As one of the world’s largest food producers, Canada is a major player on the global agri-food stage. Since 2011, Canada has ranked as the world’s fifth-largest exporter of agricultural commodities and the 11th largest provider of agri-food globally, supplying the world with a diverse array of products, including soy, wheat, pulses, manufactured food products and live animals and animal products. 

Overall, Canadian exports continue to grow. In 2017, our agri-food exports totalled $63.9 billion. And while EDC forecast a 0.5% dip in 2018, it expects 3.8% growth in the agri-food sector in 2019. 

For all of Canada’s many successes in this sector, there’s still tremendous room for growth. In its 2017 report, Unleashing the Potential of Key Sectors, the Advisory Council on Economic Growth suggests that Canada has the potential to move from fifth to second place in terms of agricultural commodities, and from 11th to fifth place for agri-food. 

Overcoming barriers to growth

While the agri-food sector appears poised for growth, there are a host of challenges exporters need to overcome to grow their sales in new markets around the globe. For example, many agri-food exporters have their sights firmly focused on our neighbour to the south, even though most are aware of the lucrative opportunities to be found in other markets. The numbers back this up: the U.S currently accounts for 54% of all Canadian exports in the agri-food sector. 

In a recent survey commissioned by Agriculture and Agri-Food Canada (AAFC), nearly 80% of Canadian exporters surveyed said they were completely or greatly reliant on the U.S. for exports. Respondents cited multiple reasons preventing them from selling to new markets, including uncompetitive pricing, logistical issues, regulatory barriers and lack of experience. 

Growing global trade disruptions and volatility present another major challenge for Canadian agri-food exporters. In its latest Trade Rankings Report on Agriculture, Farm Credit Canada (FCC) cites growing trade tensions between China and the United States as the defining force in agricultural markets in 2018. Canadian exporters have already felt the impact of these tensions. To cite just one example, China’s tariff on U.S. soybeans in June 2018 hit U.S. producers hard, but also dramatically lowered the price Canadian soybean producers received for their product. 

New opportunities abound

While these challenges can’t be ignored, the outlook for Canadian agri-food exporters is bright, with many exciting new opportunities on the horizon, including edible offal, fresh beef, pork, chocolate and bread. Take the flourishing organic food market, for example. According to a new Economic Insights report, this market offers Canadian exporters substantial opportunities for growth. 

In 2017, Canada’s organic food exports totalled $607 million. And while this represents just 1% of total exports in the agri-food sector, organic exports are highly diversified, with producers selling their products to more than 60 different markets. As the EDC report makes clear, global demand for organic food products is rising, as people become more health-conscious, incomes rise, producers scale up and retail distribution expands.

Canada’s participation in major international trade agreements has paved the way for increased sales to new markets, particularly in Asia and Europe. With the ratification of the Comprehensive Economic and Trade Agreement (CETA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Canadian exporters now have a huge advantage over their competitors from countries that aren’t part of these agreements. With these agreements in place, many barriers have been lifted for Canadian exporters. CETA, for example, eliminates EU tariffs on 94% of Canada’s agri-food products.

Innovation driving growth and efficiency

Innovation is another key factor that will drive growth in the agri-food sector. Canadian agri-food companies continue to push the boundaries with exciting new food products that are in high demand in global markets. What’s more, advances in technology and innovative new processes are increasing efficiency, enhancing quality, and reducing costs.  

P&P Optica (PPO), for example, is an Ontario-based firm that uses imaging and machine-learning to assess food composition and quality, as well as detect contamination by foreign objects. Innovative solutions, like these, enhance Canada’s already stellar reputation for food quality and safety with buyers in foreign markets.