Free trade with the European Union and South Korea could help Canadian hog producers refill their barns, says a Canadian economist.As well, American hog trade experts say the key to increasing U.S. hog prices is in approving existing free trade agreements that haven’t been ratified.“Potentially, this is a big deal for the pork industry,” George Morris Centre economist Al Mussell said about a possible Canada-EU free trade agreement.American experts at the recent World Pork Expo in Des Moines, Iowa, estimated that the United States’ three pending free trade deals with Panama, Colombia and South Korea would increase U.S. pork prices by an average of $11.50 per pig.Mussell said he doesn’t have hard numbers for what free trade with Europe, South Korea or China would mean for Canadian hog and pork prices, but price shouldn’t be the only factor.“People always respond to the price, but the bigger piece to me is the volume of sales,” he said.“Prices may not go up a lot (due to FTAs), but if we could sell a whole lot more … that might be a better gain than slightly higher prices. We have a lot of empty barns right now.”He said the best gain from free trade with Europe would be access to a market that wants what North America has too much of: picnics, butts and shoulder cuts.North American demand is high for pork bellies and loins but less for the rest of the animal, which often has to be cleared at discounted prices.Free trade would fix that.“Lo and behold, that’s what the Europeans are short of,” Mussell said about the less expensive cuts of pork that Europeans use in their huge sausage and ham industries.“We could basically leverage cultural differences.”Iowa State University economist Dermot Hayes made a similar point about China during a World Pork Expo presentation.“Chinese just start at the corners of the animal and move in,” he said.“The tail, the ears, the feet – they’re all highly valuable. And the parts that tie the corners are valuable, too.”Hayes said China’s newly rich urban residents have not abandoned meat items considered unappetizing in North America, such as chicken heads and pig feet, and he saw no sign of that changing.Open access to the Chinese market would allow American producers to sell parts of the pig carcass that have little value in North America.That trade has already been happening, but only in the unofficial “grey market” at a big discount.During a news conference at the expo, National Pork Producers Council trade specialist Nick Giordano said China is a vexatious but lucrative potential market.“China has a demonstrated track record of inflicting harm on exporters,” he said.“But there’s no greater money-making opportunity for the American pork industry anywhere in the world than China.”NPPC past-president Don Butler said free trade agreements have helped increase U.S. pork exports by 688 percent since the North American Free Trade Agreement was signed in 1994.“For our industry to prosper and remain viable, we need to continue to grow our export opportunities and the best way to do that is through the implementation and the use of free trade agreements,” he said.
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