January 7, 2004

US Mad Cow Unlikely To Cause Surge in Canadian Hog Exports

The emergence of mad cow disease in Canada last summer caused an unprecedented surge in live Canadian hog exports. However with the United States reporting its first BSE case, experts feel that the Canadian Hog industry may not see a similar surge.

George Morris Centre Senior Market Analyst Kevin Grier says the case in Washington is unlikely to create the same scenario.

"During the summertime Canadians consumed significant volumes of beef compared to previous years.

That was primarily due to lower prices that were being advertised and, I suppose, to show some support for the industry.

The key there is that we can only eat so protein and so the consumption or demand for pork declined during the summer months and that resulted in lower packer margins and it resulted in less packer desire to purchase Canadian hogs. A lot of exports resulted from that.

That's not likely to occur again this time because this other case of BSE is hopefully not going to result in the closure of the border to beef so hopefully the beef will still flow.

While it may slow down or impede the opening of the border to live cattle, I hope it won't have any impact what so ever on the beef trade.

I doubt that beef prices are going to come crashing down and I doubt we're going to see massive quantities of beef on the market and, more to the point, I don't think we're going to have that same negative impact on pork".

Grier says, although a surge in hog exports is not expected, the BSE incident in the US will negatively impact prices.

He says pork prices were being support by strong US beef prices and there will be a lot US beef looking for a home.