December 19, 2003

US Imports of Canadian Hogs Up 30% in 2003

According to the monthly outlook report from the USDA's Economic Research Service (ERS), U.S. imports of Canadian hogs will hit 7.5 million. This figure represents a 30% increase from its 2002 imports.

Almost all import categories of hogs have increased, especially slaughter hog imports, which have registered an increase of 18%. Feeder pigs increased 24%, and sows/boars increased 33%, says ERS.

ERS says the major factor in the rise in Canadian hogs to the US is the ability of the US producer to be able to pay more for hogs than Canadian finishers and packers.

"Low Canadian bids derive from weak slaughter margins that directly result from an appreciated Canadian dollar," says the agency. "The appreciated dollar has made Canadian pork more expensive and less competitive in foreign markets where it competes with lower priced pork from the United States and Denmark, in particular."

"From a Canadian packer's perspective, the consequences of the high-priced Canadian dollar and lower export demand for Canadian pork products include--but are not limited to--low-to negative slaughter margins, and reduced slaughter numbers," says ERS.

ERS also says the Canadian breeding herd appears to be responding to lower packer demand and lower returns on feeder pigs exported to the United States.

"Since August, weekly USDA data indicate that US imports of Canadian sows and boars have increased almost 53% over the same period last year, suggesting at a minimum, that culling of the herd is taking place," adds ERS.