This is Part 1 of a series on Agriculture
The Edmonton region has a long history of excellence in agriculture. Investors looking for a reliable supply of high-quality, sustainably grown inputs for their processing facilities should consider the Edmonton region as the location for their next facility.
The Edmonton region is one of the top agriculture hubs in Canada and is home to some of the world’s largest food companies (Cargill, Bunge, Nutrien, DowDupont, Sofina, Agropur) as well as a large and growing community of home-grown companies that are holding their own internationally (Bee Maid, The Little Potato Company, Aliya’s, Canadian Oats, Champion Pet foods, Heritage Frozen Foods, Kinnikinnick Foods Inc, and many others). So, what about the region is so attractive for companies in the agriculture and food space? This series will explore the many reasons why — starting with the land.
Before I dive into some of the numbers, I wanted to provide a caveat on the data: it is difficult to find data specific to the Edmonton Metropolitan Region. Most data available is at the provincial level. Also, not all relevant data is collected regularly, so in some cases, not all data is as current as I would have liked. As we await more region-focused data, this series will provide a snapshot of what we know today about how the Edmonton region compares to other regions in Canada.
There are over 2.4 million acres of arable land in the Edmonton region— about a quarter the size of the Netherlands. In addition to abundant land, the soil is also very high quality. Quality soils translate into a competitive advantage in yields for dryland crops. For certain crops, Edmonton is a leader in yields per acre — with better yields than other prairie locations without the need for expensive irrigation.
Figure 1. combines data from Statistics Canada (indicated with **) and Agriculture Financial Services Corporation (indicated with *) and shows that farmers in the Edmonton region regularly get more bushels of crop for each acre planted.
Data from Alberta Agriculture reinforces this story, Figure 2 shows that the black soil characteristic of the Edmonton Region on average supports higher yields than other regions for three common prairie crops.
The takeaway? Companies that set up processing facilities in the Edmonton region could benefit from more secure feedstock supplies with shorter supply chains.
Sustainability issues are increasingly important to companies and individuals working in the agriculture sector. Here is another area where the Edmonton region is a leader and another reason investing in the region is likely to have long-term returns.
Take carbon emissions, for example. According to this map published by Agriculture and Agrifood Canada (Figure 3), you can see that the Edmonton region compares well to its Canadian peers in terms of emissions per hectare.
Data from the same document shows that Alberta farmers perform very well compared to their peers regarding greenhouse gas emissions per kilogram of the crop. Figure 4 shows Alberta is either the best or behind only Saskatchewan across several common prairie crops.
One reason that the Edmonton region leads in sustainable agriculture is that farmers in the region have been leaders in managing soil- including the extent to which carbon is retained in the soil. High-carbon soils can have many benefits: increased plant health; lower greenhouse gas emissions associated with agriculture; increased resilience to erosion from water and wind; reduced need for expensive inputs like fertilizers; more attractive to wildlife, and more.
Figure 5 shows that the Edmonton region has the highest soil carbon than anywhere in the province.
Agriculture practice is one key driver of soil carbon; perhaps the most useful thing farmers can do to reduce soil carbon loss is the practice of “no-till” agriculture. Tilling or ploughing the soil has been common since agriculture began, but it has more recently been recognized as one of the biggest contributors to soil degradation. Alberta has been a Canadian leader in the phase-out of tillage – instead using a method of sowing directly into the soil. Figure 6 shows the phase-out of tillage over time. 2011 data from Agriculture Canada shows that no-till agriculture (also known as conservation agriculture) was already ~65% in Alberta. This is compared to the 34% average for North America as a whole in 2019, or 15% globally, according to a 2021 study.
Given the soil quality and the Edmonton region’s agricultural practices, I was surprised to learn that farmland prices remain among the lowest in the country (see Figure 7).
Edmonton Global has identified agriculture as a strategic opportunity for the Edmonton region. The Canadian Prairies are expected to remain an essential source of food exports for decades, and the region is strategically positioned to meet the growing global demand for food and agriculture innovation.