Grain Milling in Canada: Industry Profile

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Definition

The information contained in this section is drawn from a number of sources, including Statistics Canada and sector analysis available on the Industry Canada web site, Strategis.  Cereal grain milling is included within the North American Industry Classification System within NAICS 311211 – Flour Milling.  This classification includes all food “milling” activities and the production of bakery mixes (cake, biscuit, muffin, doughnut) and dough preparations.


Structure

According to the Strategis profile, there were 98 establishments in Canada that fell within this industrial classification.  Of these, 48 are wheat milling establishments.  An additional 7 are industrial scale oat milling establishments. The remainder are primarily specialized milling (commodities other than the primary cereal grains, wheat, oats, barley and corn that include dried fruits and vegetables, pulses and other specialty crops) and further processing establishments that are in the bakery mix and dough preparation business. A number of bakery mix establishments are co-located with wheat milling facilities.

The geographic distribution of this industry classification in total (98 establishments) is national, as follows:

Province

All Establishments

Wheat Mills

Oat Mills

British Columbia

10

4

0

Alberta

11

7

2

Saskatchewan

8

6

3

Manitoba

9

5

1

Ontario

26

18

1

Quebec

31

6

0

New Brunswick

1

1

0

Nova Scotia

2

1

0

Total

98

48

7


Shipments

Canadian wheat mills process approximately 3.1 million tonnes of Canadian wheat annually, of which, approximately 75% is produced in western Canada.  The majority of eastern Canadian wheat processed is grown in Ontario, but milling wheat is also produced in Quebec and Atlantic provinces.

Total flour and other milled wheat products destined for human consumption are about 2.4 million tonnes annually.  The balance of production is sold as “millfeeds” (by-product) destined for manufacturing of animal feeds and pet foods.  Small quantities of wheat flour are used for non-food industrial further processing.

Canadian oat mills process approximately 600,000 tonnes of milling quality oats annually.  This Canadian sub-sector relies heavily on the United States market and holds a disproportionate share of total North American oat milling capacity, having expanded considerably in the past 15 years.


Employment

The Canadian cereal grain milling industry employs approximately 1,400 production workers and an additional 500 persons in other capacities.

Investment

The milling industry has undergone extensive modernization and significant capacity expansion between the mid1990s and 2010.  The capacity expansion has been market-driven, closely tracking population growth.  Current replacement cost of all wheat and oat milling establishments is estimated to be between $1.5 billion and $2.0 billion.

Value of Shipments and Value-added

The value of industry shipments from year to year is largely dependent upon the prevailing North American market values of cereal grains.  In recent years, the value of industry shipments has been approximately $1.2 billion, of which value added has accounted for approximately $250 to $300 million.

International Trade Performance

The Canadian cereal grain milling industry operates within and enjoys the competitive advantage of the North American Free Trade Agreement.  There is considerable bilateral trade in grains, milled grain products and further processed grain based foods such as bakery products, breakfast cereals, and bakery mixes.  This volume of two-way trade increased gradually but steadily for over a decade after the provisions of NAFTA came into effect.  The balance of trade has varied.

NAFTA has led to regional and North American product mandating of milling and further processing facilities.

Milling industry export performance to export markets has been modest, notwithstanding Canada’s reputation as a supplier of high quality grains and grain products.  Most developed countries have sufficient milling industry infrastructure to be essentially self-sufficient in milled grain products with some export capability.  Regional proximity of these competitors to less developed economies has historically conferred a competitive advantage that has been difficult for Canadian milling firms to overcome, particularly taking into account changes in transportation and port infrastructure in some markets. Despite these competitive challenges, the Canadian grain milling industry ships products to 30 or more export markets annually.  For more detailed trade statistics, click here.