Hog producers hope they can divert the corn industry’s rumbling trade roller before it crushes them.
They’re trying to convince corn growers’ associations that there are other ways to respond to United States corn production subsidies than import duties.
“We’re investigating how we can support them on alternatives to duties having to be implemented,” said Canadian Pork Council executive director Martin Rice.
Rather than imposing duties that will raise the price of corn to all buyers, pork producers hope the corn industry and governments can find a less harmful way to mitigate the damage of U.S. crop production subsidies.
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Hog producers across Canada are worried that duties on U.S. corn will raise domestic feed prices and limit sources of feed.
The situation is particularly dire in Manitoba, where fusarium head blight has made most feed grain in the Red River Valley inedible, and producers rely on imported corn.
Duties on U.S. corn would put the region’s hog producers at a disadvantage to producers in areas with ample feed grain, such as southwestern Manitoba, Saskatchewan and Alberta, and hand a competitive advantage to their main competitors in Iowa and southern Minnesota.
“It’s a really bizarre situation to be in here,” said Rick Bergmann of Spectrum Feeds, which supplies feed and management services for many Red River Valley farms.
“Everybody’s got the jitters. We’re all hoping we can dodge that big bullet.”
The Canadian Pork Council is trying to organize allies in convincing Ottawa to back away from imposing corn duties.
Rice said supply managed industries also use U.S. corn, but they are not as vulnerable as the hog industry to feed cost spreads between the U.S. and Canada.
Feed manufacturers are concerned and the beef industry is worried, Rice said.
Ethanol producers are also worried because they rely on cheap corn, often from the U.S., for their plants.
But they are also less vulnerable than the hog industry because they will probably be able to get duty refunds if they export ethanol and corn products from U.S. product back to the U.S.
Rice said Canadian producers aren’t just worried about a feed cost disadvantage. They worry that expensive feed grains will encourage Canadian producers to ship feeder pigs to the U.S., which will anger American producers and encourage a trade backlash.
“Fear could drive a lot of feeder pigs to the U.S., where there will be an advantage to finish pigs.”
The hog industry has spoken to the corn industry’s leaders about their worries, said Rice, who added hog producers understand why corn growers are angry about U.S. corn.
“There is a widespread recognition that U.S. grain programs have a major impact on the world market and on the livelihoods of Canadian producers,” said Rice.
“The fact that the U.S. programs are so much the target of the WTO (World Trade Organization) negotiations, it’s not a surprise to anyone that Canadian corn farmers would find the U.S. programs have an effect on them.”
Rice said corn and hog producers are examining whether safety net programs or other vehicles can be used to offset U.S. subsidies.
In Ontario, corn and hog production are major industries. In Manitoba and the rest of the Prairies, corn production is relatively small and hog production much more valuable.
But Manitoba agriculture minister Rosann Wowchuk isn’t picking sides.
“I wish there was a better mechanism to deal with these things,” said Wowchuk about the federal investigation that could lead to duties.
“Under the system we have, the corn growers have the right to ask for an investigation.”
She said regardless of the outcome of the investigation, Canada needs to develop a better way of dealing with cross-border trade friction.
“I think the process we have right now is very cumbersome,” said Wowchuk.
“I think there are better ways of resolving these kinds of things, but I also believe that every commodity, if they think they are being treated unfairly, has the right to ask for fairness, and in this case they are asking for an investigation.”
She said she will not be happy if the corn issue is used as a form of reprisal for the dispute over softwood lumber.
“If there is an issue, it should be handled as a separate issue, not tied to retaliation,” said Wowchuk.
“I would like to see both industries thrive and that one doesn’t suffer because of a trade dispute of another one.”
