Advisor and farmer explains the unique difficulties imposed by these tariffs for his clients, explains what advisors can do
Canadian agriculture is staring down the barrel of a trade war. While much has been made about Canada’s energy and manufacturing sectors, farmers are now seeing a potential existential threat to their livelihoods in Trump’s imposition of 25 per cent tariffs on all Canadian exports to the US.
According to Statistics Canada, US-Canadian agricultural trade totals $72.6 billion USD, with Canadian agricultural exports totalling $40.5 billion USD. Data from Farm Credit Canada shows that the prices for key agricultural products like wheat, corn, and soybeans had fallen significantly on Tuesday when tariffs took effect.
Andrew Ehgoetz is seeing the impact on farmers firsthand. The senior financial advisor at Assante Capital Management Ltd. is also part of a farming family and serves a large number of farmers in his practice. He explained how tariffs are impacting his clients, what their primary concerns are, and how he is working to make sure that a hit to US export markets doesn’t derail his clients’ financial plans.
“I think the biggest fear is the unknowns. There is just not a lot of information out there. My wife sits on several agricultural boards and even they’re seeing a lot of unknowns as to how this could unfold,” Ehgoetz says. “Similar to what we’ve seen in the past during COVID or US tariffs on China in 2018, those unknowns cause market uncertainty. What I think we’re seeing right now is just a lot of fear out there on the markets.”
While the price shock is already hitting some farmers, Ehgoetz notes that the weakness we’re now seeing in the Canadian dollar could help offset some of the immediate issues. Most agricultural commodities are priced in USD, so some of the tariff costs will be absorbed by the currency rather than the farmer. Despite that, he sees pain ahead, in part because of the unique financial situation many farmers are in.
Farmers tend to be somewhat asset rich through land ownership, but cash-strapped as they operate businesses with significant costs and seasonal payouts. Ehgoetz adds that farmers are ‘market takers.’ They have almost no control over the price of what they grow and sell and no control over the price of many of their core inputs like fertilizer and energy. In fact, many farmers have recently experienced a different tariff shock when Canada imposed tariffs on Russian potash following the outbreak of war in Ukraine.
The response he advocates for is trying to lock in prices where possible. Ehgoetz and his wife, for example, have already sold some of their 2025 and 2026 crops on agricultural futures markets, selling that future crop when prices were higher. He notes that there can even be times when options strategies can be used to protect price contracts and offset some of these pricing shocks.
Beyond helping with those business decisions, Ehgoetz is offering key counsel as a financial advisor. He uses plans as a touchstone with clients and can highlight what they’ve already found as viable sources of liquidity in the event of a prolonged economic or market downturn. He highlights areas of cost that they can try to manage and works on small tweaks and portfolio rebalances that can keep clients on track. Amidst a macro-induced crisis, he tries to keep his clients focused on what they can control.
Much of that work involves managing emotions. Ehgoetz says that in the stream of calls and messages he’s received since the tariff threat first manifested, he’s been working to ensure his clients don’t make irrational decisions. Some of that work involves encouraging people to turn off the news and avoid the sense of panic that headlines can induce.
Some of it also involves widening the time horizon that clients are looking at. Ehgoetz highlights the fact that we’re coming off some strong years on equity and agricultural markets and that his clients have done well as a result. He shows them how he’s used the wins from those fat years to help protect them in a period of volatility like this one.
Ehgoetz notes that farming can be a lonely business. Many of his clients don’t have a host of colleagues at the office or in a factory who they can talk with about the news every day. He tries to be that sounding board for his clients, offering them context and points of reflection that can keep more irrational worries at bay. He’ll highlight big-picture macro stories, noting that these tariffs should likely result in further interest rate cuts by the Bank of Canada. He’ll also show them where in their portfolios they can find liquidity should they ever really need it.
As other advisors talk with clients directly impacted by these tariffs Ehgoetz’s message is one of calmness and stability amidst a sea of worry.
“There’s a lot of worry and a lot of noise, but this is today’s noise,” Ehgoetz says. “There’s always something every year, and we will get past this. So avoiding rash decisions and being that calming voice for clients to show them that better days are ahead can help them navigate all the information they’re getting now.”
