Canada’s Food Industry: Industrial Outlook, Summer 2005

Canada’s Food Industry forecasts revenue, costs and profits for the food industry by analyzing the outlook for meat, dairy and seafood products, as well as fruit and vegetable processing, sugar and confectionery products, bakery and tortilla production, grain and oilseed milling, and animal feed manufacturing.

After enjoying robust growth in the first half of 2004, Canada’s food manufacturing industry has suffered a marked slowdown. One of the main reasons is the end of the rebound enjoyed by meat processors after the U.S. export ban on beef products due to mad cow disease was lifted. Also, the strong loonie is detracting from export growth and making imports less expensive.

Rising input prices mean cost growth is outpacing revenue growth, so profits will fall off somewhat to $2.6 billion this year and $2.5 billion in 2006. In the medium term, dollar profits will grow by 4.7 per cent per year on average, allowing them to surpass their 2004 peak by 2009.

The outlook includes an update on how the mad cow crisis is affecting meat processors, as well as a special feature on the effect of private label brands on the food manufacturing industry.