A dramatic increase in B.C. food and beverage exports is leading manufacturers to wonder whether food could surpass forestry as B.C.’s biggest manufactured category.
“If you take food and beverage from the Statistics Canada data now, it’s going to be the largest component of manufacturing in the province,” said Marcus Ewert-Johns, B.C. vice-president of Canadian Manufacturers and Exporters.
“It’s going to surpass wood, if wood doesn’t keep booming, related to housing starts or something in the U.S.”
September data from BC Stats shows agriculture and food exports have grown 22.8% year-to-date, while fish exports are up 17.3%. That compares with an 18.4% increase for machinery and equipment, a 4.2% increase for forestry and a 23.4% decrease for energy products such as coal and natural gas.
At 10.7%, food and fish still represent a much lower share of B.C. exports than wood, currently at 23.4% of total exports.
But farmers and food processors say they’ve seen a noticeable increase in production and trade, propelled largely by the low Canadian dollar and the fruition of several long-running trade negotiations that have given them access to markets like China and Korea.
For Albion Fisheries, a Richmond-based fish processor, the boost is mostly about the Canadian dollar, now worth about $0.30 less than the U.S. dollar. Guy Dean, vice-president of export and import at Albion, said exports are up around 12% this year.
The low dollar is allowing the company to compete with U.S. producers to capture market share in that country, but it also gives Albion an edge when exporting to Japan and Europe.
“For the most part everybody works in U.S. dollars, and so it allows us to be competitive,” Dean said.
Processing fish at Richmond's Albion Fisheries | Chung Chow
Blueberry farmers have been increasing production in anticipation of two trade deals: in June 2015, China allowed Canadian producers to export fresh blueberries and cherries to that country, a deal eight years in the making. Canada’s 2014 free trade agreement with South Korea is also expected to benefit blueberry producers.
Because of a lengthy inspection process, blueberry farmers are expecting to start seeing the benefits of the China deal next year.
Debbie Etsell, executive director of the BC Blueberry Council, said free trade deals are important for her sector because tariffs tend to be high for agriculture products as most countries seek to protect their producers. China and South Korea both have a small amount of local blueberry production.
Year-to-date growth in B.C. food, fish and wood exports, September 2015 | Data: BC Stats
B.C. blueberry growers have been increasing production over the past few years: to 152 million pounds from 120 million between 2013 and 2014. An additional five million pounds were produced this year.
However, there is less opportunity to export other field crops from B.C., said Rhonda Driediger, a director of the BC Agriculture Council. It’s difficult to grow enough volume because of B.C.’s limited agricultural land base and high land costs.
Canadian food has international market appeal because it’s viewed as coming from a region with clean land and water and a good safety regime, in contrast to some of the pollution and food scares in China in recent years, Driediger said.
B.C.’s processed food industry is mostly smaller businesses that have created niche products, said James Donaldson, CEO of the BC Food Processors Association.
He believes that will give companies an edge when developing export markets and dealing with the added competition from trade deals like the recently negotiated Trans-Pacific Partnership.
Donaldson added that Canada’s free trade agreement with South Korea has already sparked interest in processed foods from B.C.
With help from B.C.’s Ministry of International Trade, Donaldson’s association has held two annual trade shows that have drawn buyers from Japan, South Korea, China, Singapore, Taiwan and the Philippines.
With the low Canadian dollar, it’s easy for B.C. producers to grab the low-hanging fruit of the familiar U.S. export market, but Donaldson said companies should be thinking about looking farther afield. Asian markets are large and interested in Canadian products.
“The fastest-growing ones are definitely South Korea, China, Taiwan and Malaysia.”