By Tim Kalinowski
While Alberta’s agricultural trade with Saudi Arabia is relatively small, for those companies affected by the current breakdown of diplomatic relations between Canada and the Middle Eastern kingdom it is a major blow to their prospects and bottom lines.
“Saudi Arabia is certainly an export destination for Alberta’s wheat and barley, and the loss of access to this market represents a loss in diversity for Alberta’s export opportunities,” says Michael McKinnon, a spokesperson for Deron Bilous, Alberta’s Minister of Economic Development and Trade. “However, Saudi Arabia’s ban on Canadian goods is expected to have a minimal impact on Alberta’s agri-food producers.”
While that may be true for the broader Alberta agriculture industry, it is definitely not true for Green Prairie International, a Lethbridge County based company which sends forage exports to Saudi Arabia. Company spokesperson Jordan Van Hierdan says this dispute couldn’t come at a worse time for his company, which has been building up to make a major push into the lucrative Saudi forage and feed market for years.
“We are set up to do business there, and we have known that market has been coming for years. But as of right now, it’s just not going happen. And that is very upsetting.”
Saudi Arabia has some of the biggest dairy farms in the world, explains Van Hierdan, and the Saudi government has said it can no longer sustain its homegrown forage industry to feed those cattle due to severe water shortages. The Saudis have singled they will be seeking a massive and steady supply of import forages to make up for the deficit once they turn off their own internal irrigation systems for those forages, likely sometime in the next six months.
“If you can get in and supply a good, consistent product to these markets then your in,” says Van Hierdan. “But if you are late to the party, you are late to the party, and you have missed out.”
Van Hierdan places blame for the current situation squarely on the Trudeau government’s shoulders.
“There is that saying: Loose lips sink ships,” he says. “When you are dealing with the Saudi Arabians, you just can’t call them out over Twitter. We are engaging in democracy over Twitter … It doesn’t work. And, of course, nobody is standing behind us (in the world) because it is stupid.”
McKinnon, on the other hand, says while individual companies like Green Prairie International may be affected strongly in the current dispute it won’t put much of a dent in Alberta agriculture overall.
Saudi Arabia was Alberta’s 27th largest export market in 2017 at $112 million, with 38 per cent being agricultural products, he explains. Between 2013 and 2017, Alberta’s agricultural exports to Saudi Arabia have averaged CAD $95.37 million per year, including cereals, machinery, plastics, precision instruments, and electrical machinery.
In 2015 Alberta agri-food exports to Saudi Arabia totalled $46 million. Top products included wheat (CAD $44 million) and processed potatoes (CAD $1.6 million). But last year Alberta’s agri-food exports were quite small, he says—only $17 million in 2017, almost entirely barley.
So these relatively small losses are more than made up for by Alberta’s record high agricultural exports the past few years, says McKinnon.
“Last year we reached a record of $11.2 billion in agriculture exports, a 12 per cent increase,” states McKinnon. “Alberta leads multiple trade missions each year to expand access to international markets across a number of sectors. These missions, along with advancements in trade agreements like the Comprehensive and Progressive Trans Pacific Partnership (CPTPP) and the Canada-EU Comprehensive Economic and Trade Agreement (CETA), have opened up significant opportunities for Alberta companies.
“We can’t speculate on the outcome of the issue with Saudi Arabia,” he states, “but we are working closely with the federal government as they determine next steps. We are also working with Alberta businesses and producers to assess the impact of the ban. We continue to support Alberta farmers and agri-food businesses in exporting to new markets through the $406 million Alberta contribution to the Canadian Agricultural Partnership program suite.”
All that is small consolation, to his company’s employees to his company’s employees, says Green Prairie’s Van Hierdan, all of whom have pinned their future hopes on opening up the Saudi Arabian market to Green Prairie’s forage products.
“It is what we have been building up towards,” he says. “We always knew this market was going to come— it was only a matter of when. The when is this year that they are shutting off their irrigation, and going forward there is going to be a huge demand for forages … We just lose out on it, right? It’s not good for anybody … We have 80-90 people working for us, and there is so much lost opportunity.”