Clay Eastwood, manager of International Marketing

Monthly Market Highlight

Canada has historically been one of the top destinations for U.S. pork. In 2017, U.S. pork export value reached $792.4 million (down 1 percent) and was the fourth largest volume market at over 459 million pounds (up 1 percent) compared to 2016. As of 2017, the U.S. held nearly 85 percent market share of fresh, chilled or frozen pork imports in Canada, followed by Poland, Germany, and Denmark. The North American Free Trade Agreement (NAFTA) between the United States, Canada, and Mexico and in place January 1994, created the world’s largest free trade area. Since NAFTA’s implementation, trade between the United States and its NAFTA partners has soared. Canada and Mexico consistently rank among the top markets for U.S. food and agricultural products, including U.S. pork. The U.S. Mexico Canada Agreement (USMCA) set to replace NAFTA awaits ratification by each country, but nonetheless signifies continued positive trading partnerships with U.S. pork’s closest geographical markets.

Expansion of U.S. pork exports to Canada over time.
Source: USMEF

Overview of Canada

Situated along the northern border of the U.S., Canada is comprised of ten provinces and three territories. Canada covers 3.85 million square miles and is the world’s second-largest country by total area. Canada has a population exceeding 36 million with the majority of its population concentrated in urban areas as the majority of its land dominated by forest and tundra. In 2017, the U.S. exported $20.5 billion worth of agricultural products to Canada, ranking first among U.S. agricultural export markets and up 46 percent from $14.1 billion in 2007.

According to the USDA, in 2017, U.S. agricultural exports to Canada totaled $20.5 billion, making it the #1 market among U.S. agricultural export markets.
Source: OECD

Animal Protein Consumption and Domestic Industry

Poultry consumption dominates per capita protein consumption in the Canadian diet. Following poultry, other proteins drop considerably with fish, beef, and pork ranking similarly and little per capita consumption of lamb. Per capita consumption of poultry has remained steady over the last ten years, with a slight uptick in recent years whereas fish, beef, and pork have remained consistent over time. Pork ranks highest among domestic animal protein production followed by beef, poultry, and fish production.

Animal protein consumption remains fairly constant over the last ten years.
Source: OECD

Retail Sector

According to a recent Global Agricultural Information Network (GAIN) report on the retail food sector, Canada’s retail market is mature and consolidated, with five “major” stores commanding 80 percent ($59.5 billion) of the market. Retail sales among traditional grocers have been flat in recent years and much of the sector growth has come from general merchandisers, such as Costco and Walmart. Approximately 7,000 independent and convenience stores across Canada comprise the remaining 20 percent ($14.5 billion) of retail food sales. Canadian “Dollar” stores have recently expanded low-priced food product offerings, posting 12 percent sales growth in 2017.

Looking Ahead

U.S. pork and pork variety meat exports to Canada reached 411 million pounds for January – November 2018. The impact of the new U.S. Mexico Canada Agreement (USMCA), designed to replace NAFTA, brings optimism for a restored and unrestricted trading partnership with one of U.S. pork’s largest bordering markets.