Canada accounts for 20 percent of international pork exports to 130 countries — earning $3.7 billion in revenue.
The price Canadian hog producers get for their product depends largely upon the American market, but plans are afoot to develop a Canadian price for a Canadian product for Canadian consumers.
Alberta Pork chair Frank Novak, who also sits on the Canadian Pork Council executive, said such a plan would involve pricing based on the pork cutout, which would require a system of mandatory price reporting similar to that in the United States.
“We’re talking about trying to figure out a way to isolate ourselves from some of that U.S. activity, so that we’re not directly affected every time there’s a strike in the U.S. or directly affected by something else,” Novak told Lethbridge area pork producers May 28.
“The kind of model we’re talking about right now is really pricing our pigs out of the meat that is produced from our pigs, pricing off the cutout.”
Such a plan would need to be accepted by the entire pork value chain, from producers to processors through to retailers and consumers. Meetings have been held to discuss the idea, and Novak said a substantial number of producers think it is worth pursuing.
“This isn’t something that’s never been done before. There’s already a certain percentage of pigs in the U.S. that are priced exactly this way,” said Novak in a later interview.
“Every day, there’s a report that comes out that says out of all these thousands of car loads of pork that were sold, here’s how it all translates down to the value of a carcass.”
Payments can then be made based on a certain percentage of that carcass value.
Novak acknowledged that such a system would be a significant change, but it could also wrest some market share from American producers who sell pork into Canada.
“It would be really nice if we could find some way to sort of isolate ourselves at least a little bit from some of the craziness that goes in other places that comes directly home to us because of the way we price our pigs here.”
Discussions are in the early stages. Mandatory price reporting would require federal legislation to implement.