OTTAWA – A sharp increase in live hog exports to the United States this year, along with a decrease in exports of pork, has alarmed the meat processing industry.
Robert Weaver of the Canadian Meat Council said the figures run contrary to the government and industry goal of having more job-creating processing and value-adding in Canada.
“We were hoping and expecting the numbers would have gone the other way this year,” he said in an interview. “Instead, we are shipping hogs to the U.S. They are being converted into red meat and then we import some of it back. That is the wrong direction in terms of industry and jobs here.”
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Martin Rice of the Canadian Pork Council echoed the view.
While increased live hog sales into the U.S. market are not bad news for hog producers, Rice said farmers would prefer to sell more to domestic packers.
“Having domestic buyers allows farmers to develop vertical alliances and keeps jobs here,” he said. “I think it is fair to say farmers would rather sell to domestic packers to have it shipped down as pork.”
To the end of November, according to Statistics Canada, 1.3 million market hogs were sold to the U.S. It represented a 168 percent increase over last year’s 11-month total of just under half a million.
During the same period, exports of fresh and frozen pork to the U.S. declined almost 13 percent and processed pork exports fell 10.6 percent. And imports of fresh, frozen or processed pork from the U.S. have increased 37 percent to just under 30,000 tonnes.
Weaver said those live exports and processed imports mean fewer jobs in Canada.
In part, he blamed the federal government and its cost recovery program for the problem. Canadian packers and processors pay millions of dollars in user fees that their American competitors do not face, said Weaver.
And with an open border, it is easy to import if the price is better.
“User fees are very much eating into our competitive position,” said the packing industry spokesperson.
Other problems
Hog producers suggest there is a more general problem with the Canadian packing industry’s efficiency. Cost recovery fees are just part of it.
“It’s price related,” Canadian Pork Council president Jim Smith said in an interview. “Obviously, the packers in the U.S. are more efficient than ours and it allows them to be able to come to Canada and pay the freight on the hogs to get them down there to process.”
He said the increase in live hog exports hurts the effort to make the Canadian packing industry more efficient. It reduces volume and therefore increases costs per animal.
