Canada Should Target a $12 Billion Food Export Shift

Report urges expansion beyond US markets for growth

Canada has a major opportunity to diversify $12 billion worth of food and beverage exports to protect against trade disruptions and build a stronger agriculture system. A new report from Farm Credit Canada (FCC), titled The $12-billion trade shift: Canada’s opportunity to diversify food exports beyond the U.S., outlines the plan. 

The report warns that Canada’s food and beverage sector is too dependent on the United States. In 2023, more than three-quarters of these exports went to the U.S., compared with 31 percent of primary agricultural products. Imports show a similar pattern, with 65 percent of food and beverage products coming from the U.S. This heavy reliance leaves Canadian farmers and food processors vulnerable to sudden trade changes. 

“Canadian agriculture and food producers rely on international trade to thrive, but ongoing trade disruptions have created uncertainty and barriers to growth. 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 Justine Hendricks, FCC president and CEO. “This report is FCC’s effort to focus Canadian dialogue on how diversification is important, viable and an opportunity we can’t miss out on.”  

FCC recommends a three-part strategy to redirect $12 billion in exports. First, it calls for strengthening inter-provincial trade to replace $2.6 billion in U.S. exports with Canadian demand, reducing import dependence and supporting local producers.  

Second, Canada should maximize its 15 free trade agreements, which cover 51 countries and 66 percent of global GDP, to reach more buyers.  

Third, the report urges forging new trade partnerships in Europe, Asia, and Latin America to capture $9.4 billion in high-value market growth. 

Prepared foods, vegetable oils, and animal feed offer the largest diversification opportunities. Prepared foods alone represent 19 percent of Canada’s food and beverage exports, with 90 percent currently going to the U.S. The report notes that stronger domestic markets could absorb about 10 percent of these exports, while the rest can target fast-growing markets in Asia and Europe. 

“Investing in infrastructure, innovation and expanding product offerings will be critical to supporting this transition. Shifting $12 billion in exports will reduce risk and secure stability for the Canadian agriculture and food sector,” said J.P. Gervais, FCC’s chief economist. “A balanced trade portfolio will make the ag and food industry more competitive, adaptable and prepared to succeed in a changing global economy.” 

FCC leaders stress that investing in infrastructure, innovation, and value-added processing will help Canadian producers compete globally. Expanding “Buy Canadian” efforts and highlighting Canada’s strong food brand will further boost growth. A balanced trade portfolio, they say, will make Canadian agriculture more resilient and ready for a changing global economy. 

Photo Credit: Justine-Hendricks-FCC