One industry insider urges exporters not to ignore the United States, while another emphasizes domestic processors
Canadian organic growers should focus on the world’s largest organic market sitting right on their doorstep, says an industry spokesperson.
“The U.S. is the No. 1 organic market in the world. We’re sitting right next to them and we have an excellent trade agreement and we have an equivalency, which is almost full recognition of each other’s standards,” said Tia Loftsgard, executive director of the Canada Organic Trade Association.
Loftsgard told the recent SaskOrganics Conference in Saskatoon that global organic demand continues to grow with sales reaching US$97 billion in 2017. Slightly more than half of that trade is located in North America.
In 2017, the U.S. had the largest market for organic foods in the world at $45 billion.
Despite a decline in the number of farms in the country, the Canadian organic sector continues to record significant growth. Canada’s total organic market (including food and non-food items) has reached $5.4 billion, up from $3.5 billion in 2012, with a compound annual growth rate of 8.7 percent.
The top 10 countries with the largest markets for organic food in 2017 were the United States, Germany, France, China, Italy, Canada, Switzerland, Sweden, United Kingdom and Spain.
Demand from foreign markets remains strong for Canada, which continues to be a world leader of organic wheat, oats, lentils and chickpeas.
“The question is, where do you want to sell? I think that there’s probably a lot more demand and that the people who are settling have a lot more opportunity to choose where they want their products to go.”
Although the United States-Mexico-Canada Agreement has yet to be ratified, she said Canada’s organic industry was largely left untouched except for some changes in conventional and organic dairy.
Besides the U.S., equivalency arrangements are also in place with the European Union, Switzerland, Costa Rica and Japan. Future growth plans include Mexico and South Korea, including Japan expanding into livestock.
“Demand will be coming from Asian markets and European markets, but that will be interesting to really look at selling to our domestic, as well as the American market just to mitigate things like currency fluctuation and distance (transportation) and that there is just such a huge amount of opportunity when it comes to value-added products,” she said.
As head of the membership-based industry association and chair of the data task force, she said it’s critical to have accurate, up-to-date statistics and data to help understand and act on market opportunities.
Laura Telford, Manitoba Agriculture’s organic specialist, said Canada needs to put more effort into expanding the domestic organic food processor market.
“In Canada, we tend to ignore food processing and organic,” she said.
“We have about a billion farmer conferences and we never get past that. But it’s time to, in terms of our evolution, and I see it as being a critical local ingredients driver because food processors want food to be grown right next door. They don’t like transportation … so that’s even better than America.”
Telford is not dismissing the behemoth organic market south of the border, but points out that local food processors tend to be a stable and a high priced market.
“I’ve always said to organic producers, focus on that relationship-based marketing,” she said.
“Don’t go for the fly-by-night intermediaries. Go for people who are going to be there for the long term. And that’s food processors.”
Historically, she said prairie organic products have traded mostly to the U.S., which is not a good long-term strategy.
“During the recession, the market for organic nearly collapsed and we lost a lot of organic producers,” she said.
“Probably 17 percent of the organic farmers left the industry, and we’re still trying to get back to that place before 2008. It was all about just sending really big trucks south of the border full of grains and those buyers had nearly no relationships with organic producers. So when they decided to use that natural claim instead of the organic claim, they didn’t think twice about breaking their contracts with organic producers.”
Learning from that lesson, she said it’s time to focus on homegrown relationships.