Understanding agriculture and food trade: An overview

Canada is a trading nation, especially in agriculture and food, where we grow and produce more than we can consume domestically.

More than 50% of Canadian agricultural production is exported directly or processed to be exported. Some commodities such as red meat, cereal grains and pulse crops are very trade dependent. While others, particularly in the supply-managed industries of dairy and poultry, serve the domestic market predominately.

Why Canada stands out as an agriculture and food exporter

Our dominant export position is due to our competitiveness and ability to sell high-quality products at an attractive price to foreign buyers. Our endowment in natural resources (water and land) and overall productivity are key drivers of export performance and success.

For example, we can increase export volumes using more production factors (planting more acres, hiring more labour, changing feed rations, etc.). And each option means we can warrant higher expenditures if this output value grows faster than costs. Increasing productivity raises our ability to find success in export markets.

Other variables that businesses sometimes have very little control over also influence success. One example is currency values. Depreciation in Canadian dollar values makes our products more competitive for foreign buyers.

Logistics matter

Generally, ocean bulk freight is less expensive than containerized ocean movement, and both are far more economical than rail freight. However, for medium to long– inland transport, rail is more economical than trucking.

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