Snap Shot into U.S. Trade with Canada
Trade between the U.S. and Canada has been of great value to both countries for decades. The total trade value between the two countries totaled $662 billion in 2015 (USTR), of that $43 billion belongs to agricultural trade. Additionally, nearly all the main export Ag-commodities have increased dramatically in the last two decades because of the NAFTA. The info graphic at the bottom of this article gives a snapshot into U.S. agricultural trade with Canada with a section on Iowa and Canada Ag trade. There is also a supplementary visual, Figure 1, which displays a historical view at the main agriculture exports to Canada. Between 2013 and 2016 beef exports decreased $418 million, pork decreased $43 million, corn decreased $212 million, and soybeans decreased $174 million. A potential contributing factor in this decline could come from the increasing strength of the U.S. dollar and, therefore, increasing the cost of U.S. ag products for international customers (USDA FAS). Furthermore, another influential factor would be, simply, decreasing prices resulting in lower export values, not necessarily volumes. See both Figure 1 and Figure 2 for this volume and value comparison.
For many of the bulk commodity exports (i.e. corn, soybeans, and pork) Iowa produces large percentages of each, correlating to large allocated shares of U.S. exports of those commodities originating in Iowa. Nearly one-third of U.S. pork production comes from Iowa, followed closely in proportion by corn and soybeans with 18 per cent and 15 per cent respectively (USDA NASS). Included in the corn exports are DDGs and Ethanol exports. Included in soybean exports are soybean meal and soybean oil. These inclusions are represented in Figure 1 as well as in the info graphic.
To understand where the decreases in export commodity values originate, Figure 2 gives insight into the fact that this phenomenon is a function of fluctuating prices of those exported goods, and not decreasing volume per se. The prices have decreased as volume remains steady or increasing, in some years, especially in the pork and beef categories. Figure 2 presents steady or even increases in volume for soybeans and corn. For pork and beef through those years both volumes and values of U.S. exports have a decreasing trend. Additionally, dairy products have had steady increases in both volume and value, and turkey has remained quite steady through the last 20 years.
For a more in depth look at historical U.S. - Canada Agricultural trade click here.
Preston Lyman is a Research Analyst with Decision Innovation Solutions (DIS). DIS is an Iowa-Based economic research firm which provides regular farm economics research and analysis to the Iowa Farm Bureau staff and members.
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