October 27, 2008
COOL stifle Canadian hog exports to US
The flow of Canadian hogs to the US has trickled down due to the mandatory Country-of-Origin labelling imposed by the US government.
Tyson and Cargill are reportedly reluctant to buy from farmers with Canadian weaneres stocks as they clearly prefer to buy all-American hogs as it is easier for them to manage.
These companies have to segregate hogs that have any Canadian content and apply an appropriate label - for example, Canadian born, US raised and US slaughtered.
Smithfield, is the largest pork packer and producer in the world, isn't taking anything with Canadian content, and that includes Canadian-slaughtered pork for its further-processing plants.
On the other hand, smaller packers have yet to issue policies regarding Canadian hogs but they are also reluctant to buy pork products coming from Canada.
For example, Hatfield has long bought some Ontario market hogs, but hasn't bought any since COOL took effect.
Bridgette Dyce of the marketing department at the Ontario Pork marketing board said they have found a home for all of the hogs with Ontario packers. Some have added overtime during the week and some have added a Saturday kill.
However, she said it is clear that Ontario farmers have no gains from the dramatic plunge in the value of the Canadian dollar.
The George Morris Centre said from its analysis more than a year ago that COOL would drive the price of Canadian hogs down by at least $5. At the moment (Oct. 21), it looks C$10 or more.
Dyce said that while Ontario farmers who have long-term contracts with US packers can continue its deliveries, the American meatpackers have stopped taking any extra loads.
On the beef side, some US plants have set aside special days or shifts to handle Canadian cattle. For example, the former Taylor Packing plant now owned by Cargill takes cull cows from Ontario one day a week and the former Moyer plant owned by Smithfield takes Ontario cattle two days a week.