That included 2.18 million tons of wheat, 553,732 tons of corn and 454,641 tons of barley, the data showed.

Ukraine’s UGA grain traders union said this month that overall grain and oilseed exports totalled 4.3 million tons in August, up from 4.2 million in July.

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UGA said that included 2.2 million tons of wheat, 794,000 tons of rapeseed and 646,000 tons of corn.

Ukraine typically sends about 95 per cent of its grain exports via its Black Sea ports.

Agriculture Ministry data on Wednesday showed that Ukraine’s grain exports in the 2024/25 July-June season had jumped to 7.2 million metric tons as of Sept. 4 from 4.9 million by the same date of the previous season.

That included 3.8 million tons of wheat, 2.3 million tons of corn and 1.1 million tons of barley.

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“China has been importing a large quantity of meats this year, and has detected virus on the packaging of cold chain products many times, even as lots of disinfection has been done domestically,” Gao Guan, spokesman for the China Meat Association, said by telephone on Tuesday.

“It should be better to handle this (virus control) at the meats exporting origins, and carry out disinfection at the production plants,” as the cost would be lower, and efficiency higher, Gao added.

China has ramped up disinfection and virus testing on frozen food after it found coronavirus on imported products and packaging.

The measures have pushed up costs, disrupted trade, and irritated major exporters.

The semi-official industry body suggested exporters in COVID-19 hit countries should disinfect the outer packaging of products and the inner side of containers before sealing export products, a statement published on the association’s official WeChat account said at the weekend.

The initiative was proposed to “ensure the safety of imported cold-chain food and boost consumers’ confidence in imported cold-chain products,” the statement said.

The proposal came after some major exporters, including JBS in Brazil, started to take measures including extensive disinfection of products and storage sites, to supply China with safe products, Gao said.

Reported cases have shown that contact with packaging contaminated with coronavirus could lead to human infection, said the Chinese association.

The World Health Organization has said the risk of catching COVID-19 from frozen food is low. Chinese officials echoed that such risk was low, but there was still a risk.

“The virus is new. We are still accumulating experience when fighting against it,” Gao said.

“We should get together and discuss how to use the most scientific, efficient and low-cost way to secure public health, and trade at the same time,” Gao added.

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“As an industry, we have quite ambitious targets when it comes to exports,” said J.P. Gervais, FCC’s chief agricultural economist. “The federal government put a $75-billion target by 2025, and the industry was even a little more bold and ambitious, aiming for $85 billion.

“But no matter what, the story is about growth and diversification in the process of growing our exports.”

Last year, Canada ranked fifth globally in ag commodity exports, but only 12th for processed food exports.

“Canada has long been a major exporter of both agricultural commodities and food,” states FCC’s latest annual report on trade. “Yet, in some ways, Canada’s position in global food exports indicates opportunity for growth.”

In the report, the lender identified growth opportunities for five key Canadian food exports: canola oil, pork, beef, potato products, and prepared crab. Expanding sales of the first four to more countries would not only generate more demand for canola, hogs, cattle, and spuds, but also “help reduce financial risks for Canadian producers by lessening our dependency on current major markets,” FCC said in a news release accompanying the report.

Depending on the product, new export growth could be triggered by a number of different things, said Gervais.

“Our competitive advantages are our abundance of natural resources, our stellar reputation when it comes to food safety, our focus on quality, the innovation we’ve had in the industry, and how productive we’ve been for a long time,” said Gervais. “All of these things will have an impact on our ability to grow our exports.”

So does the size of the market (larger ones offer more opportunity) and whether demand is increasing.

“If the market isn’t growing and you want to sell more into that market, you have to steal market share away from somebody else,” said Gervais. “But if there’s growth in that market, it’s a little bit easier because they’re looking at sourcing from different places. There’s more opportunity for you to get a foot in the door.”

But it’s not just about new markets as there is “more of an opportunity to expand into a market where we have a low market share,” said Gervais.

“So where are we under-represented in our export market? When we looked at beef and crab, it’s about Asia. When we look at everything else, it’s about Europe. Those are where the opportunities are for us to diversify and grow.”

Growth areas

Canola oil’s greatest long-term growth potential is in the European market as the EU is planning to phase out palm oil for biodiesel use by 2030.

“This could open the doors for Canadian canola oil,” said the report, which also notes there “continues to be significant non-tariff barriers for Canadian canola in the EU market.

“We know where the challenges are in Europe,” said Gervais. “That’s been well documented. We need to break down some barriers, and we need to make sure they understand some of the regulations we have. If we can do that, I think there are going to be some opportunities there.”

But there’s also further room for growth in countries such as Malaysia, Japan, New Zealand, and Chile.

“I have no doubt that the demand for a healthy vegetable oil like canola oil is going to be strong going forward,” he said.

It’s a similar story for both preserved and prepared pork and beef products, both of which have a “really big opportunity” to expand sales in countries such as Italy, France, Germany, Belgium, the Netherlands, and Poland. However, like canola oil, non-tariff trade barriers continue to be a challenge for beef and pork products exported to the EU.

China remains the largest market for these products, and the impacts of African swine fever on the hog herd there will continue to impact Canadian exports.

“With pork and beef, a lot of it depends on this gap we have,” said Gervais. “Currently, demand is super strong. But it’s also a function of the gap between the demand and supply when it comes to China and how fast they can rebuild their hog herd.

“I think for the foreseeable future, we have quite a bit of an opportunity to grow our exports of beef and pork.”

Export intensity

But in Canada’s agri-food industry, growth and diversification go hand in hand, but the latter isn’t likely to come from existing large food processors, said Gervais.

“Most of them — if not all of them — export to multiple destinations,” he said. “They have, in most cases, already diversified their exports. So the growth and diversification is going to be coming from small- and medium-size businesses.”

That’s easier said than done, he added. Small- and medium-size businesses typically need to scale up and build “export intensity” before they can diversify their markets, even in areas where there is large demand.

“Market signals are important, but looking at it from the bottom up explains why we haven’t seen the diversification that we should expect out of agri-food,” said Gervais. “The strategy of helping small- to medium-size businesses grow their export intensity is going to lead to more diversification over time.”

That will be increasingly important in 2021, as the effects of the pandemic continue to play out. While the export pace in 2020 has been “solid” owing to strong demand for food around the world, next year could bring even more opportunities for exports to countries that are not food secure.

“We have an opportunity, I believe, to say, ‘Hey, here we are in Canada with a stellar reputation when it comes to quality, safety, and stability.’ We have all of that to offer to all of these importers that have their own questions around their food security,” he said.

“I think there’s a huge opportunity for us in 2021 and beyond to say we can be a leading supplier of food in the world.”

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“The mission was a direct result of the China (canola) ban,” said Alberta Canola director Andre Harpe, “When you lose part of your market, you have to make sure your other markets are OK.”

Harpe was one of two Alberta producers who recently travelled to Tokyo and Seoul on a trade mission led by International Trade Diversification Minister Jim Carr to promote Canadian crops.

“We went to touch base with our long-standing customers in Japan, just to let them know that we value the support and the trade that they do with us in canola,” said Harpe, who farms canola, malt barley and peas at Valhalla Centre.

“Our second part of the trip was going to South Korea to chat with them and let them know that we value the business they do with us and ask what we could do to expand on it a bit more.”

Seeing the countries and hearing about their challenges first hand was eye opening for Harpe, who was on his first trade mission. (There were more than 30 engagements in just six days.)

“We went from a country of 36 million to landing in a city of 36 million,” he said. “Tokyo was 36 million and Seoul was 28 million. That’s just a little part of their country.”

Trade missions need all kinds of different people, and it’s good to have producers along, he said. Other Alberta participants were Tanya Fir, the provincial minister of economic development, tourism and trade, Deputy Ag Minister Andre Corbould, and Allison Ammeter, a producer from Sylvan Lake who is chair of Pulse Canada.

“Part of the mission was to focus on maintaining our good markets and make sure that they know we appreciate them,” said Ammeter. “That’s an important part of the trade mission — maintaining the relationships that you have.”

Ammeter enjoyed seeing how different companies conducted their business with the trade ministers and representatives in both countries.

“Some of the discussions we had, they were very open and honest about what the challenges were and what needed to be fixed and what could be done better. That’s got to have value,” she said.

“What we learned in Japan was that they valued trade with us and also the trust they have with us, and the product we have,” added Harpe.

But the Japanese want ongoing engagement to maintain that bond.

“Japan already imports quite a lot from Canada. It brings in wheat, canola and beans,” said Ammeter. “They are very loyal buyers. If they purchase something from you and you treat them well, they will keep purchasing from you.”

The Canadians met with Japanese government officials as well as with the owner of Belex supermarket chain, which sells Alberta canola and uses it in cooking demonstrations.

The time in South Korea was spent on developing relationships, since the South Koreans do not do as much importing from Canada as Japan.

“South Korea is very ambitious in what it is doing, processing and producing,” said Ammeter. “I imagine there will be a lot of good that will come out of that meeting.

“They had a lot of interest in high-oleic-acid canola,” said Harpe.

The South Koreans expressed interest in buying more of this type of specialty oil, if Canadian growers were willing to grow it. They were also interested in using canola oil for biofuel to heat their homes that currently use palm oil.

“We did have discussions about how canola could be used as a biofuel stock during the winter,” said Harpe. “Palm oil doesn’t have the cold tolerance that canola oil does for biofuel.”

The mission also reinforced the importance of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which has strengthened the relationship between Canada and nine other trading nations, including Japan.

“Japan is in a rather unique position, as is Canada, to take advantage of purchases back and forth,” Ammeter said. “I didn’t realize how much Japan was a gateway to (other) countries until I saw the kind of companies it has.

“They have really large food processors and they are recognized as being safe. They know the tastes of people in eastern countries better than we do.”

Both countries have very advanced economies and technology, Ammeter noted.

Alberta has trade offices in both Tokyo and Seoul, which help strengthen trade relations, and business between the countries. The Alberta delegates also spoke about encouraging Japanese and South Korean investment in Alberta.

“I think in six months or a year, we’ll say that this was a valuable trade mission. But you can’t really measure it at the time,” she said.

“The real interest will be if we increased our exports to Japan and South Korea a year from now, and can we trace it back to the mission. To me, that’s not only the goal, but that’s the proof.”

Given the protectionist measures used by China (canola and meat), India (pulses) and Italy (durum), diversifying markets is critical, she said.

“I really believe there is value in the kind of trade mission where we open up trade in a place that we might not have been paying attention to,” she said.

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“Over the past year, there’s been quite a bit of optimism around food and agriculture. It’s been identified as one of the main sectors to grow in this country,” said J.P. Gervais, chief agricultural economist for Farm Credit Canada.

“That means something, but at the same time, it doesn’t mean we don’t have any challenges in front of us. The status quo will allow us to remain where we are, but it’s not going to allow us to grow.”

Canada is currently the fifth-largest exporter of agricultural commodities and the 11th-largest exporter of manufactured food products in the world, according to two trade ranking reports that FCC released earlier this month.

• Read more: The numbers — and the potential — are big for agri-food exports

Gervais said he expects demand for Canadian ag products will grow, but the country still has a ways to go to reach the ambitious targets set out in the Advisory Council on Economic Growth’s report Unleashing the Growth Potential of Key Sectors. The federal report, released earlier this year, sets a target of becoming a top three exporter of ag commodity exports and No. 5 (up from 11th spot) in manufactured food exports.

That’s doable, but not easy, said Gervais.

“The reason we’ve been so successful is because we’ve raised our productivity. But the low-hanging fruits are gone. Our rate of productivity is still increasing, but at a slower pace.”

Investment is key

Improving productivity means innovating — not “simply putting more land into production.”

“Sustainability issues are at the forefront of the discussion when it comes to ag, so we need to rely on innovation, infrastructure, and efficiency to remain competitive,” he said.

“I have no doubt we can be successful doing it, but that’s going to require us to do things a little differently from everybody who’s invested in the supply chain.”

Investment is key, but that’s already happening, Gervais said.

He pointed to water-efficient wheat varieties as a prime example of innovation. Improved genetics allowed many wheat growers in drought-hit parts of Saskatchewan and Alberta surprisingly good yields.

“That investment in innovation directly resulted in our ability to be more competitive and to raise income when it comes to agricultural production,” said Gervais.

Another example is the big investment in grain-handling facilities, export terminals, and canola crush and pulse fractionation plants in recent years.

But more work needs to be done on increasing processing efficiency.

“In Canada, we’ve been really good at product innovation. Now we have to be as successful on process innovations,” said Gervais.

“We’ve got a tight labour supply right now, and it’s not likely to improve. Automation is the obvious solution when it comes to food manufacturing.”

Long-term view

It can be hard to see where farmers fit in the big picture — but they’re actually the driving force behind these industry advances, he said.

“Producers are the ones who are controlling this rate of growth and productivity by the investments they make into the equipment, technology, and management practices they bring on the farm.”

But rising costs in the past three years are a looming issue.

“The margins have been good going back over the past three or four years, but now, margins are getting a little bit tighter,” he said. “For producers, the challenge is, how can we make investments that are going to return a positive profit and continue to sustain our competitive position.

“It’s hard to understand how opportunities in world markets turn into profit.”

That means taking a long-term view of the opportunities coming down the pipe and building a bit of a five-year plan.

“They need to be thinking about where they want to take their farm. Is it growing bigger? Is it scaling back? Is it diversifying into other sectors?” said Gervais.

“We can’t just take a short-term view of the next few months and the market prices we’re seeing out there. We have to take a long-term view and look at where the growth is likely to be coming from.”

“The low-hanging fruits are gone, and for us to take the next step to that next level, we have to look at how we can remain competitive.”

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We remain the world’s fifth-largest agricultural commodity exporter for the sixth straight year, and have also held steady as the No. 11 exporter of manufactured food products.

But “potential” abounds, says FCC’s chief agricultural economist J.P. Gervais.

“There are plenty of commodities where there is potential to grow,” he said. “That speaks to the strength of the industry. It’s a strength of ours that we have the diversity that we have.”

Canada exported US$24.6 billion of ag commodities (6.3 per cent of the global total) last year. But we are No. 3 in some of the world’s fastest-growing commodities — including pulse crops, soybeans, and canola.

However, that increased demand doesn’t always translate into increased prices — at least not in the short term.

“We’ve identified pulses as one of the sectors that is likely to grow quite a bit, but that’s not to say that the sectors we’ve identified as ones that will grow are necessarily profitable right now,” said Gervais.

“The potential demand needs to be factored in over the long term.”

Changes to NAFTA could “bring some disruptions,” and not just because the U.S. buys a lot of Canadian ag commodities and food products, said Gervais.

“It’s also about having integrated supply chains and relying on pricing signals out of the U.S. We have a vested interest in seeing that the border remains open.”

Only about a quarter of Canada’s crop exports go to the U.S., but more than 90 per cent of Canada’s livestock exports and 75 per cent of manufactured food product exports go south of the border.

“The U.S. is a big market for us. There’s no denying that. So we’re just going to have to wait and see.”

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“There’s no other way to fight poverty than to create wealth,” South African farmer Theo de Jager told an international gathering of farm journalists here last month.

“And there’s no other sector in this economy that has the potential to create the kind of wealth that can lift the masses out of poverty.”

Poverty is the “biggest single challenge of this continent,” said de Jager, who produces timber, livestock, mangoes, avocados, and macadamia nuts on his farm in Limpopo, South Africa’s northernmost province.

But the method for meeting that challenge has taken an abrupt shift. Instead of relying on government, the farmers are realizing their best resource is each other, he said. New farm organizations have sprung up in the past few years, including independent agricultural unions that communicate across borders, allowing farmers to network with producers in other African countries.

“The key to unlocking wealth in African agriculture is the way you organize farmers,” de Jager said at the International Federation of Agricultural Journalists’ world congress. “This is the way European farming (or North American) farming got to the way it is today. It all started with small co-operatives. Together, we can do more.”

It’s a theme that Alberta producers who support the Canadian Foodgrains Bank would recognize.

A major focus of that organization, which has projects in nearly 20 African countries, is “agriculture and livelihoods programming” — helping families to not only provide food for themselves but also to boost yields so they can generate an income from farming.

The potential is certainly there, said de Jager.

“How ironic could it be that the producers on this continent are some of the world’s most food-insecure people,” he said.

South Africa is the only net food exporter on the continent, but in many cases, it is easier (and more profitable) to sell its agricultural goods to Europe, Australia, or North America. Less than three per cent of food and fibre sold within the continent is produced there. Again there are parallels with Canada — because freight is so expensive and there are many internal trade barriers, it is often easier to import from abroad rather than cross borders.

A lack of farming equipment is another barrier — the most common tool is the hand hoe (usually wielded by women, who account for more than 70 per cent of farmers on the continent).

“We must mechanize agriculture on the African continent or it will never be a means of an end to poverty,” said de Jager.

However, Africa has advanced greatly in communications technology and producers have more access to information thanks to cellphone technology.

“You can go into the deepest corners of Africa and you can find people with mobile phones,” he said.

European and North American organizations have invested in African farming by sharing equipment, skills, and knowledge. However, there are always challenges with this approach, he said. The best way for people in Africa to access equipment or develop their industry is to group together in small collectives to purchase or run the equipment.

“Even if you could do that flawlessly, it will cost a lot. African agriculture needs a lot of investments to get off the ground and financing is very scarce,” said de Jager.

Very few farmers on the continent own their own land. Only some farmers in South Africa, Namibia, Botswana, and Zambia have landownership rights. Many farmers on the continent are without land deeds — although that does not lessen their love for the land they farm.

“In Africa, there is a very special bond between the people and the land, as if the people were made from this very land which they farm,” said de Jager. “Land is something much more than just a means of production for the African farmer. If you want to invest in farmland as an outsider, you must know this. If you want to use land, you marry the people. It’s a long-term relationship. They have to like you and you must like them.”

Outside investors often fail to understand that.

“Too many investors love the land and try to manage the people, instead of loving the people and managing the land,” he said to applause from the room.

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The advisory council called on Ottawa to create a growth strategy for what it calls “agfood,” which it defines as everything from “field to fork.” Its report says that could generate another US$30 billion in exports (equivalent to nearly two per cent of the GDP) over the next five to 10 years.

The importance of this report is that it has flagged agriculture and food processing as an economic generator of priority within the nation’s economy and there should be full engagement in the strategy right to the office of the prime minister. (The advisory council was created by Finance Minister Bill Morneau.)

This is the first time in my years in the industry that food processing and agriculture have been linked, identified as a key thread in the fabric of economic prosperity, and given so much attention by the federal government.

To the advisory council’s credit, it looked at the examples of countries such as Australia, New Zealand, and Holland that have been successful in growing their food exports. Its recommendation to create a hub connecting all the parts of the sector is interesting and speaks to the shortage of infrastructure within processing.

• More with Brenda Schoepp: We take them for granted, but how would we manage without them?

However, the report did not address the capital infrastructure issues from a commodities perspective, which I feel is an outstanding issue — especially when it comes to ingredients.

If we are to compete and to grow our food industry, we need more than two lanes on the Trans-Canada Highway throughout the nation; greater access to air and sea transportation; and a national railroad policy that prioritizes ag commodity shipping. Growth in the food-processing industry will need to grow at port and plane to ensure controllable logistic costs. How Canadian ingredients get to Canadian manufacturers is still an outstanding problem that needs addressing.

The report also touches on farm subsidies and dairy quota. These have yet to be clarified so we can withhold from judgment. Its contention that government farm subsidies equate to “26 per cent of its economic output” and this funding “is not contingent on meeting productivity-related requirements, such as adopting new technologies” needs further discussion. (What does this mean? Is the council suggesting farm subsidies be axed or that they should be revised to boost productivity and encourage adoption of new technologies?)

The report also says provincial quotas are a handicap to growth within the dairy sector because they “curtail investments in productivity.” How does the dairy industry interpret this in the wake of Ottawa’s November announcement of $350 million to help it adjust to new competition stemming from the trade deal with Europe? Will dairy be on the table?

Our natural capital in Canada allows for some terrific growth, but we cannot grow at the cost of jeopardizing land and water. This then begs the question of where the lens will focus: Will it be on manufacturing or will that be combined with production? How do we protect natural capital while growing food exports by $30 billion?

While it is true that we have had a terrific base of entrepreneurs and companies in Canadian food processing, the big question always comes back to the weak link of commercialization. It is fair game to keep the pressure on in this area as small- and medium-size enterprises are often left to drift at this stage in development. The call for existing financial institutions to provide growth capital for expansion of small- and medium-size companies is one part of the solution. But the report goes further and recommends not only talent recruitment, but also training. (What is not addressed is wage parity within the sector and until we have a gender balance within it, some of the best talent may not be attracted to the Canadian food sector.)

The idea of building research capacity is welcome and needed, and we have much to repair in this area. But in key areas such as genomics and multidisciplinary research platforms, we have world-class researchers. When combined with the needs of the industry around one roundtable, we could see an unprecedented level of product development.

The key is investment from the federal government. That will provide momentum and that, in turn, will attract foreign investment, a critical ingredient to successful food processing. The Prairie provinces are especially in need of a robust and aggressive plan to transform commodities into food products.

If the federal government takes the report to heart (and provides funding), it will require the entire agriculture and food-processing sector to ensure that the end result is world class and rivals models such as Holland for innovation, co-operation, and creativity.

This is our chance and our future to have farming and food recognized as essential for the future prosperity of our nation.

The council’s report can be found at the Government of Canada website.

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For more than a decade, India has required most pulse shipments be fumigated with methyl bromide in the country of origin. But Canada and some other countries were granted an exemption, in part because methyl bromide cannot be used in cold weather. This exemption was extended every six months, but in September Indian officials said that they would no longer grant exemptions. While the current exemption ends March 31, Canadian pulse exports have been effectively halted for several weeks.

• Read more: Pulse sector roiled by India’s fumigation edict
• Read more: Pulse crop sales to India dry up over pest-control plan

Canadian officials have responded with a technical data package laying out the risks of pulse imports to India, including a comparison of the pests of concern for India to the presence of those pests in Canada and the federal regulations surrounding pest control.

Pulse Canada CEO Gordon Bacon said last month that he was hopeful Indian officials would accept those scientific findings — which showed the insects India is concerned about aren’t in Canada — by March 10, but that date came and went without a response.

And while federal Agriculture Minister Lawrence MacAulay and a delegation from Pulse Canada and Canadian Food Inspection Agency were in India at the beginning of March to push for a quick resolution to this policy shift, at press time there was no word as to whether India will move ahead with this new requirement.

India may still grant another six-month extension to review the issue in more detail, but if officials remain firm on this decision, Canada will need to fumigate its pulses in a third country, such as Singapore, during months of cold weather. And the effects of that will be felt across Canada’s entire pulse industry.

“For many years, India has been our biggest customer. India is taking over one-third of our total crop. If we lose access to one-third of our market, we’ll have to see how the marketplace reshuffles,” Bacon said in an interview late last month.

“You can’t just lose one-third of your pea and lentil market and not expect that it will not have an impact on price.”

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The normalization of trade relations would allow U.S. farmers to use lower transportation costs to edge in on the European Union’s food exports to Cuba, Vilsack said.

President Barack Obama has been using his executive powers to chip away at the half-century-old trade embargo, imposed on the communist-ruled nation in 1960, but cannot lift it without approval from Congress that is unlikely under current Republican leadership.

“There are still preliminary steps that can be taken to prepare for that day,” Vilsack said in an interview in Peru.

“When it happens, the United States will be in a very good position to reclaim a portion of the market we’ve lost.”

Vilsack cited soybeans, rice, poultry and biofuels as new markets U.S. farmers could tap in Cuba, which in turn could sell organic products to its former Cold War foe.

The Obama administration is asking Congress for US$1.5 million for on-the-ground studies into challenges to agricultural trade in Cuba, from pests to a diplomatic void left by decades of hostile relations.

“We have not had people on the ground,” Vilsack said. “We need to develop relationships with the people in Cuba so we know who to do business with and who actually makes the deals.”

Vilsack, who visited Cuba last month, said state agricultural commissioners and secretaries have also been traveling to the island on trade missions.

“They have been down to Cuba and they have come back with small contracts for commodities,” Vilsack said.

Vilsack said farmers were the most excited about the reopening of relations with Cuba, once a global sugarcane powerhouse.

The U.S. would aim to meet 50 per cent of Cuba’s food and agricultural needs if trade resumes fully, up from less than 15 per cent now, the U.S. Department of Agriculture said in a statement to Reuters after the interview.

Vilsack also said he was optimistic Obama would persuade Congress to pass the Trans-Pacific Partnership trade deal before the end of his term, despite the recent surge in anti-trade rhetoric in presidential campaigns.

“The president is very committed to getting it done and he intends to work as long and hard as he needs to ultimately get it passed,” Vilsack said.

— Reporting for Reuters by Mitra Taj in Lima, Peru.

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