September 17, 2008
The gap between Canadian-US pork trade is narrowing as Canada exports more pork to but imports less from the US, according to an official with the Canadian Pork Council.
In 2007, Canada imported nearly 200,000 tonnes of US pork but exported 353,000 tonnes of pork products to the US, compared to the export volume and import level of 400,000 tonnes and 122,000 tonnes respectively in 2005, said Martin Rice, executive director with the Canadian Pork Council.
The gap has the possibility to narrow further in the years ahead, Rice said.
Rice noted that while the US used to account for 80 percent of Canada's pork exports, that number has since plunged to 35-39 percent.
The decline in Canadian pork products shipped to the US was partly due to the drop in pork processing in Canada, as well as to Canadian producers who are finding it more profitable to ship their feeder pigs to the US to farrow and finish them, said Rice.
US meat processors also succeeded in accessing the Canadian market with retail pork, Rice said.
Rice said there are companies and retailers in Canada which only purchase US pork products, and some which buys a bit of both. Rice was unclear whether the recent listeria outbreak connected to Maple Leaf Foods has led to confidence loss in Canadian pork products which in turn caused a shift to US products at the retail sector.
Rice said the Canadian pork processing business model for the future is to distance from fresh cuts, evident from the number of businesses that have already left the pork product business. With less pigs to process in Canada, Rice expects Canadian pork exports to the US would fall below 300,000 tonnes, while imports of US pork would remain at the level of 200,000 tonnes or higher.
As US pork processors export aggressively around the world, Canadian processors are trying to keep hold of their offshore markets rather than maintain its US market share, Rice said.
Rice forecast that Canada's offshore market share for pork products to decline further, especially as Canadian hog production still has to undergo a further contraction.