Domestic Markets for Agricultural Products - Deep Dive

Local food products are comprised of harvested vegetables and fish caught from the ocean as well as locally processed foods, like bakery products and seafood products.  Estimating the domestic share of local food market sales requires considering both primary and processed food products.

Statistics Canada’s Supply and Use Tables are the basis for estimating local producers’ share of domestic food markets.  The total supply of each product can be divided between domestic production and imports.  This supply is then used in the economy for industry inputs, consumption by households, or exports.  The challenge with this data source is that it only shows how much of the total supply is processed or consumed locally, and not how much of an industry’s inputs and subsequent consumption of processed food can be attributed to domestic production. 

The value of locally produced and consumed unprocessed foods remained relatively constant between 2013 and 2018. The value of processed foods was decreasing between 2013 and 2016, but has increased in the last two years.  The value of local restaurant meals increased by $15 million in 2018. Note that value changes may not fully reflect changes in the volume of food consumed, as price levels and input substitution may also be factors.

Rising prices may cause consumers to shift consumption away from food products that become more expensive relative to others.  For food items that are less substitutable, rising prices will result in overall expenditure being larger while the volume of food purchased is the same.  Annual food price inflation in Nova Scotia was relatively muted over 2013 and 2014, while it increased to over 4.0 per cent in 2015.

Food prices increased faster than the overall price level that year and was driven by increases in processed beef and pork.  In 2017, food price deflation was 2.0 per cent, reflecting declining prices for processed beef, fresh fruit and vegetables. 

FARM TO TABLE

Agricultural and seafood commodities –  unprocessed harvested items such as fruits and vegetables, eggs, live animals or fishery products – are foods on their own and can be processed into other food items.  In 2018, households consumed $215 million of unprocessed foods, including $172 million of agricultural products and $43 million of fishery products.  Food manufacturers used $926 million of unprocessed agricultural and seafood products. Alcoholic beverage manufacturers used $5.1 million worth of agricultural commodities that year.  Nova Scotia’s exports of agricultural and seafood commodities were dominated by seafood, making up 91 per cent of the $1.43 billion exported in 2017.

In the same year, Nova Scotia also imported $445 million of unprocessed food products.  The Supply and Use tables do not report how much imported food is used for domestic consumption and how much is used for further food processing.  Therefore, it is currently unknown how much of the food being produced in the province is consumed by Nova Scotian households.

Supply and Use of Unprocessed Agricultural and Seafood Commodities in Nova Scotia Basic prices, $,000, 2018

Note that numbers may not total due to the exclusion of inventories.

Supply and Use of Unprocessed Agricultural Commodities in Nova Scotia Basic prices, $,000, 2018

Note that numbers may not total due to the exclusion of inventories.

Supply and Use of Unprocessed Seafood Commodities in Nova Scotia Basic prices, $,000, 2018

Note that numbers may not total due to the exclusion of inventories.

FOOD PROCESSORS

Processed foods make up a larger portion of household food consumption than unprocessed agricultural or seafood products.  In 2018, Nova Scotian households consumed $1.10 billion of processed foods.  In the same year, imports of processed foods totaled $1.55 billion and exports were $1.70 billion.  As with commodities, although total imports of processed foods are known, how those imports are distributed between households and industry is unknown. 

Supply and Use of Processed Foods in Nova Scotia Basic prices, $,000, 2018

Note that numbers may not total due to the exclusion of inventories. Household consumption does not include consumption of non-alcoholic beverages.

It is also unknown how much of local inputs into Nova Scotia food processing were subsequently consumed locally.  For example, the Supply and Use accounts show how much flour is used by bakeries, but not how much of the bakery sector’s use was imported and how much was from local farmers.  This could also vary on a product by product basis.

The food manufacturing sector uses significantly more unprocessed food items than are purchased by local households. The largest industry (by input size) is the seafood product preparation and packaging sector, where over half of the inputs to production are unprocessed products.  A small share of the sector’s unprocessed inputs were imported to the province (9.4 per cent), compared to other industries, like fruit and vegetable preservation, where about two-thirds of the sector’s unprocessed inputs (fresh fruits and nuts) are imported. 

Inputs to food manufacturing industries in Nova Scotia Basic prices, $,000 (import share of inputs, %), 2018

Not shown: Sugar and confectionary manufacturing and soft drink and ice manufacturing.

RESTAURANT MEALS AND ALCOHOL

In 2018, Nova Scotia’s households consumed $1.30 billion of prepared meals.  Domestic production of prepared meals totaled $1.83 billion in 2018, with $237 million of imports.  As with locally-processed foods, it is unclear how much local content (unprocessed or processed) makes up each prepared restaurant meal, on average.

In the same year, Nova Scotian households purchased $185 million in alcoholic beverages for immediate consumption (i.e., at restaurants or bars). Domestic production increased to $220 million and imports were $62 million.   From this information, it is unknown how much of domestic or imported products were purchased by Nova Scotian households.  Note that alcoholic beverages are not included in the headline indicator.

Supply and Use of Prepared Meals and Beverages in Nova Scotia, Basic prices, $,000, 2018

Note that numbers may not total due to the exclusion of inventories.

Restaurants and bars used $45 million of unprocessed agricultural and seafood products and $332 million of processed food products in 2018. Inputs with a high import share include fresh fruits and vegetables and processed meat products (including beef and pork). 

Inputs to Food Services and Drinking Places in Nova Scotia, Basic prices, $,000 (import share of inputs, %), 2018

Domestic production of beer, wine and spirits was $209 million in 2018 while imports totaled $245 million.  Households consumed $192 million and another $170 million was exported.  From this information, it is unknown how much local alcohol is purchased by local consumers.

Supply and Use of Alcoholic Beverages in Nova Scotia Basic prices, $,000, 2018

Alcoholic beverages include beer, wine and brandy, and distilled liquor. Note that numbers may not total due to the exclusion of inventories.

Breweries and wineries and distilleries require inputs with a high import share in Nova Scotia, including fresh fruits and fruit juices for wineries and grain products for breweries.

Inputs to Alcohol Manufacturing in Nova Scotia Basic prices, $,000 (import share of inputs, %), 2018

Notes:

• Agricultural commodities include oilseeds (except canola), grains (except wheat), fresh potatoes, fresh fruits and nuts, other miscellaneous crop products, fresh vegetables (except potatoes), cattle and calves, unprocessed fluid milk, hogs, eggs in shell, poultry, and other live animals.  Seafood commodities include fish, crustaceans, shellfish and other fishery products. Animal or pet food is not included.
• Processed food products include flour and other grain mill products, fresh, frozen and canned fruit and vegetable juice, preserved fruit and vegetables and frozen foods, processed fluid milk and milk products, cheese and cheese products, butter and dry and canned dairy products, ice cream, sherbet and similar frozen desserts, fresh and frozen beef and veal, fresh and frozen pork, fresh and frozen poultry of all types, processed meat products, other miscellaneous meats and animal by-products, prepared and packaged seafood products, bread, rolls and flatbreads, cookies, crackers and baked sweet goods, snack food products, and other food products, n.e.c..  Import heavy products including margarine and cooking oils, breakfast cereal and other cereal products, grain and oilseed products, sugar and sugar mill by-products, chocolate and confectionary products, flour mixes, dough and dry pasta, coffee and tea, and flavouring syrups, seasonings and dressings are not included.
• Alcoholic beverages include beer, wine and brandy and distilled liquor.
• Food manufacturing sectors include animal food, grain and oilseed milling, sugar and confectionary product manufacturing, fruit and vegetable preserving and specialty food manufacturing, dairy product manufacturing, meat product manufacturing, seafood product preparation and packaging, bakeries and tortilla manufacturing, soft drink and ice manufacturing and other food manufacturing.

Changes to the indicator, baseline, or target:

• As there was no data available on local food consumption, a methodology was developed for estimating the value of local food consumed by households.
• We were unable to replicate the baseline number of $230 million quoted in the OneNS Report by any measure of local food.
• As the estimated value of local food consumed was not similar to the original baseline, a new target was adopted. A levels target was adopted instead of the original target of doubling the baseline. In keeping with the spirit of the original goal, an increase of $230 million was adopted as the target.