April 15, 2011
 

US live hog imports from Canada to stabilise

 

 

After experiencing a considerable hit for approximately four years, Canada's live hog exports to the US have started to be constant.

 

An analyst said the Canadian hog herd has also been stabilising, so there are more animals that can be shipped.

 

He added that those lower volumes were behind the decline in US exports, and it came from not being very profitable due to the strong Canadian dollar.

 

Another analyst said the drop in exports was due to uncertainty in the US regarding mandatory country-of-origin labelling (COOL).

 

"There was a lot of concern around COOL, and there were many US processors that would not accept Canadian hogs," the second analyst added. "What has happened in the last year or so, some of the packers south of the border have accepted some Canadian hogs, so the weanling and feeder market is still able to ship animals to the US."

 

A total of 9.36 million live hogs were shipped to the US from Canada, in 2008, while 2009 saw 6.38 million live hogs shipped south, a 32% decline. The decline from 2009 to 2010 was only 10%, with 5.76 million live hogs shipped to the US in 2010. Projections for 2011 show live exports are to decline by only 2% from last year.

 

Through the first three months of 2011, Canada had exported a total of 262,374 live slaughter hogs to the US, which compares to 283,000 at the same time one year ago. As for feeder hogs, a total of 1.186 million live Canadian animals have gone to the US, which compares with 1.199 million through the first three months of 2010.

 

"We have also seen very strong weanling and feeder prices in the US so guys are making good money exporting live animals south of the border," the second analyst said.

 

As is the case when talking about any type of exports to the US, the value of the Canadian dollar is always an important issue. Both analysts agreed the recent surge to the US$1.04 level could hurt overall exports to the US.

 

The first analyst said that one reason for a decline in totals since 2008 was a pickup in domestic demand.

 

"What we have seen recently is slaughter capacity bumping up, with a new plant that has opened up in the last couple of months in Moose Jaw, Sask. All the other pork packers are aggressively trying to add hours to their plants as well," the second analyst said.

 

Another factor is the feed cost advantage that Canadian producers hold, especially with the rising cost of corn.

 

"We will probably see more animals get finished here in Canada, just because it is cheaper to do so," the second analyst added.