Trade and production: Canada

The UK has a trade deal with Canada which was rolled over from the EU-Canada agreement, to ensure continuity of trade following the EU Exit. Talks are ongoing to renegotiate the agreement to secure a better deal for both countries. These discussions are happening alongside the UK’s accession to CPTPP.

Beef

An average 1.35 Mt of beef is produced annually in Canada. Much of this is consumed domestically, with just 400 Kt exported each year. The key market is the USA, which is to be expected due to its geographical proximity. Over 298.5 Kt of beef is sent to the USA on average annually. Other key markets for beef exports are primarily Asian, such as Japan, China and Hong Kong, and Mexico. Only 1 Kt of beef heads to the EU and 1.3 Kt to the UK, despite the existing trade deals and access to tariff-free quotas. This could be due to the differing standards between the US and UK/EU markets over hormone-treated beef. To reach the standards required in the UK and the EU, significant changes to Canadian beef production methods would need to be made.

Canada imports 130 Kt of beef on average each year, mainly fresh and frozen boneless cuts. The USA is the main supplier, likely due to a long-standing Free Trade Agreement (FTA) and market access, as well as its proximity. Other major sources are New Zealand and Australia, which import an average of 15 Kt and 13 Kt per year (2019–2021), respectively. The EU is also becoming a key supplier of beef to Canada, with imports increasing from 2.75 Kt in 2019 to 12 Kt in 2021.

Table 1. Beef annual production and trade, 2019–2021 average

Source: TDM, Defra and FAO Stat

Table 2. Beef exports

Source: TDM

Table 3. Beef imports

Source: TDM

Sheep meat

Table 4. Sheep annual production and trade, 2019–2021 average

Source: TDM, Defra and FAO Stat

Demand for sheep meat in Canada is relatively low, with per capita consumption of about 0.9 kg. Production is also low – about 17 Kt annually – mainly due to the lack of demand but also because extreme weather conditions and predation by wild animals prevent keeping sheep in many parts of the country.  Despite relatively low levels of consumption, Canada still imports about 24 Kt of sheep meat a year, predominantly from New Zealand and Australia, with a small amount coming from Ireland.

Table 5. Lamb imports

Source: TDM

Pork

Pork is one of the largest agricultural commodity sectors in Canada. There are over 7,500 pig farms that produce more than 2.2 Mt of pork each year. Domestic per capita consumption is high, at 17.15 kg, but over 50% of production is still exported. China is the top market, where 331,000 t are exported annually, closely followed by the USA Japan and Mexico. The majority of Canadian exports are fresh and frozen pork, not processed products such as hams, bacon and sausages. There is a large variation in the export price, depending on the market, and Canada is extremely competitive in China and Mexico. There is currently limited pork trade between the UK and Canada, and between the EU and Canada, despite the FTAs.

Although Canada is a large producer of pork with high exports, there is still about 154 Kt imported on average each year, mainly from the USA and EU.

Table 6. Pork annual production and trade, 2019–2021 average

Source: TDM, Defra and FAO Stat

Table 7. Pork exports

Source: TDM

Table 8. Pork imports

Source: TDM

Dairy

The dairy industry in Canada is relatively large and heavily managed by provincial milk marketing boards, which set the price for domestically produced milk. This varies from province to province, with different prices set for milk destined for different processing outputs. However, all farmers in the same province receive the same price for similar-quality milk. The price is typically reviewed once a year, and adjustments are made based on the cost of production and the consumer price index.

Canada imports a variety of dairy products, but predominantly cheese and butter by value. The biggest supplier is the USA, which exports £171m of dairy products to Canada each year. European countries are among other key dairy product suppliers, with Italy exporting on average £61m annually and France £47m. On average, the UK supplies £16m of dairy products to Canada a year, predominantly cheese products. Canada also imports a large amount of butter each year, with the USA and New Zealand as the main suppliers. A small amount of butter (327t) is imported from the UK at an average value of £1.1m a year.

Like much of Canadian trade, the main market for dairy exports is the USA, which receives £120m of the £277m total. The predominant export by category is skim milk powder. However, not much is exported to the USA. African countries such as Egypt and Algeria are the key markets for this product, but exports are fairly diversified across Asia as well.

Table 9. Cheese annual production and trade, 2019–2021 average

Source: TDM, Defra and FAO Stat

Table 10. Butter annual production and trade, 2019-2021 average

Source: TDM, Defra and FAO Stat

Table 11. Cheese exports

Source: TDM

Table 12. Butter exports

Source: TDM

Table 13. Cheese imports

Source: TDM

Table 14. Butter imports

Source: TDM

Table 15. Canada consumption per capita

Source: OECD