A glut of Canadian slaughter hogs has been hitting the U.S. market just as prices have slumped.
But prairie pork producers’ bacon is being saved by big U.S. export sales.
“If the U.S. was not exporting as much pork as they currently are, we would be in deep, deep, deep trouble,” said Perry Mohr, general manager of Manitoba Pork Marketing Co-operative.
Producers are suffering through what is believed to be the low part of the traditional four-year hog cycle, a situation exacerbated by two factors.
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The surge in the value of the Canadian dollar has reduced American hog prices when converted to loonies.
And just as the American hog industry has entered its slump, packer capacity across the Prairies has shrunk.
“More hogs and less slaughter capacity equals more exports,” said Mohr. “They’re increasing on a weekly basis.”
Prairie producers are grappling with the consequences of slaughter capacity cuts from Maple Leaf Foods, which has shut plants in Winnipeg and Saskatoon, while Olymel slashed production at its plant in Red Deer.
Maple Leaf in Brandon has been expanding into a double shift, but that still won’t absorb all the pigs displaced by other closings.
“The increases haven’t offset the decreases,” said Mohr.
The Alberta situation is improving, however. Olymel had cut slaughter by about 1,500 hogs per day, forcing many Alberta hog producers to find slaughter elsewhere.
But the company was boosting its kill Nov. 30 and expected to be back at full production in the first week of December, said Mack Rennie, manager of the Western Hog Exchange.
“They’re increasing it back up again. We won’t be sending that many out again, that’s for sure,” said Rennie.
“There were lots going out, but there probably aren’t going to be any more.”
Fortunately, the U.S. market has been able to handle Western Canada’s excess hogs, but Mohr thinks that might not be reliable unless the U.S. continues to find export sales. U.S. exports this year are about 10 percent of its production.
Ironically, sales of American pork to Canada are booming. So while Canadian pigs are flowing into the U.S. at a record pace – about three million slaughter hogs have been shipped to the U.S. this year – much of that increase is finding its way back into Canada in meat form.
Jacques Pomerleau of Canada Pork International said 2007 U.S. pork export numbers look healthy, but sales to Mexico and Japan have weakened, leaving Canada the U.S.’s strongest market.
