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Thursday, January 23, 2020
Connecting Our Communities

New markets for traditional crops await farmers

New crops that hit the market with an unexpected – and perhaps unproven—health virtue may capture the imagination of consumers. But for good reason, farmers are always a little leery about growing them.

Is the new crop a fad that could fizzle in a year or two? Is it agronomically sound? Is some pest or disease going to wipe it out, leaving the farmer holding the bag?

Farmers have to think ahead to next season. They need ample lead time if they’re going to gear up for a new crop.

Like other businesspeople, farmers pursue something different to take advantage of an opportunity and meet the demands of an emerging market. That’s usually a lucrative pursuit, especially if conventional markets are saturated.

You’d think they were. Other countries are getting very aggressive with their approaches to trade – not the least of which is our biggest competitor, the U.S., which is being bankrolled by its president so farmers can take less money from the market and more from the US treasury. Growing protectionism, distance and price sensitivity are hurdles Canadian exporters face regularly.

But opportunities galore still exist, says Farm Credit Canada (FCC), the country’s biggest agricultural lender.

In a new report – Diversifying Canada’s agriculture exports: Opportunities and challenges in wheat, canola, soy and pulses – FCC says it believes Canadian farmers have room to expand and diversify their top four agriculture exports beyond their largest traditional markets.

“Canada has done extremely well in establishing strong trade relations in a number of key markets thanks to a long-held focus on getting trade agreements in place,” said J.P. Gervais, FCC’s chief agricultural economist, in releasing the report.

“The long-term success of Canadian agriculture relies on our ability to provide a greater diversity in commodities and food products for new and existing export markets.”

But some changes will be needed.

In 2018, Canada was the world’s fifth largest exporter of agriculture commodities, worth almost $34 billion (behind the United States, Brazil, the Netherlands and China). That same year, the United States accounted for just over 35.6 per cent of Canada’s total agriculture exports, while China accounted for 22.9 per cent.

That’s too restrictive.

Diversifying export markets could help reduce financial risks for Canadian producers by lessening our dependency on dominant importers, the report says.

However, the million-dollar question can be summed up in one word: where? Where are these markets awaiting Canadian exports?

Well, first – and of most interest to our area – is soybeans. In a huge global market dominated by Chinese demand, Canada is a relatively small player. But our limited market share in multiple importing countries can be expanded, says FCC.

Second, pulses, truly an up-and-coming crop, could find more uptake in Europe and the Middle East. Canada is the world’s largest exporter.

Then there’s canola. It was shut out of China, but could break into more European markets.

And finally, even wheat – for which markets must surely be exhausted, you’d think – has the potential for more export further diversification.

Gervais says Canada’s reputation “as a reliable producer of safe, high-quality commodities, combined with growing world demand and our competitive advantage on so many key exports, reduces some of the challenges facing Canadian agriculture.”

And our ag sector, he says, “is highly resilient and is driven by some of the most knowledgeable and innovative producers in the world.” They’ll grow new-old crops on their farm if they think there’s a market … and according to FCC, there is.

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