Supply chains secured and reimagined

The Americans are crunching our cucumbers – the numbers, not the vegetables. The U.S. International Trade Commission (USITC) recently heard an array of American, Mexican and Canadian experts who analyzed the flow of cucumbers and squash being imported into the U.S. Squash may not be a sizeable Canadian export, but cucumbers are.


The Ontario greenhouse cucumber crop had a farmgate value of $339 million in 2020, with just over half exported outside of the province, much of it to the United States.


 “I’ve never had a fear that greenhouse-grown cucumbers were being sold for less than slicers,” comments Dino DiLaudo, vice-president sales and marketing for Westmoreland Sales, referring to field-grown cukes. “Our long English cucumbers and mini seedless cucumbers have a strong market.”


In fact, the Westmoreland Sales Group is so confident of their Canadian cucumber market that they have added 25 acres of new greenhouse construction in Leamington, Ontario with new plantings for June. The Westmoreland Topline greenhouse grower is less exposed to the U.S. market, with about 25 per cent of production sold to American customers.


This is not the case for other greenhouse growers, however, which is why the Ontario Greenhouse Vegetable Growers (OGVG) had Glen Snoek, its marketing and economic policy analyst presenting testimony at the virtual USITC on April 8.  For starters, it’s important to note that the Canadian cucumber market subdivides into greenhouse-grown, field-grown and pickling markets. 


As Snoek explained, “Canadian greenhouse production does not generally interfere with the most important harvest periods for Georgia and Florida and generally complements them. Canadian seedless cucumbers are very different from American field cucumbers and command a higher price in retail stores. Seedless cucumbers offer a different consumer experience and have dramatically expanded the snack category, beyond a salad or meal ingredient. Long English seedless and mini-cucumbers are not a direct substitute for American field-grown cucumbers.” 


Representing the field cohort, Ron Van Damme, vice-chair, Ontario Processing Vegetable Growers, explained that Canada is an important element of a North American pickle-production value chain. “Our raw cucumbers are processed by American factories and sent back to Canada for sale,” said Van Damme. 


Further testimony was provided by Andre Solymosi, general manager, British Columbia Vegetable Marketing Commission and Jocelyn Gibouleau, president of Québec-based Les Productions Margiric Inc. The Canadian contingent was led overall by Mathieu Boucher, deputy director of Agriculture Canada’s horticulture division. An important factor regarding the hearing was that the Commission was not investigating unfair trade practices, but only mandated to report back on the impact of imports on U.S. growers and supply chains. 


Testimony was heard from more than 30 witnesses including the Florida Agriculture Commissioner and the Fresh Produce Association of the Americas.  The hearing’s report is expected to be tabled by no later than December 7, 2021. 


Interestingly, these fact-finding investigations were already underway when President Joe Biden issued an executive order on February 24, 2021 to evaluate current and future risks to America’s supply chains. Despite the global war against COVID-19 raging on, the United States remains focussed on gathering intelligence on the strength of its union – and that of its critical partners. 


Embedded in the president’s direction to his cabinet secretaries, including agriculture secretary Tom Vilsack, is the request to examine if allies and partners are also identifying and prioritizing the flow of critical goods and materials. The scope is to target risks beyond pandemic and other biological threats to include impacts from climate change and geopolitical and economic competition. 


 “When this executive order was published we said, ‘Yikes, what is this?’” says Al Mussell, research lead for Agri-Food Economic Systems, Guelph, Ontario.


“I don’t think this is innocuous at all. Protectionism plays about equally well with Trump Republicans and AOC Democrats,” referring to the left-leaning New York congresswoman Alexandria Ocasio-Cortez and her following. 


U.S. agriculture secretary Tom Vilsack has asked for reporting by May 21 regarding his department’s efforts to improve and reimagine supply chains. He specifically wants to “identify food system, supply-chain bottlenecks and vulnerabilities that may provide insights into the competitive and fair markets landscape.”


There is no doubt the global pandemic has challenged pre-existing assumptions about how food is produced and distributed, so it’s not surprising that a SWOT analysis – strengths, weaknesses, opportunities and threats -- is underway to protect U.S. national interests.


“This is prudent management,” says Al Mussell. “What is more troubling is the billions of ad hoc payments to farms which are becoming routine, first to compensate for Chinese levies on American produce, then for COVID recovery. For Canadians, it takes very detailed economic analysis to track the impacts.” 


Joe Sbrocchi, OGVG general manager, points out that trade is a national issue affecting all Canadian product shipped into the United States. Accordingly, Canada’s response to these U.S. trade investigations is being coordinated through the Canadian Horticultural Council as well as Agriculture and Agri-Food Canada and Global Affairs Canada.


“It seems to me that through this lens of exploring the supply chains that feed Americans, the United States will see a strength provided in the trading block that the USMCA brings to the table,” says Sbrocchi. 


That governments are now ‘woke’ to food sovereignty should come as no surprise to Canadian growers. What will be a shock, however, is if grower associations don’t have the resources to deploy against trade protectionism when COVID has all but emptied their cupboard.

Karen Davdison, editor of The Grower, goes "Behind The Scenes" of this story and speaks with Al Mussell, research lead, Agri-Food Economic Systems. They discuss the security and strength of supply chains, spurred by the global pandemic, climate change and geopolitical shifts. Listen to the podcast here >>

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Monday, April 26, 2021

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