Canada’s pork industry is reducing its dependence on the U.S. market, but still, too many pigs born in Canada wind up in the United States.
The Canada Pork Council noted last week that Canada’s pork industry has gone from exporting as much as 80 percent of its meat to the U.S. in the late 1980s to 44 percent in 2004.
This is good.
BSE trade restrictions in cattle and beef have made it abundantly clear that over-reliance on one market is a risky thing.
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But while pork is going to an increasingly diverse range of countries, close to 60 percent of pigs born in Canada still wind up in the U.S.
About 30 percent of all Canadian pigs go to the U.S. as meat, 18 percent go as weaner pigs and close to 10 percent go as slaughter hogs. The number of live hogs shipped south increased by almost 50 percent between 2002 and 2004.
Weaner exports accounted for most of the increase, encouraged by stable contracts from American producers who use cheap, subsidized corn and soybeans to fatten pigs to slaughter weight.
Although Canadian weaner exporters have done nothing wrong, the increasing number of pigs going south has attracted the attention of American hog producers who launched the trade investigation that is now levying the preliminary antidumping duty of 10.63 percent.
Like the BSE crisis in beef, the hog duty could be a wake-up call for the domestic pork industry, highlighting the need to keep more Canadian hogs at home to be fed and slaughtered, creating a market for feed grain and jobs for slaughter plant workers.
It also highlights the need for more export marketing.
The volume of pork exports in 2004 rose by only 0.4 percent over 2003.
Canada lost its second place ranking among the world’s pork exporters, a position it had held for several years.
As usual, the European Union came first, but the U.S. edged out Canada for second place.
Indeed, the U.S. appears to have revived itself in the world pork market. In January, its exports were up nearly 25 percent from the same month in 2004.
For Canada to reduce its reliance on the American market, to resume its export lead over the U.S. and to keep ahead of fast rising competition from Brazil, it needs more slaughter capacity and increased international pork market promotion.
Olymel in Red Deer has announced a $14 million expansion.
Sask Pork, Saskatchewan’s pork industry promotion organization, is actively lobbying for more slaughter capacity in that province and Manitoba Pork is doing the same thing there.
Maple Leaf, which owns Mitchell’s in Saskatoon, Saskatchewan’s big packer, as well as its own brand name world scale plant in Brandon, will have to decide where best to put its money.
The ball is starting to roll on the slaughter side of the equation; now the market development side must gear up to keep pace.
