Book 1 — Sector overview: minister's transition book 2025, AAFC

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

Agriculture and Agri-Food Canada (AAFC) is mandated to support primary agriculture and food and beverage processing, but the sector reaches into the broader agri-food system, which influences other service sectors across the food supply-chain.

In 2024, the primary agriculture and food and beverage processing sectors:

• Employed 541,400 people
• Accounted for 3.0% of Canada's GDP
• Provided 1 in 38 jobs in Canada

The agriculture and agri-food system (2024)

• GDP: $150.8 billion (6.7%)
• Employment: 2,255,700

Primary agriculture

• Gross domestic product (GDP): $31.7 billion (1.4%)
• Employment: 223,000

Food and beverage processing

• GDP: $35.6 billion (1.6%)
• Employment: 318,400

Food retail and wholesale

• GDP: $37.3 billion (1.6%)
• Employment: 645,600

Foodservice

• GDP: $31.9 billion (1.4%)
• Employment: 992,300

Inputs and service suppliers

• GDP: $14.3 billion (0.6%)
• Employment: 76,400

Primary agriculture

An economic driver that is highly diversified across the country

• 189,874 farms
• Farms cover 62.2 million hectares or 6.3% of Canada's land area
• Concentrated across the Prairies, Quebec and Southern Ontario
• Average farm size doubled over the last 50 years due to increased consolidation and technological advances

Farm market receipts (billion $)

• Declined slightly from a record high of $92.8 billion in 2023 to $91.4 billion in 2024
• 5.0% average annual growth rate from 2014-2024
• The largest 10% of farms generate over two-thirds of all revenues

Food and beverage processing

Largest manufacturing industry in Canada

• 17.2% of all manufacturing GDP
• 17.6% of manufacturing employment (agri-food)

Facilities across the country, but most are in Ontario, Quebec, and British Columbia

Food and beverage processing sales totalled $167.8 billion in 2024

Main industries

• Meat product manufacturing: (25.8%) $43.3 billion
• Dairy product manufacturing: (11.5%) $19.2 billion
• Bakeries and tortilla processing: (11.0%) $18.5 billion
• Grain and oilseed milling: (10.8%) $18.0 billion

Purpose and background

Primary agriculture is a very diverse sector which focuses on the on-farm production of agricultural commodities:

• Crop production, such as grain and horticultural crops
• Production of live animals, such as cattle and hogs
• Livestock products, such as milk and eggs

There is significant diversity in the economic structure of the sector, with many different types and sizes of farms.

This presentation aims to provide an overview of:

• The current economic structure of the primary agriculture sector and its evolution over time.
• The use and availability of key resources over time, such as land, the number of animals, the production of livestock products, and fertilizer.
• The evolution of the main economic indicators, with a focus on farm income and its various components, as well as the balance sheet of the agriculture sector.
• A high-level comparison of key similarities and differences with the United States (US) agriculture sector.

The current structure of the sector

Most of the main agricultural commodities are produced across the country but tend to be concentrated in different regions

Grains and oilseeds are concentrated on the prairies, while horticultural products are mostly produced in Ontario and, to a lesser extent, British Columbia and Quebec.

Cattle production is focused in Alberta and, to a lesser extent, Saskatchewan and Ontario. Hogs are in Manitoba, Ontario and Quebec. Supply management (dairy, poultry, eggs) is concentrated in Ontario and Quebec.

Atlantic Canada is more focused on potatoes and dairy, although there is still variation within the region.

Main agricultural commodities by province/territory:

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

Farms are becoming larger and fewer, with larger farms becoming more important to Canada's agricultural production over time

While there are half the number of farms today compared to 50 years ago, Canada's farmland has only decreased by 11% between 1941 and 2021.

New technologies and production practices continually increase farmers' productivity and encourage farms to become larger and more efficient.

Despite consolidation, many smaller farms remain

Over half of all farms are small operations, many of which are hobby farms and represent only a small share of total agricultural production or income.

The largest 10% of farms generate about two thirds of all agricultural revenues, with the largest 1% of farms generating almost one-third of revenues.

Farm size differs depending on farm type

Potato, hog and supply-managed (dairy and poultry) farms tend to be medium- and large-sized commercial operations. In contrast, other farm types (for example, fruit and cattle farms) tend to be smaller since their production lends itself to part-time farming.

Most farm families combine farm and non-farm income

Families with small farming operations rely heavily on non-farm income sources — the farm provides in-kind benefits and some tax advantages.

Average total farm family income for all farm sizes exceeds the average income for all Canadian families.

Evolving farm demographics lead to questions on what the farm population may look like in the future, and how this evolution could happen

With the consolidation of farms, the number of farm operators has declined over the past three decades, by 33% to 262,470 as of 2021.

The share of farm operators 65 years or older continues to increase; farmers tend to retire later than other Canadians. Older farm operators are more likely to have smaller farms, unless they farm with the younger generations.

Women, Indigenous persons and visible minorities are underrepresented among farm operators.

Resource use and production in the agriculture sector

Although total farm area has been shrinking, land used for crops has been on the rise

Total farm area, which includes cropland, summerfallow land, seeded pasture and all other land, has steadily decreased from 2001 to 2021, declining 8% to 62 million hectares (Mha) over this period, consistent with ongoing industry consolidation and increasing pressure from urban expansion.

Despite the decline in total farm area, land in crops rose 4% to 37.9 Mha due to a shift in land uses. The practice of summerfallow (leaving a field unused in one year so as to improve land productivity in a subsequent year) has decreased, and more pasture and marginal lands have been converted into productive cropland.

Growth in Canadian grain production has been driven primarily by yield improvements, as planted area has remained relatively stable

Over the past 2 decades, area seeded to major field crops grew 1% annually, reaching 31.7 million hectares in 2024—a 12% increase from 2004. Changing economics have led to a shift to higher value crops: more oilseeds (especially canola), pulses and special crops were planted, while coarse grain area declined, and wheat remained relatively stable.

Despite volatility, reflecting changing climate and weather variability, Canadian production of major grains and oilseeds has increased at an average annual rate of 3% since 2004, reaching 94.8 million tonnes in 2024—a 42% increase from 2004— mostly as a result of yield improvements and productivity gains.

While grains account for the largest share of land in crop production, there are other crops which also make use of the land base

Potatoes are grown across Canada, but the major producing provinces are Prince Edward Island, New Brunswick, Manitoba and Alberta.

• Potatoes area decreased by an average of 0.5% annually between 2004 and 2024, while production increased by an average of 0.5% per year for the same period.

Horticulture is a diverse sector which includes fruits, vegetables (both greenhouse and field vegetables) and floriculture, nursery and sod.

• The total fruit and field vegetable (excluding potatoes) cultivated area remained steady in the past 10 years, which was around 243,000 hectares in 2024.

Cannabis was legalized in 2018 and does not significantly impact the land base.

There are other crops which do not account for a significant share of national crop production but are regionally important – for example, maple production in Quebec.

Cattle and hog production have increased in the past decade on smaller inventories as average slaughter weights have increased about 10%

Canadian cattle inventories have declined steadily, with inventories at their lowest level since 1988 and North American inventories at their lowest level since 1951, largely due to extended drought, which has driven cattle prices to record levels.

Milk and egg production have been trending upward for the last 20 years (more so for eggs than milk), reflecting population and demand growth in Canada

Milk production has increased on average 1.1% per year between 2004 and 2024. Quebec (36.5%) and Ontario (33.2%) accounted for 70% of national production in 2024.

Egg production has increased on average 2.74% per year between 2004 and 2024. Egg production in Ontario (39%) and Quebec (19.5%) account for 58.5% of national egg production in 2024.

Because supply management focuses on the domestic market, growth is largely determined by domestic factors, such as population growth and evolving consumer patterns within Canada.

Fertilizer is an essential input to crop production, with nitrogen accounting for the largest share of nutrient use

Fertilizer shipments have trended upward from 2007 to 2024. Fertilizer use varies by crop type and nutrient needs, land characteristics and geographic region, and intensity of use, which can influence total use over time.

Overview of key financial indicators

There are several different measures of farm income which contribute to our understanding of the economic health of the agriculture sector as a whole

Agriculture and Agri-Food Canada (AAFC) focuses on Net Cash Income (NCI) at the industry level as the department considers this the most intuitive measure of farm income. It is the difference between r receipts and operating expenses and is the amount of cash generated by the sector in a given year.

Other measures of farm income are also available, which provide information on non-cash element, such as depreciation (the loss of value of capital assets over time) and the value of inventory change (how the value of on-farm stocks, such as stored grain or livestock, change in a year).

While these non-cash adjustments do not impact the cash on hand for producers, they can nonetheless impact the economic status of the sector.

In addition to looking at industry-level income, it is also possible to look at measures of farm-level income to understand how industry-level changes impact various farm types

The main farm-level income measure that AAFC uses is Net Operating Income (NOI). While they are based on difference data sources and have a slightly different scope, NOI is conceptually very similar to NCI and can be viewed as a complimentary measure to NCI.

One of the benefits of using NOI along with NCI is that it gives more precision on how industry level trends are impacting different components of the agriculture sector. NOI can be broken out by farm type (for example, grain and oilseed vs. cattle farms) as well as by revenue class (to compare trends on small vs large operations).

By comparison, NCI, while being better suited to market analysis and understanding the underlying trends impacting commodity markets, is only reported for the industry as a whole and cannot be broken out to the same level of detail.

Crop receipts in Canada have trended upward with accelerated increases since 2020, although a decline is forecast to have happened in 2024

Canadian crop receipts more than tripled from 2004 to 2024, from around $14 billion in 2004 to a forecast $52 billion in 2024. A key driver is strong growth in grain receipts, which average around 70% of total crop revenues.

Strong global demand, higher prices, and productivity gains —particularly in canola and wheat— have driven long-term growth in Canada's grain sector, though prices have eased since mid-2022. Higher revenues from other crops, including legalized cannabis since 2018, have also contributed to overall growth.

Canadian livestock receipts have more than doubled between 2004 and 2024 with double digit annual growth 2021 to 2023

Total livestock receipts were forecast to have achieved a new record in 2024 at $39.7 billion (+6%).

Average annual growth in livestock receipts between 2004 and 2024 was 4.3%, with cattle having the strongest growth at 6.1%.

Supply managed commodities (dairy, poultry and eggs) comprised about 38% of the total in 2024, down from 41% in 2004. Over this 20-year period, cattle has increased its share of the total, while hogs and dairy have lost some share.

Program payments declined, both in absolute terms and as a share of receipts, from 2004 to 2018, but then increased in the following years, largely due to increased AgriInsurance payments

AgriInsurance payments increased recently due to poor harvests, particularly in 2021 (severe drought in Western Canada). That, combined with higher prices for crops, led to much larger payouts. Other business risk management (BRM) payments have been relatively stable.

The program payment share of total farm cash receipts also increased during that time but at a slower rate, as the overall value of production also increased. As a result, despite the increase in payments their share of total receipts was still below the level of two decades before.

Operating expenses are forecast to have reached about $75.8 billion in 2024, after seeing very significant growth in 2021 and 2022

Expenses have grown at about 5% per year over the past 2 decades, ranging from a 19% increase in 2022 to a 3% decline in 2009. Much of the variation comes from changing prices as opposed to quantities used. Some expenses, such as fuel, fertilizer, and feed are heavily influenced by changes in international markets and saw significant increases in 2021 and 2022 due to the global economic recovery from COVID-19 and Russia's war on Ukraine. Others, such as labour and general business expenses, are more dependent on domestic factors and can be more influenced by general inflation.

Net cash income, which is the difference between total receipts and cash expenses, has generally increased over the past 20 years, as receipts have increased faster than expenses

Both Nominal and Real NCI have generally followed an increasing trend over the past 2 decades, with both expected to have fallen in 2024, with average annual growth rates of 6.0% and 3.5% respectively.

The agriculture sector's balance sheet has grown significantly over the past 20 years

Net worth has increased over time as assets have grown faster than liabilities. This is driven in large part by the growth in farm real estate, principally due to increases in land values.

Summary and key takeaways

The sector has a significant level of diversity in terms of production, types of farm, farm sizes and demographics

Farm operators are becoming older and farms are becoming larger and fewer, with larger farms becoming more important to Canada's agricultural production over time. Despite consolidation, half of farms remain small operations, although they contribute little to overall agricultural output.

Production has increased over time with new technologies and practices, reflecting improved productivity and more efficient use of resources

Crop production has generally increased due to increasing yields, as the overall land base has been fairly steady. Strong global demand, higher prices, and productivity gains have driven long-term growth in Canada's grain sector.

Red meat production was down in the early 2000's, mainly for cattle, but has increased over the past decade, despite falling inventories, while marketing of supply-managed products (specifically eggs and milk) has grown to support an expanding domestic market.

Program payments have increased since 2018, largely due to increased AgriInsurance payments, but as a share of overall receipts are still below levels seen two decades ago.

The overall economic health of the sector is generally good, with both income and balance sheets increasing over the past 2 decades

Despite the increases in income and assets, there can nonetheless be significant variation by farm types and regions, based on local production profiles and other conditions.

While farm cash receipts have grown and seen particularly impressive gains in recent years, operating expenses have also increased in the past two decades, with significant increases for inputs in 2021 and 2022 due to the global economic recovery from COVID-19 and Russia's war on Ukraine.

Pricing dynamics vary between commodities, but include changes in international supply and demand and the impact of inflation.

Extreme weather has also impacted the sector, impacting crop yields in various parts of the country and creating feed availability challenges for livestock producers.

As the sector is export oriented, it's very sensitive to changes in the trade environment.

Growth in the balance sheet has been driven largely due to consistent increases in land values, which has underpinned the continued growth in net worth.

Annex

Variety of agricultural production and farms

Producers make daily production and financial decisions to manage the various risks they face and remain profitable.

There are significant differences in the challenges that individual producers face, depending on:

• the commodities they produce
• the size of their operation; and
• regional differences

Together, farms of all sizes contribute to Canada's productive agriculture sector, to local and global food, as well as to land stewardship and regional vitality.

To reflect the reality of producers on their farms, the next slides profile the different types of farms in Canada.

The illustrative farms in the following slides reflect conditions from 2022, and economic conditions have changed since these examples were put together.

Grain and oilseed producers

• 60,000 farms
• Sales totalled $39 billion, or 44% of all 2022 market receipts
• Record high sales prices in recent years have fueled significant growth.
• Grain and oilseed farms are found in all regions of the country:
  • However, the Prairies constitute 76% of grain, oilseed and pulse production; the most important crop by value is canola, followed by wheat and barley.
  • Corn and soybeans dominate in Ontario and Quebec.
• Grain and oilseed farms range widely in size, from small part-time farmers to very large businesses with sales of $6.5 million and more.
• The Prairies have seen significant recent investment projection in canola crushing capacity, partly in response to biofuel demand.

Main risks/challenges

• Prevalence of drought conditions since the 2021 drought.
• Ensuring good transportation conditions to export markets throughout the fall, winter and spring.
• Exposure to global markets and price fluctuations.

Cattle producers

• 38,000 farms
• Sales totalled $12 billion, or 14% of all 2022 market receipts
• The largest 1% of cattle farms account for almost half of the sector's total production
• Cattle farms are found in all provinces; however, about 60% of Canada's $12 billion revenue is reported in Alberta.
• Cattle farms differ in size and type of production.
• Cow-calf farms tend to be medium-sized family operations that keep beef cows on pastures and sell calves that will move through the production system to backgrounding lots and feedlots.
• About one third of Canadian beef production is exported, with the majority of exports destined for the United States.
• 95% of beef slaughter capacity in Canada resides with four companies.

Main risks/challenges

• Impacts of 2021 drought (water and feed availability)
• Efforts to increase sustainability of production, and traceability of products
• Slaughter capacity

Hog producers

• 2,300 farms
• Sales totalled $6.5 billion, or 7% of all 2022 market receipts.
• More than one third of hogs are produced on processor-owned farms
• Most of Canada's hog farms are in Quebec, Ontario and Manitoba.
• Hog production includes both independent producers and production owned by processing companies. The largest 1% of hog farms account for 31% of total production, with average sales of $45 million.
• Some hog producers are specialized, that is, keeping sows to produce piglets (wieners) or raising piglets to market weight.
• Other hog farms are "farrow to finish," that is, they operate the full cycle of raising sows, producing piglets, and raising them to slaughter hogs.
• The largest four companies represent 72% of slaughter capacity in Canada.

Main risks/challenges

• Risk of African swine fever
• Sufficient processing capacity and access to foreign markets
• Issues with public trust (for example, animal welfare, antibiotic use)

Dairy producers

• 9,700 farms
• Milk sales totalled $8.2 billion, or 9% of all market receipts
• Dairy farms in Quebec and Ontario account for 70% of all dairy production with revenues of $6 billion
• Approximately half of Canada's dairy farms are in Quebec, another third in Ontario.
• The total asset value of dairy farms varies with farm size.
• Quebec dairy farms are on average smaller, with a herd size of around 66 cows and can have assets of approximately $3 million.
• Ontario farms have an average herd of 85, with dairy farms in British Columbia and Alberta averaging 144 cows and assets of up to $12 million.
• With or without robotic milkers, dairy farming requires a significant amount of daily, year-round labour, and most dairy farmers are full-time operators.
• Dairy farms operate under the supply management system, with milk prices set based on cost of production, generally resulting in no price fluctuations.

Main risks/challenges

• Challenges with market access provided under new trade agreements (Canada-European Union Comprehensive Economic and Trade Agreement [CETA], Canada-United States-Mexico Agreement [CUSMA]).
• Potential declines in domestic demand for dairy products from increasing competition from plant-based protein products.

Poultry and egg producers

• 4,400 farms
• Poultry and egg sales totalled $5.9 billion, or 7% of all market receipts
• Quota represents on average 50% of the farm assets of poultry and egg farms.
• Ontario, Quebec and British Columbia account for more than three quarters of all poultry and egg farms and their total production.
• Poultry and egg farms are usually specialized and produce only one of the following: broilers (meat chicken), turkeys, pullets (young hens), eggs, or hatching eggs.
• Raising broilers takes 6 to 8 weeks and is highly automated.
• Egg production requires daily collection and sorting, even if partly automated.
• The largest 1% of poultry and egg farms account for 23% of total production, with average sales of $23 million.
• Production is under supply management, except for raising of pullets.

Main risks/challenges

• Challenges with market access provided under new trade agreements (CETA, CUSMA).
• Imports of spent fowl (old laying hens), which impacts domestic supply.
• Addressing anti-microbial resistance and pathogen reduction.
• Issues with public trust (for example, animal welfare associated with production methods).

Fruit and vegetable farms

• 7,600 farms
• Fruit and vegetable sales totalled $3.6 billion, or 4% of all market receipts
• Fruit and vegetable farms are one of the main agricultural employers
• Ontario farms are responsible for one third of the sector's $3.3 billion in revenues, with Quebec and British Columbia farms being big contributors.
• The largest 1% of fruit and vegetable farms are responsible for 28% of the sector's revenues, with average sales of $5.7 million.
• Fruit and vegetable farming is seasonal and labour intensive; horticulture accounts for 45% of all paid employees in primary agriculture and 85% of seasonal agricultural temporary foreign workers in Canada.

Main risks/challenges

• Challenges securing seasonal labour and reliance on temporary foreign workers
• Strong competition for exports (two-thirds of production), as well as from imports
• Impacts of adverse weather and price fluctuations

Potato farms

• 800 farms
• Potato sales totalled $1.7 billion, or 2% of all market receipts
• Farms are reliant on demand from processors and the food service industry, as seen during COVID-19
• Prince Edward Island potato farms are responsible for about a quarter of potato production in Canada, followed, not far behind, by Manitoba and Alberta farms.
• About 65% of potatoes are grown for processing, another 20% are table potatoes, and 15% are seed.
• Potato farms in the Atlantic provinces tend to be smaller than those in the Prairies.
• The largest 1% of potato farms generate about 12% of the sector's total production, with average sales of $15 million and an average asset value of $51 million, largely in land and equipment.

Main risks/challenges

• Public trust associated with environmental impacts
• Utilizing innovation in production management to reduce pesticide use
• New variety development required

Greenhouse operations

• 2,200 farms
• Greenhouse sales totalled $2.2 billion, or 3% of all market receipts
• Greenhouse production: the fastest-growing sector of Canadian agriculture
• The majority of greenhouse farms are in southern Ontario; the remaining third operate in British Columbia and Quebec.
• Production is focused on peppers, tomatoes and cucumbers.
• While a number of small greenhouse farms exist, the majority of production happens on farms with $5 million in revenues or more.
• The largest 1% of farms generated 32% of total production, with average sales of $20 million and assets of $28 million.
• Greenhouse farms do not require a large land base, with the most significant investment being in greenhouse technology.

Main risks/challenges

• Challenges securing seasonal labour and reliance on temporary foreign workers
• Ability to innovate and refine production management to reduce pesticide use, energy use, and increase automation

Canada's agriculture and agri-food sector

The agriculture and agri-food sector touches all Canadians and communities in Canada.

Key players in this sector

• Producers/primary agriculture
• Processors
• Food retailers and wholesalers
• Foodservice providers
• Input and service suppliers

These players are also part of a broader supply chain, which also includes

• Transportation providers
• Consumers, at home and abroad

Primary agriculture

• Gross domestic product (GDP): $31.7 billion (1.4%)
• Employment: 223,000

Food and beverage processing

• GDP: $35.6 billion (1.6%)
• Employment: 318,400

Food retail and wholesale

• GDP: $37.3 billion (1.6%)
• Employment: 645,600

Foodservice

• GDP: $31.9 billion (1.4%)
• Employment: 992,300

Inputs and service suppliers

• GDP: $14.3 billion (0.6%)
• Employment: 76,400

Primary agriculture

Canada has over 62 million hectares (154 million acres) of agricultural land concentrated primarily across the Prairies, Quebec and Southern Ontario.

Between 2020 and 2024, the 3 Prairie provinces accounted for an average of 59% of total farm cash receipts (FCR), including 60% of crop receipts and 45% of livestock receipts.

Some provinces are more diversified than others. Primary agriculture's contribution to provincial gross domestic product varies across Canada.

Canadian producers have recently benefited from record growth

Farm market receipts (FCR) have grown 7.6% on average annually between 2020 and 2024 and reached $91.4 billion in 2024, the second highest year on record, after 2023 at $92.8 billion.

While grains and oilseed remain the largest component of FCR, growth has slowed in recent years and even reversed in 2024. At the same time, the cattle and calves sector has seen strong growth in recent years due mainly to higher prices, and generated the largest value growth since 2022. At $16.8 billion in farm market receipts, cattle and calves accounted for 18.3% of total farm market receipts in 2024.

Most Canadian producers have seen solid growth over the past decade

For primary agriculture, net cash income reached a new record of $24.0 billion in 2023, as receipts continued to grow and growth in expenses moderated.

External factors like shifts in commodity prices, disease, weather variability, and market access can impact net cash income or result in variability between commodities and sectors.

Food and beverage processing

The food and beverage processing sector is the largest manufacturing sector in Canada in terms of both gross domestic product and employment. Over 8,800 food and beverage processing businesses provide direct jobs for over 318,000 Canadians, employing more Canadians than the entire transportation equipment manufacturing sector.

The processing sector uses over half of Canada's primary agricultural production and supplies about 80% of all processed food and beverage products in Canada.

In 2024, 95% of food and beverage processing establishments were small operations (0-99 employees) with little variation across sub-industries. Processing plants are located across the country but primarily located in Ontario, Quebec, and British Columbia, which account for 77% of total food and beverage processing establishments.

Wholesalers, food retail, and foodservice

Wholesale is divided into farm products and food, beverage and tobacco products

• In 2024, sales of farm products at wholesale reached a record high of $41 billion, while food, beverage and tobacco products at wholesale increased slightly to $125 billion in sales, a year-over-year increases of 11% and 0.1%, respectively.

The Canadian food retail sector is highly concentrated

• It is estimated that the top 3 traditional food retailers (Loblaw, Sobeys, and Metro) and the top two general merchandise retailers (Walmart and Costco) accounted for about 75% of total grocery sales in 2024. (The estimated market share of Canada's major food retailers was obtained via the 2024 Canada: Retail Foods Annual reports United States Department of Agriculture. November 4, 2024.
• Large chains dominate in each region of Canada.
• Independents (for example, co-operatives and single stores) are most common in Western Canada and Ontario but are still outnumbered by the large chains.

Foodservice sales have mostly recovered since COVID-19, but have shifted in composition

• In 2024, total foodservice sales reached $97 billion, up 4% from 2023 and 25% from 2019.
• Sales at limited-service (take-out) eating places reached $45 billion, or 46% of total foodservice sales. This has grown from a 44% share in 2019.
• Full-serve restaurant sales contributed $42 billion to total sales. This has declined from a 45% share in 2019.
• Special food services (caterers and mobile food services) had sales of $8 billion, while drinking places had nearly $2.5 billion in sales, 8% less than in 2019.

Food price inflation has slowed, but price levels remain high

The Consumer Price Index (CPI) rose 2.4% on an annual average basis in 2024, following gains of 3.9% in 2023, 6.8% in 2022, and 3.4% in 2021. The increase in 2022 was a 40-year high, the largest increase since 1982 (+10.9%).

Grocery price increases (+2.2%) for 2024 slowed considerably compared to the preceding two years – which saw food price inflation at 7.8% in 2023 and higher still in 2022 (+9.8%) – to fall below pre-pandemic levels (+3.7% in 2019).

The sector faces significant challenges

Despite the Western drought of 2020/2021, COVID-19-related supply chain disruptions, and rising input costs due to Russia's war against Ukraine, Net Cash Income rose over 50% between 2020 and 2023 thanks to robust crop and livestock commodity prices which lifted receipts higher, exceeding the increase in farm expenses.

That said, the current trade climate is the most fragile it has been in decades. Producers and processors are facing tariffs in many markets and will need renewed resilience to weather the uncertainty of international trade.

With the United States (U.S.) specifically, Canada's top export commodities in 2024 included grain products ($10.2 billion), oilseed products ($8.3 billion), red meats ($5.6 billion), fish and seafood ($5.5 billion), and vegetables excluding potatoes ($3.7 billion). Exports to this once-reliable market will be more challenging for these commodities in particular.

Canada is a major force in global agricultural markets

From 2013 to 2024, exports of Canadian agriculture, agri-food and seafood products increased by 98.9%, reaching a record high of over $100.3 billion in 2024.

Though export rankings change over time, since 2020 Canada has not been ranked higher than 7th in the world. In 2024, Canada was ranked the ninth-largest exporter of agriculture, agri-food and seafood in the world, behind the U.S., Brazil, Netherlands, Germany, China, France, Spain, and Italy. Exports in the first two months of 2025 totalled $16.8 billion, up from $15.2 billion during the same period in 2024.

If previous trends were to continue, total value of agriculture and agri-food exports, including fish and seafood, would reach $121.8 billion by 2034. These projections, however, are likely optimistic. A recent RBC report indicates that, if new measures are not taken, Canada will continue to fall behind global competitors, who are gaining ground in the world's top growth markets.

The challenges of an uncertain trade environment

If a trade climate similar to that of recent decades is assumed, then exports of agricultural and agri-food commodities are projected to drop slightly over the short term as commodity prices are expected to decline from their current historical peaks. Such projections would be affected by ongoing tariffs or trade uncertainty.

• Recent tariffs (for example, China's tariffs on hog and canola oil and meal; U.S. tariffs on various commodities) could negatively impact future agricultural and agri-food exports, as any markets lost during the trade actions will need to be rebuilt if foreign customers have developed relationships with new exporters.
• The new U.S. administration's trade policy approach has created significant uncertainty in global markets. Economic uncertainty exacerbates underinvestment (for example, in innovation).
• Empirical evidence suggests that, in the short run, uncertainty can be as damaging as the tariffs themselves. In the long-run, things can be even worse given the investors' loss of confidence in trade agreements and other institutional arrangements. In Canada, major investment projects (for example, canola crushing and biofuel plants) have already stalled, blaming uncertainty as the cause.

Canada can remain a competitive global force

Canada has some key advantages that can help make it a leader in food production and processing:

• abundant land and water resources;
• access to international markets and trusted trading partners;
• renowned research and development institutions and a highly educated workforce;
• global reputation as a trusted supplier of safe, top-quality food;
• industry leadership in the adoption of new technologies; and
• strong tradition of land stewardship.

Targeted action moving forward can help the sector continue to capitalize on these strengths into the next decade and beyond.

Key takeaways

• Canada has been a major force in global agricultural markets and has many advantages and opportunities in food production and processing.
• Most Canadian producers have benefited from growth over the past decade.
• Continued growth will require overcoming significant challenges, such as the impacts of severe weather events on production, volatility in global trade, the need for investment in research and adoption of emerging technology, and the impact of food price inflation on Canadians.
• Although Canadian agricultural exports are still growing, Canada's position in global agriculture and agri-food trade has slipped. Targeted action is needed for Canada to keep pace with global competitors.

Canada is a significant agriculture exporter, making it vulnerable to disruptions

• The current global trade environment is challenging for several reasons (such as technological advancements, consumer demands, labour, inflation, geopolitics, protectionism, economic security), and tariff and non-tariff barriers continue to disrupt trade.
• With half of the value of Canada's total production exported, sector growth relies on predictable trade.
• In 2024, Canada was the 5th-largest exporter of agri-food and seafood products with exports reaching $100.3 billion. This value represents a 1.1% increase from $99.2 billion in 2023, and 62.7% from the $61.6 billion recorded in in 2015 (see Annex).
• In 2024, the top 3 exported agri-food and seafood products by value were wheat and meslin ($10.3 billion); baked goods ($7.7 billion); and canola oil ($6 billion).

Canada's agricultural trade is concentrated within a few critical markets

• Collectively, Canada's top 5 markets accounted for 83% of Canadian agri-food and seafood exports to foreign markets in 2024, up from 77% in 2015.
• Canada's exports remain concentrated in five markets, with the majority destined to the United States (U.S.; accounting for 61.9% of exports in 2024 compared to 53.3% in 2015), followed by China (9.6%), Japan (4.9%), the European Union (EU, 4.4%), and Mexico (2.2%).
• Exports to the U.S. have increased by a compound annual growth rate of 7.3% since 2015.

Given the sector's strong reliance on both the U.S. and Chinese markets, as well as its current dual vulnerability with respect to tariffs from each, trade diversification is taking a new, vital importance

AAFC's international trade toolbox

AAFC supports Canada's trade agenda by maintaining, expanding and regaining access to international markets, pursuing free trade agreements, defending science-based trade rules, and promoting the sector in key markets.

Free Trade Agreements (FTAs)

• Work with Global Affairs Canada (GAC) to negotiate new regional/bilateral FTAs, as well as with GAC and missions abroad to continually increase utilization of FTAs (leverage untapped potential) and implement existing FTAs for the benefit of the sector.

Collaboration with multilateral institutions and trading partners

• Demonstrate Canadian leadership at the World Trade Organization (WTO) and other organizations and international standard setting bodies such as the United Nations' Food and Agricultural Organization, G7 (Canada's 2025 G7 Presidency), G20, Asia-Pacific Economic Cooperation (APEC), and Inter-American Institute for Cooperation (IICA), to preserve trade predictability and advocate for rules-based trading systems.
• These bodies can also provide a forum for cooperation on science and global food security, and opportunities for bilateral meetings with international counterparts that can be leveraged to promote trade and sector interests.

Market access and advocacy

• Work with the Federal Market Access Team (GAC, Canadian Food Inspection Agency), and other partners to maintain and grow new market access opportunities, address issues, foster bilateral partnerships, and support trade diversification.
• Communicate Canada's best practices, systems and policies related to food safety, quality and agricultural sustainability as a brand asset.

Market development and promotion

• Partner with other federal government departments, provinces and territories, and industry to deliver targeted initiatives under the Canada Brand umbrella to support Canadian businesses in seizing global opportunities by raising the visibility of Canada's agriculture and seafood products and their Brand attributes with buyers and influencers.
• Support trade diversification, particularly in the Indo-Pacific, through in-market promotions and international tradeshow participation.

FTAs: Advancing Canada's trade agenda

Canada has 15 bilateral and regional FTAs covering 51 countries, giving Canadian exporters a competitive edge in two thirds of the global economy.

While 45% ($44.9 billion) of Canada's agri-food and seafood exports benefited from FTA coverage in 2015, the share of exports benefitting from FTAs rose to 79% by 2024 ($79.2 billion).

In 2024, only 17% ($17.1 billion) of exports went to non-U.S. FTA partners, compared to 19.6% ($12.1 billion) in 2015.

Regional FTAs

• Canada-United States-Mexico Agreement (CUSMA, 2020)
• Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP, 2018)
• Canada-European Union Comprehensive Economic and Trade Agreement (CETA, 2017)
• Canada-European Free Trade Association (EFTA, 2009)

Bilateral FTAs: Colombia, Chile, Costa Rica, Honduras, Israel, Jordan, Korea and Panama, Peru, Ukraine and United Kingdom Trade Continuity Agreement (TCA)

Concluded FTAs (not yet in force): Ecuador and Indonesia

Ongoing negotiations: Association of Southeast Asian Nations (ASEAN) and Costa Rica's accession to CPTPP

Exploratory discussions: Philippines

CUSMA review: Requires a joint review in 2026, with certain Canada-U.S. dairy-related provisions in 2025

Collaboration with multilateral institutions and trading partners

World Trade Organization (WTO)

• Preserve and implement WTO rules relevant to agriculture trade.
• Engage with partner departments to ensure that Canada's trade remedies system is responsive.
• Advance and promote science and risk-based decision making and the use of international standards, guidelines and recommendations in regulatory development.
• Engage with like-minded international partners (for example, Australia, New Zealand, United Kingdom, EU and Japan) to coordinate efforts at WTO and international standard setting bodies [REDACTED]

Food and Agriculture Organization of the United Nations (FAO)

• Supports standard setting bodies (Codex, International Plant Protection Convention), produces analysis on wide range of practices and topics.
• Canada advocates FAO to increase support for standard setting, merits of open trade, innovation.

Group of 7 (G7)

• Canada and developed countries; often promoting global initiatives to improve conditions world-wide.
• Important Ministerial platform; Canada hosting G7 in 2025.

Group of 20 (G20)

• Brings together nearly all the world's largest countries and economies.
• Canada working with like-minded countries to advocate the role of trade, science, and innovation in global management of agricultural issues.

Market access and advocacy: Activities currently underway

United States (U.S.)

Current trade environment with the U.S. is unpredictable and uncertain. Current efforts are focused on:

• sustained and coordinated advocacy and engagement with decision-makers to mitigate ongoing tariff threats and defend Canada's interests, leveraging efforts being undertaken by industry, provinces and U.S. allies
• U.S. biofuel policy
• voluntary Product of USA labelling
• state level measures on animal welfare

Mexico and the Americas

Current efforts are focused on:

• [REDACTED]
• [REDACTED]
• Monitoring constitutional reforms (for example, genetically modified foods)

European Union (EU)

Efforts are focused on sustained advocacy and collaboration to maintain access in the context of demanding non-tariff measures:

• Deforestation regulation (soy, cattle/beef, cocoa, coffee, palm oil and forest) Proposed measures on animal welfare (transport), and new genomic (plant breeding) techniques
• Direction by EU to regulate pesticide regulations based on environmental factors (rather than consumer safety)

Indo-Pacific region

Efforts are focused on engagement with Japan, Korea and ASEAN countries to increase access for Canadian agriculture products, including work through the new Indo-Pacific Agriculture and Agri-Food Office

Ongoing engagement efforts with China are focused on addressing:

• 100% tariff on imports of Canadian canola oil, canola meal and peas
• 25% tariff on fish, seafood and pork products
• Anti-dumping investigation on imports of Canadian canola seed
• Other trade concerns, including beef and pet food access

Market development and promotion: Supports for agricultural exporters

Agriculture and Food Trade Commissioner Service (AFTCS)

• 44 Trade Commissioners in key markets around the world, along with other federal, provincial and territorial (FPT) and industry resources abroad, support Canadian agricultural exporters and industry associations in achieving international business goals by providing in-market intelligence, advancing export opportunities, and resolving market access issues.

Indo-Pacific Agriculture and Agri-Food Office

• Focused AFTCS hub in Manila, Philippines, to position Canada as a preferred supplier in the region by strengthening partnerships, advancing technical cooperation, and supporting Canadian businesses in finding new opportunities to diversify their exports.

Canada Brand Program

• Provides members (over 200 export-ready registered businesses) access to a digital marketing toolbox to assist them in showcasing their products and elevate the trusted reputation of Canadian products in global markets.

Canada Pavilion trade shows and in-market activities

• Provides small and medium-sized enterprises the opportunity to promote their products and showcase Canada at eight flagship trade shows across the globe and other promotional activities.

Global analysis

• Provides global market intelligence, data and analysis to support industry, provinces and territories in assessing international market opportunities.

AgriMarketing program

• Provides funding to national organizations ($129 million over 5 years, 2023-2028) to support industry-led promotional activities aiming to increase and diversify Canadian exports in international markets and seize opportunities.

Portfolio support for agricultural exporters

AAFC works with partnering departments and agencies to guide, regulate, and develop the agriculture and agri-food sector on behalf of Canadians, including:

Canadian Food Inspection Agency (CFIA) is Canada's sole competent authority responsible for administering and enforcing regulations for the import and export of food, plant and animal products, and thus has a critical role in enabling trade for the sector.

• Negotiates, attests, and certifies import/export conditions (for example, sanitary and phytosanitary requirements) to mitigate unnecessary regulatory burden and support market access and trade stability, while ensuring food safety and the integrity of domestic resources.
• Engages at International Standards Setting Bodies (for example, CODEX, International Plant Protection Convention, World Organization for Animal Health, WTO) to influence the development of international rules and science-based standards for plant protection, animal health, and food safety which underpin global trading systems.
• Strengthens international cooperation by delivering technical assistance and capacity building to other countries to support enhanced regulatory systems and reliable trading relationships.

Farm Credit Canada (FCC) provides financial and non-financial products and services designed to support the evolving needs of the industry, including through trade-focused programs.

• FCC's Trade Disruption Customer Support program, launched in March 2025, will provide $1 billion in new lending to help alleviate financial challenges experienced by agriculture and food industry clients affected by U.S. tariffs.

Export Development Canada (EDC) provides capital, risk mitigation insurance, trade knowledge and global connections to help Canadian companies grow their businesses.

• EDC's Trade Impact Program, launched in March 2025, will facilitate an additional $5 billion over two years to support eligible companies across a range of products, including agriculture, by helping them navigate economic challenges and market uncertainties.

Source: Global Trade Tracker (GTT), April 2025

Breakdown — Global exports

Source: GTT, April 2025

Source: GTT, April 2025

Breakdown — global imports

Source: GTT, April 2025

Source: GTT, April 2025

Breakdown — Canada's top 6 export markets

Source: GTT, April 2025

Source: GTT, April 2025

Source: GTT, April 2025

Source: GTT, April 2025

Source: GTT, April 2025