Overview of the Canadian agriculture and agri-food sector 2018

From farm to plate

Large in scope, the agriculture and agri-food system is an integrated supply chain making a significant contribution to the Canadian economy.

Key players in this system:

producers (primary agriculture)
input and service suppliers
food and beverage processors
food retailers and wholesalers
food service providers
Agriculture and Agri-Food Canada

Description of this image follows. — Overview of the Canadian agriculture and agri-food sector

AAFC works within this system to support several key components — primary agriculture, food and beverage processing, and the growing field of bioproducts — through our programs and services.

The department also maintains relationships with suppliers, retailers and others in the value chain. Related industries contribute to the sector as well, such as agricultural technology and equipment).

Putting agriculture on the map

While all major farm types (such as grain, dairy, horticulture) are present across the country, the mix of farm types varies considerably across regions.

Economic driver here at home

The Canadian agriculture and agri-food system is a key driver of Canada's economy.

In 2018, the system generated $143 billion, accounted for 7.4% of GDP, and provided one in eight jobs in Canada.

The agriculture sector is healthy and profitable, experiencing strong growth in the past decade. Farm market receipts grew by 4.2% annually, on average, between 2009 and 2018, with the largest growth coming from grains and oilseeds.

Net Cash Income reached a record high of $14.7 billion in 2017 but decreased in 2018 to $11.6 billion.

In 2016, the average farm family had an estimated income of $127,172, compared to $108,600 for the average Canadian family.

Agriculture and agri-food system's contribution to Canadian GDP, 2018
	(% of total GDP)
Input and service suppliers	0.7
Primary agriculture	1.7
Food and beverage processing	1.8
Food retail and wholesale	1.6
Foodservice	1.6
Total	7.4
Notes: 1. Data is preliminary and subject to revisions. 2. Components may not add up due to rounding. Source: Statistics Canada and AAFC calculations.

Food and beverage processing – Number one in Canada

Largest manufacturing sector in Canada in terms of both GDP and employment -- with plants across the country.

The number 1 market for Canadian primary agriculture products, using 42% of primary production.

**Distribution of food and beverage processing shipments by sub-industry, 2018**
	(%)
Meat	25.4
Dairy	12.8
Beverage	10.0
Grains and oilseeds	9.6
Bakeries and tortilla	9.5
Animal food	7.0
Fruit and vegetable[1]	6.8
Seafood	4.5
Sugar and confectionary	3.2
Other food[2]	11.1
Source: Statistics Canada and AAFC calculations. Notes: Data are preliminary and subject to revisions. [1] Fruit and vegetable preserving and specialty food manufacturing. [2] Includes snack food, coffee and tea, flavoured syrup and concentrates, seasoning and dressings, and all other food manufacturing.

Charting a path to continued growth in food and beverage processing

Domestic and international food and beverage processing sales have increased steadily over the past 10 years.

However, processing is viewed as an area of untapped potential because of underinvestment.

Processors experience labour productivity challenges and lower profit margins compared to the overall manufacturing sector.

Other major agri-food exporting countries have been more successful in developing their value-added industries.

Canadian food and beverage processing sales and exports, 2009 to 2018
	Total sales (billion dollars)	Exports (billion dollars)	Domestic sales (billion dollars)
2009	90.11249	18.97797	71.13452
2010	91.60969	20.42079	71.1889
2011	93.95511	22.99743	70.95768
2012	94.57115	24.21764	70.35351
2013	96.63287	24.93002	71.70286
2014	100.243	27.45195	72.79104
2015	102.7402	30.70539	72.03482
2016	107.2171	32.89021	74.32685
2017	111.5798	34.44788	77.13188
2018	114.9245	35.80791	79.1166
Average growth (%)	2.7	7.3	1.2
Source: Statistics Canada and AAFC calculations.

A global force – strong and growing

The performance of the sector depends on its ability to compete in international markets. We're the fifth-largest exporter and importer of agriculture and agri-food products in the world.

The U.S. remains our largest trading partner, accounting for over half of our agricultural imports and exports.

Over the past 10 years, our exports to China have grown by 16% annually.

Canadian agriculture and agri-food exports 2009 and 2018
	2009 ($)	2018 ($)
Other	8,848,193,123	10,057,712,332
EU	2,055,234,703	2,635,479,754
Mexico	1,206,648,094	1,913,903,713
Japan	2,937,356,649	4,285,125,217
China	2,494,389,203	9,379,350,568
U.S.	17,633,457,214	31,089,572,016
Total	35,175,278,986	59,361,143,600
Source: Statistics Canada and AAFC calculations

Agriculture and agri-food exports of the top five global exporters, 2009 and 2018
	2009 (in Can $)	2018 (in Can $)
EU-28	485,199,542,945	760,776,536,774
U.S.	113,295,378,928	185,237,729,540
Brazil	61,953,419,837	109,489,599,266
China	32,588,402,740	74,575,756,670
Canada	35,176,793,657	59,378,238,687
World Total	1,047,396,192,596	1,821,427,088,394
Source: Global Trade Tracker and AAFC calculations.

In 2018:

72% of our agricultural exports were destined for countries where Canada has a free trade agreement
our export sales grew by 2.7% over the previous year to reach $59.4 billion

Global demand drives a decade of strong growth

Most Canadian producers have seen good growth over the past decade, with farm market receipts reaching a record high of $60 billion in 2018.

Farm market receipts (billion $), 2018
Other	4.8
Special crops	2
Poultry and eggs	4.3
Fruits and vegetables	5.7
Dairy	6.6
Red meat	13.4
Grains and oilseeds	23.2
Notes: [1] “Special Crops” denotes dry peas, dry beans, lentils, chickpeas, mustard seed, canary seed and sunflower seeds. [2] Numbers may not add to total due to rounding. Source: Statistics Canada.

Net cash income, Canada and U.S., 2009 to 2018
	Can$ billion	US$ billion
2009	8.48	74.41
2010	9.00	96.34
2011	11.33	123.22
2012	12.36	135.28
2013	12.54	136.09
2014	13.78	131.30
2015	14.34	106.78
2016	14.56	95.57
2017	14.65	102.52
2018	11.61	104.99
Source: Statistics Canada, USDA Economic Research Service.

Net cash income for producers reached a new record high in 2017, but fell in 2018. Even with this decline, the average net worth of farms continued to increase in 2018.

The long-term outlook for agriculture remains favourable.

The new realities of farming

Canadian agriculture has evolved over time in response to challenges, opportunities and market developments.

Over the past 50 years, the number of farms in Canada has decreased by half, average farm size has doubled, and farm value per acre has almost quadrupled.

Today's farm can produce roughly twice as much output as 50 years ago, with the same amount of total input.

Consolidation has led to a small number of very large farms earning the majority of revenues, with the largest 8% of farms accounting for over half of farm cash receipts.

Distribution of farms and gross farm receipts, Canada, 2016
	% of farms	% of revenues
Under $100,000	56	5
$100,000 to $249,999	16	7
$250,000 to $499,999	11	11
$500,000 to $999,999	9	17
$1,000,000 and over	8	60
Source: Statistics Canada, Census of Agriculture, 2016, AAFC custom tables.

Attracting the next generation of farmers

A quarter of farm operators are 65 and over, a steady increase in age over the past 25 years.

In 2016, only 7% of farms were operated by women only, and 33% by both men and women.

The proportion of new Canadians operating farms has decreased to 8.7% in 2016.

Over the past 20 years, operators who self-identified as Indigenous increased only slightly to 1.9%.

Number of farm operators by age group, Canada, 1991 to 2016
	Under 35 years (%)	35 to 64 years (%)	65 years and over (%)
1991	13	67	20
1996	14	70	16
2001	15	73	12
2006	18	73	9
2011	22	70	8
2016	24	67	9
Source: Statistics Canada, 2016 Census of Agriculture, AAFC calculations.

Agriculture's environmental footprint

Agriculture greenhouse gas (GHG) emissions (8.4% of Canada's total emissions) have been relatively stable for 20 years.

In that time, production has increased significantly, resulting in a decrease of GHG emission intensity by half.

In addition, soil conservation practices have allowed our agricultural soils to sequester carbon for 20 years, offsetting nearly 10% of the sector's emissions.

The agricultural sector also has environmental impacts in other areas including water, soil quality and biodiversity.

Agriculture GHG Emission Trends (million tonnes)

Net emissions = total emissions minus Carbon sequestered in soils (Soil Carbon) - 1990-2003
	1990	1991	1992	1993	1994	1995	1996	1997	1998	1999	2000	2001	2002	2003
Animal production	32	32	34	34	36	38	38	38	39	39	40	41	41	42
Crop production	15	14	14	15	16	16	17	17	17	17	17	15	15	16
On farm fuel use	11	11	11	12	13	14	14	15	14	13	13	11	11	12
Soil carbon	8.3	7.1	5.6	4.4	3	1.5	0.6	−0.9	−2.1	−3.3	−4.7	−5.9	−7.3	−8.6
Total emissions	58	57	59	61	65	68	69	70	70	69	70	67	67	70
Net emissions	66.3	64.1	64.6	65.4	68	69.5	69.6	69.1	67.9	65.7	65.3	61.1	59.7	61.4

Net emissions = total emissions minus Carbon sequestered in soils (Soil Carbon) - 2004-2017
	2004	2005	2006	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017
Animal production	43	44	43	41	40	38	37	36	36	36	36	35	36	36
Crop production	17	16	16	17	18	18	18	19	21	23	22	23	23	24
On farm fuel use	12	12	12	12	12	12	13	14	13	13	13	13	13	12
Soil carbon	−9.8	−11	−12	−12	−12	−12	−12	−12	−11	−10	−9.5	−8.6	−7.8	−6.8
Total emissions	72	72	71	70	70	68	68	69	70	72	71	71	72	72
Net emissions	62.2	61	59	58	58	56	56	57	59	62	61.5	62.4	64.2	65.2

Labour is a key factor affecting the sector's growth

The majority of jobs are considered low-skilled and pay lower wages than in other sectors.

The national agriculture job vacancy rate is 7% and continues to grow: for example, meat packers have a 12% vacancy rate —7,300 positions.

Opportunity for tech to shift skillsets in the sector

Agri-food processing is becoming more automated and farm management is increasingly connected, integrating data and new technologies into operations.

Artificial intelligence provides better decision-making models to improve efficiency, productivity and sustainability.

As the emphasis shifts away from manual labour and machine operation, there may be displacement of agricultural workers.

However, there will be a continued need for low and intermediate skilled labour in the sector for the foreseeable future.

Share of high skill position for employees 2018
	Primary agriculture	Food and beverage processing	Total, all industries
Share of high skill position (%)	17	33	60
Other (%)	83	67	40
Source: Labor Force Survey, Statistics Canada Note: High skill positions include Skill level A (Management and Professional) and Skill level B (technical), “Other” includes Skill level C (Intermediate positions) and D (Elementary positions).

Promise and potential

Agriculture is one of the sectors with the highest economic growth potential in Canada.

Demand is growing for the kinds of food that Canadian farmers and processors can deliver – meats, grains, oilseeds, fruits, vegetables and processed foods.

Canada has some key advantages that will make us a leader in sustainable food production:

abundant land and water resources
access to international markets
strong R&D capacity
strong global reputation as a trusted supplier of safe, top-quality food

Together, these advantages create a powerful brand for Canadian food.

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