Canada could diversify $12 billion in farm and food exports away from U.S. says FCC

Canada could move $12 billion worth of food and beverage exports to non-U.S. markets, according to a new report from Farm Credit Canada.

“Diversifying food and beverage exports beyond the U.S. will not only strengthen producers’ resilience but also benefit Canadian consumers and the broader economy,” said FCC president Justine Hendricks in a Monday news release.

Why it matters: Reliance on exports to the U.S. market leaves farmers and food producers exposed to unpredictable trade dynamics.

Canada’s overreliance on exports to the U.S. have been a key focus in the face of that country’s tariffs on Canadian goods and soured relationship with our closest neighbour.

More than three quarters of Canadian exports went to the U.S. in 2023, FCC said in the release. Sixty-five per cent of food and beverage imports came from the U.S., as did 78 per cent of primary agricultural imports.

“This reliance leaves Canadian ag and food producers vulnerable to unpredictable trade dynamics,” the ag lender said in the news release. “The U.S. economy will always remain a key market for Canadian exports, but the evolving trade landscape underscores the need to diversify.”

FCC recommended a $12-billion diversification strategy focused on three areas:

• Strengthening interprovincial trade to redirect $2.6 billion in exports from the U.S. to meet domestic need
• Maximizing benefits from Canada’s existing trade agreements, which cover 51 countries
• Forging new partnerships to capture emerging high-value markets in Europe, Asia and Latin America

According to FCC’s analysis, there are opportunities to diversify in categories like prepared foods, vegetable oils and animal feed. Prepared foods present the largest opportunity as they make up 19 per cent of Canadian food and beverage exports.

“Investing in infrastructure, innovation and expanding product offerings will be critical to supporting this transition,” said FCC chief economist J.P. Gervais.

The report also highlighted strategies like promoting the “Buy Canadian” movement, enhancing Canada’s global brand, expanding domestic value-added processing, and exploring a variety of protein sources and sustainably-processed items.