Canada might have won the recent hog trade dispute with the United States, but some industry observers and experts think Canadian pig producers shouldn’t get back to business as usual.
The ease of launching a trade attack shows that Canadian producers are vulnerable whether or not they are eventually successful in beating them back.
“It might be a smart thing for your industry to be less reliant on slaughter plants and markets that are in a foreign country,” said University of Missouri hog industry analyst Ron Plain.
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“As soon as you’re depending on markets that lie across an international border, there’s the chance that you’re going to have problems like this.”
Because the Canadian industry won the recent subsidy and dumping dispute, the temporary duties imposed on Canadian pigs for months have been suspended and the money paid by importers will be refunded.
Some hog exporters, euphoric with victory, have said they see the U.S. market as wide open for Canadian exports and they plan to continue integrating themselves into a North American industry.
Others plan to continue selling to American buyers, but are preparing for what they believe will be another inevitable trade challenge.
The recent dispute occurred during record high pork prices, and the U.S. International Trade Commission dismissed the U.S. National Pork Producers Council’s claim that Canadian imports hurt its members because it could not show damage to the American industry.
But American and Canadian officials say U.S. anti-dumping laws could be used successfully against the Canadian industry the next time the hog cycle pushes prices below the cost of production.
Ontario Pork chair Larry Skinner said his organization, which exports slaughter hogs, wants to avoid another U.S. trade action.
“We’ve got to be careful,” he said.
“We don’t want to be accused of dumping or anything in that area.”
Skinner said his organization might consider making longer term contracts with American buyers to ensure that even in a price downturn, Ontario Pork’s pigs won’t be sold below the cost of production.
“We either have to do that, or stay out of it (the U.S. market during low price periods),” said Skinner.
He would like to see more hog processing in Ontario and said he was pleased to see a lot of Ontario hogs heading to Quebec slaughter plants during the recent trade dispute.
Skinner said Ontario Pork wants permanent access to the U.S. market, but doesn’t want to rely on it.
“We’ve looked at it as a long-term market, but in a limited way. We’ve not wanted to expand or grow in the U.S. market because of the very thing that we’ve just been through,” said Skinner. “We feel vulnerable to that.”
The Manitoba industry’s situation is different. Not only do Manitoba producers export market hogs to U.S. slaughter plants, but also millions of weanling pigs to midwestern U.S. feeder barns. Those weanlings cannot be rerouted easily because there aren’t enough feeder barns in the Prairies to take them.
