Canada Has Opportunity to Diversify Food Exports Away from US: FCC

Canada has a $12-billion opportunity to reduce its reliance on the United States for food and beverage exports, according to a new Farm Credit Canada (FCC) report.  

The report, The $12-billion trade shift: Canada’s opportunity to diversify food exports beyond the U.S., argues that spreading trade across more markets will strengthen resilience, boost competitiveness and build a more secure agriculture and food system. 

Canada’s food and beverage sector is heavily reliant on the U.S. as over three-quarters of its exports were destined to the southern neighbour, compared with 31% of primary agricultural products in 2023, said an FCC release on Monday. In terms of imports, 65% of food and beverage products came from the US, compared to 78% for primary agriculture. This reliance leaves Canadian ag and food producers “vulnerable to unpredictable trade dynamics,” the federal ag lender said.   

“Canadian agriculture and food producers rely on international trade to thrive, but ongoing trade disruptions have created uncertainty and barriers to growth,” said Justine Hendricks, FCC president and CEO. “Diversifying beyond the US will not only strengthen producers’ resilience but also benefit Canadian consumers and the broader economy.” 

FCC’s proposed diversification strategy targets three key areas. First, it calls for strengthening inter-provincial trade by redirecting $2.6 billion in exports from the US to Canadian consumers, reducing import reliance and stabilizing the domestic food system. Second, the report emphasizes maximizing Canada’s 15 existing free trade agreements, which cover 51 countries representing 66% of global GDP. Third, it recommends forging new international partnerships to tap into high-value markets in Europe, Asia and Latin America, capturing an estimated $9.4 billion in additional exports. 

Prepared foods stand out as the single biggest opportunity. This category, worth $8.6 billion in 2023, currently sends 90% of exports south of the border. FCC suggests that roughly 10% could be consumed domestically, while the rest could find new homes in Europe and Asia. Other promising areas include vegetable oils, animal feed and alternative proteins. 

The report also highlights the importance of promoting the “Buy Canadian” movement, expanding domestic value-added processing and enhancing Canada’s global brand. By capitalizing on these opportunities, FCC argues, Canada can reduce risk, capture more value and secure long-term stability for its agriculture and food industries.