Canadian agriculture is a trading powerhouse

  • Nov 28, 2016

 In 2015, Canada was the world’s fifth largest exporter of agriculture commodities PDF (1.7MB), a status we’ve held for years. Being a leader in world markets gives Canada bragging rights, which is nice. But that leadership is also important to the long-term health of the industry.

Being a big-time trader gives us a competitive boost when disruptions occur in global trade (for instance, when trade disputes arise or when one supplier’s commodities become relatively more expensive for countries to import). This happened last year when U.S. wheat exports declined and Canada was able to pick up the slack.

Canada’s competitive advantages

  • Canada can fill gaps in supply because we have a diversity of commodities available and the well-developed infrastructure to store and deliver it.
  • Canada’s agriculture exporters benefit from well-developed trade relations with some of the world’s largest importers (e.g., the U.S., China and Japan).
  • Our political and economic stability and the quality of our commodities and products can all boost our trade with new/emerging trade partners.

Canadian reliance on the U.S.

All of those things matter, but our ranking as the world’s fifth largest exporter is in large part due to our proximity to the U.S., the world’s largest single-country market, and the integration of the two economies.

Diversifying Canada’s exports will mitigate the risk of disruptions in global markets, and to take advantage of possible trade opportunities in non-traditional markets. China is a good example of a growing market, and individual European countries may provide another growing opportunity as the new political landscape unfolds.

Growing demand for food important for Canada

World economic growth has slowed, as has export growth of many commodities. However, while the shape and sources of new demand may shift in the new economic climate, export leadership will become increasingly concentrated. The OECD projects that the top five exporters of each agriculture commodity will account for at least 70% of total exports in 2025. Canada should be one of those top five for a number of commodities.

For more on Canadian agriculture trade, check out FCC Ag Economics’ annual report on trade, Canadian Agriculture’s Productivity and Trade.