Canada - the host of the just-concluded third round of talks on the North American Free Trade Agreement (NAFTA) - is a top trading partner for U.S. feed grains and co-products like ethanol and distiller’s dried grains with solubles (DDGS) thanks to geography and strong trade policy.
Economically and technologically, Canada and the United States developed in parallel across the world’s longest international border. Following its implementation, NAFTA's terms dramatically increased trade and economic integration between the two countries, with Canadian livestock producers able to access U.S. feed grains and co-products competitively due to close proximity to northern U.S. ethanol plants as well as the efficiency of transporting by rail or truck.
Since NAFTA entered into force in 1994, exports of corn in all forms to Canada have increased 2.5 times, including a six-fold increase in corn exports, an almost 10-fold increase for DDGS and corn gluten feed/meal and a 90-fold increase for ethanol.
Canada currently ranks as the seventh largest market for U.S. DDGS this marketing year with more than 607,000 tons of U.S. DDGS purchased (Sept. 2016-July 2017), a 20 percent increase year-over-year.
And Canada imports close to 20 percent of its domestic fuel ethanol, nearly all of it from the United States. As a result, Canada has consistently ranked as a top importer of U.S. ethanol, coming in as the second largest buyer in 2016/2017. U.S. ethanol imports of 301 million gallons (2.73 million tons or 107.5 million bushels in corn equivalent) thus far this marketing year are up eight percent compared to the same period the year prior.
Learn about the U.S. Grains Council’s work in Canada here.