September 27, 2012

Global pork crunch hits as UK, Canadian production drop

A global bacon shortage now appears unavoidable as UK pig herds shrink while pig farms across Canada collapse.

The National Pig Association, the chief pork advocate in the bacon-loving British Isles, warned ( Sep. 25) that skyrocketing prices for soy and corn had already begun to dramatically shrink European pig herds, "a trend that is being mirrored around the world."

The warning comes less than two weeks after Canada's second-and fourth-largest pig producers filed for creditor protection, leaving as many as 1.5 million pigs in the balance.

"Producers are deciding that pig farming just is not sustainable, and deciding to empty their barns," said Gary Stordy, spokesman with the Canadian Pork Council.

The culprit is the US drought. Dry conditions in the midwest last summer affected nearly 90% of US corn fields, kicking up prices by as much as 50%. "There's just less corn around," said Andrew Dickson, general manager of the Manitoba Pork Commission.

For a farmer raising a modest herd of 14,000 pigs, spikes in grain prices have added US$213,000 in costs over the next six months, said Stordy. For larger producers such as Saskatchewan's Big Sky Farms - which recently entered into receivership - added costs were estimated to be as high as US$1-million per week. "We are in a crisis that could wipe the industry out in Manitoba, and potentially right across Canada," Doug Chorney, president of a Manitoba farm group seeking US$130-million in government loan guarantees, told the agricultural press last week.

Agriculture Minister Gerry Ritz told a conference of the Canadian Farm Writers Federation in Winnipeg last weekend that keeping up the supply of Canadian hogs is a key priority for the federal government. "We are working with the pork industry on what the best way to do that is," he said.

Canada is the world's third largest pork exporter, shipping out US$2.6-billion of pig products annually, mostly to Japan and the US. Quebec pig farmers lead the pack, slaughtering eight million hogs in 2010, followed by Manitoba, which slaughtered more than five million. In the US, farmers have begun searching for feed alternatives, including rejected candy. "It actually has a higher ratio of fat than feeding them straight corn," Kentucky farmer Joseph Watson told a local TV station.

Unfortunately, such creative solutions are not always available to Canada's far-flung pig farms. "Whether it's candy, food scraps or burnt bread, our industry is by nature rural so they can't truck it in affordably," said Stordy. Although pork is scorned by Muslims, Jews and Rastafarians, it remains the world's most popular meat, with humans consuming about 100 million tonnes of pigs per year. "It's because the Chinese eat so much," said Dickson.

However, Chinese consumers will be somewhat insulated from the coming shortage by frozen stockpiles of pork maintained as a kind of strategic pork reserve by the Chinese government. In Canada, within five to six months, estimates the Canadian Pork Council, consumers will start to see the effects of North America's pig herd declines.