
Speaker 2: recently saw it, like there's another knock on effect. And
Speaker 2: I'm glad you brought that up about the fact that
Speaker 2: the ships just might not be there. Yeah, in place,
Speaker 2: there are certain goods that are intermediate goods in some way,
Speaker 2: and so that's how you get these like ripple out
Speaker 2: disruptions beyond just oh this is lost product for me
Speaker 2: or this is lost income for you. I also liked
Speaker 2: how Amurad like sort of you know, talked about the
Speaker 2: calorie is the original form of energy, which I just
Speaker 2: fine to be really important in this idea that the
Speaker 2: productivity in the ag space is pretty extraordinary, and the
Speaker 2: fact that they're still more yield expected. And then the
Speaker 2: question is do you have the rail capacity, do you
Speaker 2: have the export terminal capacity to actually monetize these agreements
Speaker 2: and increased yield.
Speaker 3: I'm just gonna say, lentils are amazing. They're great, and
Speaker 3: I am really really hungry, and I'm crazy like a
Speaker 3: bunch of.
Speaker 2: Doll Yes, I know, I haven't eaten today, and so
Speaker 2: I've had the exact say thought during the entire conversation.
Speaker 3: So good and good for the soil, good for the soil.
Speaker 3: All right, shall we leave it there?
Speaker 2: Let's leave it there.
Speaker 3: This has been another episode of the Odd Thoughts podcast.
Speaker 3: I'm Tracy Alloway. You can follow me at Tracy Alloway.
Speaker 2: And I'm Joe isn't Thal. You can follow me at
Speaker 2: the Stalwart. Follow our guest He's at marad agt Foods.
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