Commodities a focus for Canada’s agriculture exports

by SUSAN MANN

Wheat still tops the list of Canada’s 10 main agricultural exports but some new products like lentils, peas, soybeans and canola oil have now made the line up, according to Farm Credit Canada.

FCC noted the shift in what’s being exported in the fall edition of its publication called Knowledge Insider. The entire edition focused on changes in international trade and the globalization of markets. It updates a 2008 report on globalization in the same publication.

Some products, such as fresh pork, boneless beef, food preparations and communion wafers, have disappeared from the list comparing Canada’s top 10 agricultural exports in 2006 to three years later in 2009. Products that made both lists include frozen pork, live cattle, frozen potatoes and canola seed, along with wheat.

Jean-Philippe Gervais, FCC senior agricultural economist, says one of the big ideas that emerged from the corporation’s 2008 report is Canada would export more processed foods in the future. But the new report shows that is not the case: “We still export a lot of commodities.”

Gervais says the boom in commodity prices in 2007/08 made it difficult for Canadian exporters to add value to raw commodities.

The report also talks about how international business is affecting businesses in Canada by opening up different markets. “Globalization is bringing opportunities that didn’t exist for producers a few years back,” he says, noting economic growth in countries such as Brazil, India and China fuels their food demand.

Gervais says Canadian exporters are diversifying away from the United States and into the emerging markets.
 
Jacques Pomerleau, president of Canada Pork International, says one change they’ve noticed in world trade is increasing demand and higher prices for meat products.

Twenty years ago when Canada Pork International was formed, 75 per cent of pork exports went to the United States but now that has dropped to less than 30 per cent, he says. Canada Pork, the export development agency of the Canadian pork industry, has worked over the years to build new markets in Asia, Russia, Australia, Mexico and “all over the world.”

In an Oct. 24 federal government trade report, Agriculture Minister Gerry Ritz and International Trade Minister Ed Fast outlined the government’s efforts to create new opportunities to benefit farmers. The report highlighted the market access gains achieved from January 2010 to March 2011.

For example, Canadian beef exports to Russia more than tripled by value after increased beef access was gained in 2009 and confirmed in 2010. They were $23.8 million in 2010.

Jim Laws, executive director of the Canadian Meat Council, says they’re pleased the government has identified priority areas and those areas are important to industry too. But they really hope the government “will re-engage with Korea,” he says. Canada’s major competitors are currently signing free trade agreements with South Korea and Canada stands to lose its position in that market.

Canada is a major provider of pork to South Korea but exporters must pay a duty of about 25 per cent. “When the Americans start getting a tariff reduction, we just simply won’t be able to compete,” Laws notes.

Larry Martin, senior research fellow with the George Morris Centre, says the Canadian government is going in the right direction in creating new world market opportunities for farmers by working on the technical barriers to trade.

But Canada hasn’t had much success working out both bilateral and multilateral trade agreements. “We’ve really got to come to grips with this so-called balanced position,” he says, referring to the federal report’s discussion of the needs of industries wanting to export and that of supply management. “Countries aren’t doing negotiations with us because of the balanced position.” BF