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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:

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Agriculture and agri-food is a major contributor to the Canadian economy

Primary agriculture

An economic driver highly diversified across the country

  • 193,492 farms
  • farms cover 64.2 million hectares or 7% of Canada's land area
  • concentrated across the Prairies and Southern Ontario
  • average farm size doubled over the last 50 years due to increased consolidation and technological advances

Farm market receipts ($ billions)

A record high $60 billion

  • 4.2% average annual growth – grain and oilseed receipts leading the way
  • largest 8% of farms accounted for over half of farm cash receipts

AAFC is mandated to support primary agriculture and food and beverage processing, but the sector reaches into the broader agri-food system

Input and service suppliers serve primary agriculture.

Primary agriculture (GDP, $32.3 billion, 1.7%, employment 265,700) serves food and beverage processing (GDP, $33.9 billion, 1.8%, employment 298,200) and Food Retail and Wholesale

Primary agriculture and food and beverage processing also serve foodservice

In 2018, the whole agriculture and agri-food system employed

  • 2.3 million people
  • accounted for 7.4% of Canada's GDP
  • provided 1 in 8 jobs in Canada

Food and beverage processing

Largest manufacturing industry in Canada

  • 17% of all manufacturing GDP
  • 18% of manufacturing employment

Facilities across the country but most in Ontario and Quebec

Food and beverage processing sales totalled $114.9 billion in 2018

Main industries:

  • meat, 25%;
  • dairy, 13%;
  • beverage, 10%;
  • grain and oilseed milling, 10%
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Input and service suppliers serve primary agriculture.

Primary agriculture (GDP, $32.3 billion, 1.7%, employment 265,700) serves food and beverage processing (GDP, $33.9 billion, 1.8%, employment 298,200)

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.

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  • Yukon
    • hay
    • poultry
  • Northwest Territories
    • eggs
    • greenhouse products
  • Nunavut
    • caribou
    • wild berries
  • British Columbia
    • horticulture
    • dairy
    • poultry
    • eggs
  • Alberta
    • cattle
    • grains
    • oilseeds
  • Saskatchewan
    • grains
    • oilseeds
    • cattle
  • Manitoba
    • grains
    • oilseeds
    • hogs
  • Ontario
    • grains
    • oilseeds
    • horticulture
    • dairy
  • Quebec
    • hogs
    • dairy
    • poultry
    • eggs
  • Atlantic Provinces (New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador)
    • horticulture
    • dairy

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.

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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.

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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.

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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.

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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
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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:

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.

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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.

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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.

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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%.

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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)

Agriculture GHG Emission Trends (million tonnes)
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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.

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Primary agriculture employs 277,200 people. Sector employment declined by 16% between 2008 and 2018.

Food and beverage manufacturing employs 298,200 people. Sector employment increased by 1.46% between 2008 and 2018.

Source: Statistics Canada, Labour Force Survey, 2008 and 2018

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.

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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:

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

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