Outline of opportunities in the United States
An overview of Canada’s largest trading partner
The United States is Canada’s largest trading partner, and is the strongest economy in the world with C$23.79 trillion or 25% of the world’s gross domestic product (GDP). The United States and Canada enjoy the largest bilateral trading relationship in the world. Bilateral trade creates jobs and economic opportunities in both the United States and Canada. The two countries share approximately C$47 billion worth of agricultural trade annually, building on our proficiencies and creating a more competitive and integrated agri-food sector.
The United States is now a net importer of agri-food and seafood products. In 2016, the U.S. agri-food and seafood trade deficit was C$11.1 billion with imports valued at C$194.6 billion, and C$183.4 billion in exports. The U.S. imported a wide variety of agri-food and seafood products with their top imports being beverages, meats, and edible fruit and nuts. The top three supplying countries are Canada, Mexico and China. Canada is ranked first among the 206 supplying countries to the U.S. and has seen little fluctuation in market share over the last few years.
Major sector opportunities in the U.S.
Discover more information, strengths, opportunities and considerations for Canadian agri-food and seafood. Read our United States agri-food market intelligence!
Are you interested in learning about how we select priority sectors?
Sectors were prioritized using a quantitative modeling approach. Using the Global Trade Tracker database, The top 100 products prioritized represented, in 2016, 27% of the U.S. total imports from the world (excluding the products that Canada does not have the capacity to produce), and 71% of Canada’s exports to the U.S.
In phase one of the modelling approach, all agri-food and seafood products went through a quantitative assessment, where each product was evaluated based on a series of quantitative criteria (i.e. size of market, market growth, Canada’s trade intensity, and tariff reductions), all of which were ranked over ten years of historical trade data.
Our analysis focused on assessing opportunities from a strengths and challenges perspective:
- Strengths were defined by high performance in large U.S. import sectors, and high growth. Other sectors of interest were those involving free trade agreements such as the North American Free-Trade Agreement (NAFTA), which is considered as one of the largest in the world.
- Challenges were defined by the issues that industry might face while trying to take advantage of market opportunities.
All priority agri-food and seafood products are both imported by the U.S. and within Canada’s capacity to produce and supply internationally.
Growth through processing
While the U.S. is an important market for commodity exports, it is one of the few markets in the world where Canada can grow exports of processed food products, given its wealth and relatively stable economy. As of 2016, Canada supplied C$23.4 billion in processed foods to the U.S., a figure that has been growing steadily since 2012. High performing products include bakery products, canola seeds, beef, and frozen French fries.
Processed food exports provide an income multiplier; exporters can compete in a growth environment, which is less sensitive to market share and price point. Margins tend to be higher for processed food products. Exporting these products also tends to be less volatile than commodities would be.
Processed foods currently represent 69% of all Canadian agri-food and seafood exports shipped to the U.S.
It is in Canada’s interest to position differentiated, high-value, unique and niche products. The U.S. market offers an opportunity for Canadian businesses to position products in a way that highlights their Canadian qualities to benefit from Canada’s positive image, such as bison meat, cranberries, blueberries, ice wine, wild rice, lobster, and maple products.
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|Bread, pastry, cakes, biscuits and other bakery products||8%|
|Low erucic acid canola||7%|
|Fresh or chilled beef||6%|
|Oilcake and other residuals||5%|
|Frozen French fries||4%|
|Others (pork, chocolate products, etc.)||70%|
|Source: Global Trade Tracker – October 2017|
Canada has a significant comparative advantage in the production of many high-quality commodities in the grains and oilseed sectors as well as other areas, such as pulses. While the U.S. market has been very responsive to those Canadian products, there are also great opportunities to extend the value of our quality commodities by identifying ingredient claim opportunities; particularly those that are kosher, low allergen, gluten free, and with environmentally friendly packaging.
As of 2016, Canada held 17.4% of the U.S. agri-food and seafood market share. Canada has maintained strong market share in certain product areas within the processed food sector because competitors are more focused on products where Canada has less interest. There is, however, strong competition in beer, beef, bakery products, and various oilseed products.
|Country||Percent of total U.S. processed food imports||Top three processed food exports (% share of country's processed food exports)|
|Mexico||16.5%||Malt beer (22.2%), fresh/dried avocados (12.8%), ethyl alcohol (7.9%)|
|France||5.9%||Grape wine spirits (26.6%), wine (19.5%), vodka (13.3%)|
|Italy||5.4%||Wine (32.0%), virgin olive oil (9.7%), sparkling wine (7.9%)|
|China||4.2%||Apple juice (8.5%), citrus fruit (7.2%), cuttlefish (5.2%)|
|Australia||3.6%||Frozen boneless bovine meat (28.7%), fresh boneless bovine meat (16.9%), wine (12.2%)|
Opportunities for Canada - The North American Free Trade Agreement (NAFTA)
No matter the size of your business, NAFTA offers opportunities that can give you an export advantage. The NAFTA parties have committed to help small and medium sized enterprises (SMEs) reap the benefits of our integrated and regional supply chains.
The brochure, Opportunities for Small and Medium Sized Enterprises in North America, highlights some of the benefits of NAFTA for SMEs. Also, see the Canadian Border Services a Step by Step Guide to Exporting at their SME Centre for information specific to Canadian SMEs.
We can help you grow your business
In today’s competitive markets, knowledge is the key to success.
We offer free international market intelligence services for Canadian agriculture and agri-food businesses, including:
- Identifying new and existing market, sector and product trends and opportunities abroad
- Providing economic, business and consumer trend forecasts
- Analyzing distribution channels, including international e-commerce platforms
- Customized analysis that meets your organization’s unique needs
Contact us for market intelligence services: email@example.com
The U.S. has strict import requirements for many products and Canadian exporters are responsible for determining these import conditions by working with their U.S. importer. However, the Market Access Secretariat (MAS) of Agriculture and Agri-Food Canada is also available to assist in providing export-related information and support. This service offers a single point of contact with the goal of helping the Canadian food industry and businesses reach international markets.
If you have questions about exporting your agriculture or food products, or are looking for support please contact the Market Access Secretariat at firstname.lastname@example.org.
- Agri-Food Trade Services for Exporters
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