Federal agriculture minister Lyle Vanclief is casting a cautious eye at the almost unlimited optimism that seems to be driving expansion of the prairie hog industry these days.
The Ontario farmer and rookie minister is a fan of diversification and has had personal experience in the hog industry on his farm near Belleville, Ont.
But in a year-end interview, he offered a caution that any expansion must have a market. For hogs, the available market is in exports, which are vulnerable to several factors.
“I have a concern that they don’t expand so rapidly that you can’t find a market for all the stuff,” he said.
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Relies on exports
Vanclief noted the beef industry is the same. Canadian production far exceeds domestic consumption.
In the hog industry, he said investors must remember that 70 percent of production goes abroad, including all new production.
The competitive advantage for that foreign-destined product depends on many factors, from market access to the value of the Canadian dollar and domestic interest rates.
“It just points out all the more strongly how we must adapt to those export markets and our access to those export markets becomes more important. Every animal born into expansion is for export,” Vanclief said.
The minister noted interest rates have been hiked in recent weeks as the Canadian dollar fell.
“I don’t think it is enough to slow up the livestock expansion in Western Canada,” he said.
But he suggested that industry players take a close look at the implications of depending totally on foreign markets before making major investments.
