NAFTA snack: Why free trade is vital to food production
NAFTA snack
Free trade is vital to food production. As North America’s economy has become more integrated, so too have the supply chains that put food on store shelves. One example is found inside a bag of snack mix, full of cereal and cheese bits. This is the cross-border journey of one component – a cereal hoop, like the one shown above – as it evolves from field crop to savoury snack.
Product starts in Canada
Corn is Ontario’s second-biggest crop by acreage and Canada’s third most-valuable crop by sales. But it’s not the sweet kind you eat with butter in the summer. Known as grain corn, maize or dent corn, it is high in starch, low in sugar, and used in everything from pig feed to ethanol. After harvest, the Ontario farmer trucks his corn to a grain company’s elevator in the southwestern part of the province.
The United States is the world’s biggest grower of corn, but supplements domestic supplies with imports. The Ontario corn is moved by train or truck to a U.S. mill in Illinois, Idaho or elsewhere. The corn is dry milled into flour for food production.
The corn flour is sent to an Ontario food processor, where it is baked and puffed into cereal hoops, the familiar shape found in many popular snacks. Most of Ontario’s corn mills have closed, and the large ones in the U.S. have come to dominate much of the North American industry.
The corn, now in the form of cereal hoops, makes its third tariff-free trip across the Canada-U.S. border. The cereal hoops are shipped to a U.S. food processing factory, where they are spiced and combined with other cereal pieces and salty bits, bagged and boxed for retailers.
The snack mix makes its way across the border for a fourth time, to warehouses and grocery stores. Free trade’s main features – tariff elimination, regulatory harmonization and streamlined border clearances – have helped food and agricultural producers adopt just-in-time delivery schedules that are key to fresh goods and efficient production.
