December 29, 2005

 

Canadian pork will face challenges in 2006
 

 

Canada's hog and pork industry would face challenges in 2006, especially from higher feed costs, trade issues, continued appreciation of the Canadian currency and the need to increase domestic slaughter capacity, industry feedback indicated.

 

Live hog producers in the country might see a rise in feed costs due to the recent anti-dumping duties imposed on US corn by the Canadian Border Services Agency.

 

Brad Marceniuk, a hog economist with Saskatchewan Agriculture and Food, said the tariffs would raise the cost of finishing hogs in Canada and encourage domestic producers to continue increasing live hog exports to the US.

 

Analysts said any surge in live hog exports to the US might provoke retaliatory trade action from the American government.

 

The Canadian currency's sharp appreciation against the US dollar has also made the country's hog sector less competitive, an industry analyst said.

 

Despite the challenges, executive director of the Canadian Pork Council Martin Rice said some domestic companies still preferred to finish hogs in Canada rather than in the US.

 

Rice added that the value of Canada's pork exports for 2005 is expected to reach nearly C$3 billion, compared with less than C$1 billion 10 years ago.

 

The Canadian Pork Council expects pork export volume this year to total 1 million tonnes, compared with 931,191 tonnes in 2004. Live hog exports this year is expected to reach 8 million head compared with 8.511 million last year.

 

Rice said Canada has been steadily exporting less pork to the US while shipping more to Asian countries.

 

Several Canadian hog processing facilities are also in the process of being certified for exporting pork products to the EU, Rice added.

 

Rice estimated that Canada has a total slaughter capacity of about 24 million hogs a year in 2005. This figure is expected to rise to about 25.5 million head a year in 2006.