Ontario’s Agri-Food Sector

D R A F T

February 2008

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Table of Contents

1. Ontario Agri-food sector overview

2. Focus on the Horticulture Sector

3. New and Emerging Opportunities

4. Mission to Chile

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Ontario Agri-food Sector Overview

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Ontario Agri-Food Overview• Sector includes the entire value chain from field to fork

• Sector is notable for its diversity

– more than 200 different commodities produced

– sugar/confectionary products, baked goods and meat products accounted for almost half of the $6.5 B in food processing exports (2006)

• Significant contributor to the economy

– sales over $30 billion and 700,000 jobs

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Ontario - Well Positioned in the North American Market

Source: Source: U.S. Census Bureau, 2006 (3/2007)http://www.2ontario.com/welcome/oomp_401.asp

135 million consumers

within a day’s drive of Toronto

(representing 44% of U.S. population)

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Selected Economic Indicators, 2006

• 10.6 % = Ontario agri-food goods as % of Ontario’s GDP from all goods-producing industries

• 45.4 % = Ontario GDP from food, beverages and tobacco as % of Canada’s GDP from same

• 23.6 % = Ontario agriculture as % of Canada’s GDP from

agriculture

• $8.93 billion (CDN) = Total Farm Cash Receipts

• Agri-food Trade:

• Imports $13.46(billion $CDN)

• Exports $8.59 (billion $CDN)

• 11.5 % = Employment in agri-food as % of Ontario’s total

employment

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Ontario’s Agri-food Trade by Region/Country

Region Exports Imports Balance

United States 3,583,707 4,844,631 -1,260,924

Asia (excl. Japan) 318,506 503,301 -184,795

EU 199,462 634,577 -435,116

Mexico 155,082 442,416 -287,334

Japan 100,510 13,843 86,668

Other 208,985 1,062,718 -853,733

Total 4,566,253 7,501,486 -2,935,233

January – July 2007($CAN'000)

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The Changing Ontario Farm

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Census of Agriculture 2006 2001 Total Land Area (millions of acres) 13.31 13.51

Average Farm Size (acres) 233 226

Ownership

Sole proprietorship

Family corporation

Non-family corporation

Partnerships

Other

31,755

7,538

733

34,933

54

33,675

6,670

605

48,321

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Total # Farm Operators 82,410 85,015

Female Farm Operators (%) 28.6 26.8

Average Age of Farm Operators (years)

- compared to average age of Cdn farm operators

- compared to average age of Ontarians:

52.6

52.0

39.0

50.7

49.9

37.2

Operators with Off-Farm Income (%) 49.6 45.5

Farm Capital (billions of $) 65.3 50.5

Total gross farm receipts (billions of $) 10.3 14.5

www.ars.usda.gov/is/graphics/photos/

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Farm Cash Receipts Selected Commodities, 2006

Commodity

$ million 2006

% in 2006

% in 2002

Livestock (excluding Poultry & Dairy) 1,990.9 22.3 21.6

Dairy Products 1,990.9 17.8 17.7

Grains and Oilseeds 1,295.4 14.5 14.9

Fruit and Vegetables 1,140.2 12.8 11.8

Floriculture and Nursery 987.1 11.1 11.7

Poultry and Eggs 847.1 9.5 10.0

Tobacco 178.4 2.0 2.5

Maple Products 11.0 0.12 0.13

Other 886.0 9.9 9.6

Total Receipts 8,927.0 100 100

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Focus on the Horticulture Sector

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The Horticulture and Greenhouse Industry

Horticulture:• Horticulture is a $2B farm gate ($1B fruit and vegetables, $1B

floriculture/nursery)• Ontario Horticulture industry represents over 40% of national horticulture crop

production.

Greenhouse Industry:• Ontario Greenhouse Industry = 1000 hectares• $1.1 Billion farm gate sales (flowers and vegetables)• $4 billion of additional industrial output and labour income province-wide• 51% of Canada’s greenhouse production in Ontario• #1 production of greenhouse vegetables and #3 of greenhouse flowers in North

America• Significant reliance on exports to U.S. – High Can $ a big concern• Energy and labour highest input costs

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Grape & Wine Industry

• Over 60 wineries and 15,000 acres of grape

• Represents more than 80% of Ontario’s $215 million industry

• Significant contribution to Niagara tourism

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Horticulture Sector Issues• Emerging Pests• Pesticide Issues (reduced-risk, minor use, data requirements, alternative

fumigants, spray drift, pesticide by-laws, product re-evaluation and formulation changes)

• Food Quality (Optimum quality for consumer, Need to identify Health benefits, Organic guidelines)

• Post Harvest• Market Access• Winter Injury/Salt Damage• Land Use• Legislation – Clean Water Act• Water and waste management• Labour • Wildlife Damage• Food Safety and Traceability• Energy – increased heating, transportation, fertilizer, plastic costs• Research funding –decreased support for production and IPM, increased need

for new crop research• Genetics: lack of control over germplasm, lack of new varieties being developed,

importation of seed from China and GM0’s

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Area, Production and Farm Value of Selected Commercial Fruit Crops, Ontario, 2006

Crop (top 12 by production)

Area Harvested(hectares)

Average Price($/tonne)

Farm Value($,000)

1) Apples 6,758 377.00 60,809

2) Grapes (all) 7,017 1,094.60 74,283

3) Peaches 2,007 1,196.20 26,181

4) Melons (all) 482 448.20 6,200

5) Pears 708 809.40 6,665

6) Strawberries 1,008 2,933.10 15,300

7) Sour Cherries 832 521.60 1,527

8) Nectarines 223 1,433.00 3,900

9) Plums & Prunes 344 1,719.60 3,900

10) Sweet Cherries 324 2,391.90 3,845

11) Blueberries (all) 166 4,467.30 3,080

12) Raspberries 312 5,394.60 3,230

References: tatistics Canada: Fruit and Vegetable Survey; OMAFRA: Apple Marketing Survey; Ontario Tender Fruit Producers' Marketing Board; Grape Growers of Ontario

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Area, Production and Farm Value of Selected Commercial Vegetable Crops, Ontario, 2006

Crop (top 12 by production)

Area Harvested(hectares)

Average Price($/tonne)

Farm Value($,000)

1) Potatoes 14,600 n/a n/a

2) Garlic 87 3,873.00 650

3) Leeks 61 1,289.80 1,410

4) Lettuce, Greenhouse

n/a 1,504.30 2,000

5) Carrots, Baby 283 1,322.80 1,800

6) Parsnips 97 412.70 730

7) Spinach 376 1,202.50 2,400

8) Asparagus 1,093 2,762.90 9,650

9) Cabbage, Chinese

688 983.60 5,800

10) Beets 425 226.50 1,500

11) Broccoli 1,305 1,181.50 9,950

12) Cauliflower 668 632.50 6,900

References: tatistics Canada: Fruit and Vegetable Survey; OMAFRA: Apple Marketing Survey; Ontario Tender Fruit Producers' Marketing Board; Grape Growers of Ontario

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New and Emerging Opportunities

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Agri-Food: More than Agriculture + Food

• More than just primary production

• Sector increasingly shifting to value-added products to capture niche markets

• Pursuit of innovative production methods/products allows sector to maintain economic strength

• Continued development of technologies and expertise to address emerging challenges and opportunities

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Opportunities for Agri-Food

• Energy• Environment• Consumer Trends• Science and Innovation

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Opportunity: Energy• Three categories of renewable energy associated with the agri-food

sector:• Biofuels - derived from starchy crops • Biomass - living and recently dead biological material used as fuel or

industrial production• Other renewable sources – eg. solar, wind, anaerobic digesters

www.sgaenergy.com

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Opportunity: Environment

• Environmental Farm Management – optimize outputs; minimize inputs and environmental impacts

• Air – reduction of effects on air quality

• Climate Change - potential to provide a net reduction in atmospheric CO2

• Soil – practices to guard against soil degradation and loss

• Biodiversity – safeguard existing natural/semi-natural habitats

• Water – methods to maintain quality/quantity of supply

To be sustainable, agricultural systems must be compatible with natural systems and processes:

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Opportunity: Consumer Trends

Adaptation / adjustments to meet changingconsumer preferences:

• Convenience• Awareness of food origins• Formulated for children• Fresh produce• Functional foods• Lifestyle foods• Organics• Portion Control• Upscale / gourmet foods

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Opportunity: Science & Innovation

Agricultural research (to date) that influences agri-food production & processing:

• biotechnology

• market development

• novel technologies

• processing technology

• production systems

• technology transfer

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Example: Auto-parts Sector

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Example: Construction Sector

Biocomposite bridge was installed at the University of Guelph Arboretum, donated by PSA Composites LLC

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Mission to Chile

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Mission VisionMission Vision:

• A research project has been funded by the federal and provincial ministries of agriculture in collaboration with producer associations to carry out this analysis and to develop of a long term strategic plan for the industry. This work will be informed by best practices from jurisdictions that have well-developed horticultural sectors.

• The following jurisdictions have been identified for the data-gathering phase of the project: Australia, California, Chile, Denmark, Holland, and New Zealand.

• Mission teams will visit these countries and meet with industry, academia, and government officials to discuss best practices for the horticultural sector in research, innovation and commercialization and government support.

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Mission Funding Partners and Mission Team

Mission Funding Partners:• Agriculture and Agri-food Canada• Ontario Ministry of Agriculture, Food and Rural Affairs• Horticulture producer associations

Mission Team:• Dr. Frank Ingratta, former Deputy Minister of the Ontario Ministry of

Agriculture, Food and Rural Affairs, Principal Investigator of the project.• Ms. Brenda Lammens, President of the Ontario Fruit and Vegetable

Growers Association (OFVGA). This 7500 member organization is responsible for advocating for industry needs.

• Ms. Kate Steflemeyer, Research Associate with the George Morris Centre, Canada's leading agricultural think- tank.

• Dr. Maurice Bitran, former Director of Research and Innovation at the Ontario Ministry of Agriculture, Food and Rural Affairs, the Ontario Ethanol Growth Fund, and the Ontario Research and Development Challenge Fund.

Websites

Ontario Fruit and Vegetable Growers Association

http://www.ofvga.org/

Ontario Ministry of Agriculture, Food and Rural Affairs: http://www.omafra.gov.on.ca

George Morris Centre

http://www.georgemorris.org

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