LETHBRIDGE – Exports are keeping the Canadian pork industry prosperous, partly because of the misfortune of others.
Market analyst Kevin Grier of the George Morris Centre told a recent pork producers’ meeting in Lethbridge that overseas pork demand remains high because of an embargo on North American beef in Asia, rising fears over the spread of avian flu in poultry flocks and declining fish stocks.
“We have had such strong export growth because the Japanese have been foolish enough not to want to take North American beef,” he said.
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“That means they pay through the nose for Aussie beef and means they have a stronger demand for pork.”
Grier said the strong demand should hold even if Japan agrees to lift the North American beef ban, which was imposed after BSE was discovered two years ago.
“In 2006 the Japanese are likely to take North American beef. It won’t occur soon and when it does occur, it will be slow.”
Pork production is modestly increasing in North America to address export demand. However, despite the increased supply, prices have remained strong for almost two years in Canada and the United States, even with trade disputes and a rising dollar.
Overall, Canada depends on the Americans to take 40 percent of its exports, compared to 90 percent a decade ago.
Canada slaughters 22 million hogs annually and last year the equivalent of 5.5 million pigs went to the U.S. in a box. About 8.5 million were shipped live.
Grier said the packer situation is a weak link, although it is improving now that Olymel has announced an aggressive plan to expand in Red Deer and build a plant in Manitoba with two other partners.
Overall, Grier expects a positive North American outlook in 2006 with modest hog expansion of one percent more slaughter and two percent more animal production.
“Despite the fact the U.S. producers have experienced 22-23 months of profitability, they are continuing to be very cautious,” he said.
