Manitoba’s pig weanling export business is facing collapse as U.S packers shut their doors to Canadian born pigs.
“We’re at risk of losing half the weanling industry right now,” said Karl Kynoch, chair of the Manitoba Pork Council.
“Three weeks ago, nobody thought we were going to have this problem with the weanlings.”
The collapse in demand from the United States is because of the coming full enforcement of country-of-origin labelling (COOL) April 1, 2009. The U.S. industry is in a six-month phase-in period and tough enforcement and penalties are not being applied.
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The American hog industry has long known that packers would be unwilling to handle slaughter-weight hogs from Canada, but most believed it wouldn’t affect weanlings born in Canada but fed to slaughter weight on American farms.
A huge trade occurs between southern Manitoba weanling producers and feeder barn operators in Minnesota and Iowa. Last year, Manitoba produced about 4.5 million weanlings, with half going to American farmers.
Until a month ago, U.S. feeder barn operators were still buying Canadian weanlings. But then one of America’s biggest packers, John Morel and Co., warned it would no longer accept pigs that had been born in Canada. Feeder barn operators began canceling contracts with Canadian weanling suppliers.
Cargill in the U.S. has begun sending out 90 day notices to its slaughter hog providers that foreign-born pigs will not be accepted at its plants.
Tyson has made similar plans and there are fears the other slaughter companies will do the same.
“A lot of the packers have come out and said that as of April, they’re no longer going to take pigs that originate out of Canada as weanlings,” said Kynoch.
“A lot of guys have gotten notice on their contracts.”
Canadian weanling producers are scrambling to tie up deals with feeder barn operators whose slaughter companies have not yet banned Canadian-born weanlings, but those farmers are reluctant to take a chance on foreign pigs.
That leaves hundreds of thousands of weanlings on Manitoba farms searching for someone in Canada to buy their animals, but there aren’t many takers.
Slaughter plants on the eastern Prairies are already running at full capacity, so there’s little demand from hog feeders to buy extra weanlings. Few weanling producers have the room to feed out their own animals.
Already the export of Canadian slaughter hogs to the U.S. has collapsed. Last year, Manitoba producers shipped about 1.3 million slaughter hogs to the U.S., but this year that will probably drop to 300,000. Kynoch expects fewer than that in 2009.
Many weanling producers are culling sows and downsizing herds.
“There’s a pile of liquidation going on right now,” said Kynoch.
April 1 may seem like a long way away, but for feeder barn operators who take five months on average to feed a weanling to slaughter weight, that means any weanling bought from today onward will come to market after COOL is imposed. That’s why the door has shut so fast on Canadian pigs.
“It’s all due to COOL,” said Kynoch.
