Opportunities in the Agrifoods Sector
Overview
The Northeast Alberta region is deeply rooted in agriculture from the Ukrainian pioneers, who first settled north of present-day Lamont to the Barr Colonists in the Kitscoty area. With over 5,100 farms, the Alberta HUB region holds 10% of the province’s farms, which produces over 10% of the province’s cattle, 12% of the province’s bison and 15% of the province’s elk. The Alberta HUB region is home to Lakeland College with one of the largest college-operated farms in Canada located at the Vermilion Campus.
The Alberta HUB Region had total farm receipts of $978 million in 2010, accounting for 8.5% of Alberta’s farm receipts. In 2011, there were 5,160 farms in the region with a total of 5.6 million acres or 11% of Alberta’s total farm acreage. Average farm size was 1,118 acres.
The region accounted for 9.3% of the Alberta’s total value of on-farm livestock and poultry with an approximate market value of $393 million in 2011. The total number of cattle and calves was 520,519- almost all of them beef cattle. The North East region’s share of Alberta’s total number of cattle and calves was 10%, hogs 2% and of hens & chickens 2.7%.
Cropland acreage totalled about 2.8 million acres or 11.6% of Alberta’s cropland. The region’s major crops include canola, barley, oats spring wheat, alfalfa and hay. The region is the province’s second largest producer of alfalfa, accounting for 14.2% of the Alberta’s alfalfa acreage. The HUB region is also the third largest producer of barley, oats, mixed grains and fruits & berries.
Between 2006 & 2011 the number of farms in the region fell by 11% and the number of farm operators by 13.3%. The average farm size increased from 983 acres in to 2006 to 1,106 in 2011- which is just below the Alberta wide average of 1,168 acres. Total farm receipts rose 20.5% between 2005 and 2010, higher than Alberta’s increase of 156% over the same period. The value of on-farm livestock and poultry declined by 19.6% between Many 2006 and May 2011.
The acreage that is dedicated to canola jumped 27% between 2006 & 2011, making canola the number one crop in the region on an acreage basis. Wheat acreage rose 14.7%, but most other crops had declines in acreage.
The large 25.5% decline was registered for the number of cattle and calves between 2006 & 2011- as calves, heifers, steers/bulls and beef cows all registered declines of more than 20%. The number of pigs fell by an estimated 50% and the number of hens & chickens by 16.4%.
Agrifoods Sector Priorities
Value Added Focus
A recent study by Outlook Market Research noted a number of interviewees pointed to the need for more value added agriculture in the region. There is a common feeling among many economists that the agri-food industry will be a driving force in Alberta’s economy for the next century.
Value added is primarily a concept that refers to adding value to a primary agricultural product by changing its nature through additional processing operations. Transforming wheat into bread or grapes into wine are examples of this process.
The value added concept can also be applied to a primary agricultural product by increasing its intrinsic value. For example, a product that meets organic production standards or is naturally grown can be perceived by customers as having value in excess of that grown in a conventional manner. It is clear then that, if intrinsic and processing value can be combined in a single product, it is possible to significantly increase that proportion of the final consumer price that accrues to the primary producer.
Bio-Products
The government of Alberta has invested tens of millions of dollars in various bio-initiatives in recent years. The Outlook research team was able to interview several specialists in this area who feel that there is great opportunity for the Northeast Alberta region, as a strong agriculture sector, to take advantage of new programs, facilities and funding opportunities.
Here is an overview of major bio-product sub-sectors that are being actively supported by the Government of Alberta:
Bio-Chemicals
A comprehensive effort by Alberta’s Bio-Industrial Opportunities Team is finding innovative ways to develop and commercialize new-generation chemicals through the bio-refining of crops and forest resources. The role of petroleum in chemical applications is well-established, technically proven and economically viable. In the long run, however, using biomass as feedstock for chemicals makes sense.
Alberta farmers will have a new, high-value market for their crops. Novel crop varieties, tailor-made for biochemistry, will encourage this evolution. Rural economies will benefit when bio-refining facilities set up shop, with many being locally owned. By addressing the biochemical opportunity, Alberta is turning its competitive feedstock advantage into a new renewable industry.
Alberta’s Bio-Industrial Opportunities Team is working to stimulate growth of a globally competitive bio-based chemicals industry in the province. This work spans primary research, technical development and commercialization, with a goal of attracting new entrants and significant private investment, across two project areas: Industrial Organic Chemicals and Specialty Cosmetic Ingredients.
Industrial Organic Chemicals: The possibilities in the Industrial organic chemicals category include bioplastics, polymers, coatings, insulation, as well as, a whole array of high performance chemicals that can only be derived from plants.
Alberta is putting its expertise behind crops its producers grow, for example, canola and triticale.
Specialty Cosmetic Ingredients: By one estimate, the world market for organic and natural personal care products will hit $12 billion in 2020. Within Alberta’s bio-based chemicals initiative, a dedicated project team is pursuing this market by demonstrating to global ingredient manufacturers that high-value, safe, functional, bio-active ingredients can be extracted economically from plants grown in Alberta.
Bio-Materials
In terms of their environmental impact, most of us take aim at the fossil fuels used to heat our buildings and fuel our vehicles. What is often overlooked is the role of petroleum products in constructing those buildings and manufacturing those vehicles in the first place. From insulated wall panels to furniture to automotive bodies and interior components, these products are often made with materials derived from petroleum.
The adoption of plant-based biomaterials in construction and manufacturing offers significant environmental benefits. Unlike a non-renewable resource like petroleum, the plant feedstock of biomaterials is renewable and sustainable. Bio-based materials could also improve air quality in buildings, compared to potentially gas-emitting synthetics. Alberta agriculture will benefit as well.
Current biomaterial feedstocks such as flax, hemp, and cereals grow well in the province, as well as other high-potential feedstocks like canola straw and pea straw. As demand for these crops increases, so in time will the value that farmers receive for growing them to rigorous standards of quality. Rural communities also stand to gain, as biomaterials processing facilities are established close to where their feedstock grows.