NAFTA Trade Flows General Agriculture and the Food Industry.

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Presentation transcript:

NAFTA Trade Flows General Agriculture and the Food Industry

Objectives - Food Industry Eliminate barriers to trade and facilitate cross-border movement of goods and services. and Increase substantially investment opportunities in their territories.

Commentary - Objectives ä As a result of the NAFTA, the food industry in all 3 countries has had no choice but to find ways to be competitive, now that trade is essentially unrestricted and industry investments can be made on a North American or global basis.

Commentary - Objectives ä The agri-food industry continues to have difficulties adjusting to NAFTA in those sectors where: government has guaranteed something to one or more industry stakeholders; or government continues to regulate a sector. government has guaranteed something to one or more industry stakeholders; or government continues to regulate a sector.

Trade Flows - HVPP ä US high value processed product (HVPP) export shares to both Canada and Mexico increased significantly. ä Mexican HVPP export shares to both Canada and the US increased significantly. ä Canadian HVPP export shares to the US remained constant; to Mexico declined.

Bulk Commodities ä Grains ä Oilseeds ä Cotton & Jute ä Coffee Beans

High-Value Processed Products ä Red meat and poultry meat. ä Dairy products, milk and eggs. ä Processed fruit and vegetables. ä Sugar products. ä Imitation dairy products.

High-Value Processed Products ä Packaged and branded food products. ä Juices. ä Water. ä Beer. ä Wine.

Processed Intermediates ä Live animals and birds. ä Flour and starch. ä Feeds of all types. ä Oils and fats. ä Hides and fur.

Processed Intermediates ä Soya products - vegetarian products. ä Ginseng root - functional foods. ä Enzymes - biotechnologies. ä Extracts/oils - nutraceuticals. ä Wool and hair.

Produce and Horticulture ä Fruits ä Vegetables and potatoes. ä Flowers and plants. ä Nuts and spices. ä Mushrooms.

Related Agriculture ä Fish and shellfish. ä Lumber and wood products. ä Spirits. ä Cigarettes and cigars. ä Wool and cotton yarns.

Food Industry Adjustments ä Consumer Focus ä Value or Supply Chain Relationships ä Marketing Strategies ä Globally Competitive Operations

Consumer-Driven Marketplace ä Price ä Quality ä Variety ä Safety and Health ä Nutrition

Price: Food Expenditure Shares ä Canada - 9.8% ä USA % ä Mexico % ä Japan % ä Australia %

Variety and Availability ä Consumer wants apples, bananas, mango, corn-on-the-cob, available every day. ä Consumer wants access to any product discovered in travel or from a home country. ä Consumers want products as inputs to recipes available on demand - shellfish; lemon grass.

Food Safety ä Most agri-food products historically grown, raised, processed/manufactured and consumed locally. ä Processors, retailers, restaurants, and food service largely purchased local. ä Consumers did not question the food chain re: safety ä Food safety issues/problems were “localized” or, in the case of imports, isolated at the border. ä No longer true today.

Food Value Chain ä Consumer ä Retailer or Food Service ä Wholesale/Distribution ä Processor ä Producer

Marketing Strategies ä Adding value to commodities. ä New food products (e.g., nutraceuticals) ä Certified Products: Organics Angus Beef Specialty Eggs

Marketing Strategies ä Quality Assurance - VQA for wine. ä Farm Processing/Direct Farm Sales ä Complementary Marketing of Products ä Regional Marketing Local identification programs Psychographic profiling

Globally Competitive Operations ä Source product/inputs globally. ä Provide quantity and quality based upon a national or continental market. ä Invest in other North American markets. ä Protect domestic market through marketing strategies, not protectionism.