Analyst warns of long-term damage of PED, COOL

Hog shortages | Economist says effects of disease and policy will hurt consumer demand

High prices for Manitoba weanlings are just one of the unintended consequences of country-of-origin labelling (COOL) for American farmers, says economist Al Mussell.

But a general shrinking of demand for pork is the long-term consequence that helps nobody in the North American hog industry, including those who pushed for COOL.

“Markets continue to adjust. What’s the long-term implication of this (sort of law?) It’s somewhat predictable,” said Mussell, a George Morris Centre researcher.

“They’re short of pigs because of (porcine epidemic diarrhea virus), and we haven’t got as many to sell because of COOL.”

PED has killed millions of piglets just at the time when they are most needed by American farmers. Pig and pork prices have been at all-time record highs in the last year and farmers would like to produce as many as possible.

But Canada, a major source of high-health weanlings for U.S. farmers, has seen weanling production slump in the years since COOL made many U.S. farmers unwilling to buy Canadian pigs.

Some Canadian sow operations failed when they lost that market. Others converted their operations to serve the Canadian market.

The sharp decline in Canadian production has combined with PEDv losses to make quality piglets hard to find, and that is pushing pork prices higher.

Mussell said proponents of COOL should learn from this situation, because any problems they are suffering now are self-inflicted.

“Nobody would have predicted this particular disease, but you could have predicted that there would be some kind of phenomenon that would sideswipe the industry,” said Mussell.

“When you have a measure that prevents the market from responding the way it otherwise would, essentially everybody loses.”

Mussell said the impact of COOL is similar to the Manitoba government’s effective ban on new hog barn construction: producers are hurt; processors are hurt; jobs are lost; the industry declines; the economy suffers.

“Nobody’s happy,” said Mussell.

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