North America - Pig imports swell as U.S., Canada 'integrate'

Date of publication : 1/6/2005
Source : Farm Week
A “largely integrated” North American hog industry had the U.S. importing about 8 percent of the hogs it slaughtered in 2004 from Canada. Imports of about 8 million Canadian hogs this past year represent an eightfold increase from just 15 years ago, according to an analysis by Mildred Haley, an agricultural economist with USDA. Ron Plain, a University of Missouri livestock economist, agreed that relatively open borders gave Canadian and U.S. hog firms the expectation “that hogs and pork can move very readily, easily, and quickly across the border.” The biggest gain in imports from Canada has been in feeder pigs, which have grown to about 67 percent of all hog imports this past year from only 16 percent in 1989, USDA reported. Plain anticipates that the level of Canadian-born feeder pigs entering the U.S. will continue to increase. Although slaughter hogs have declined as a percent of total imports from Canada, they temporarily surged after BSE was confirmed in Canada during May 2003, Plain said. With so much cheap beef in Canada at that time, Canadian pork producers turned to the U.S. as a market outlet. But market hog imports from Canada have started to trend downward again. The emergence of Canada’s feeder pig industry is predicated on the U.S. being Canada’s No. 1 customer, Plain said. Pork from a pig born in Canada is more likely to be consumed in the U.S. than in Canada. “The U.S. is a bigger customer of Canadian hog farms than is Canada,” Plain added. The National Pork Producers Council (NPPC) and state pork organizations have successfully argued that illegal Canadian government subsidies to pork producers there justified a U.S. duty against live hogs coming in from Canada. In making its case, NPPC said “large Canadian subsidies have distorted the North American hog and pork market to such an extent that almost all new sows added to the North American herd in the last decade have been added in Canada.” At the same time, Plain and USDA’s Haley said geography and weather have given Canada some comparative advantage in producing feeder pigs. As a country with “a lot of land and not many herds,” Canada is able to reduce the threat of hog diseases by geographically spreading out hog operations, Plain said. With cooler summers, Canadian pig producers also deal with fewer seasonal infertility problems caused by late-summer heat stress, he added. Canadian breeding herds have become more efficient than U.S. herds in terms of pigs per litter and pigs per breeding animal per year, Haley said. “On the other hand, (U.S.) Corn Belt states offer abundant and relatively stable supplies of corn and soybeans, and thus Corn Belt production operations tend to specialize in finishing feeder pigs,” she added. Some Canadian farrowing operations finish their Canadian-born pigs under contract in the U.S., allowing them access to the cheaper feed and higher hog prices typical in the U.S., according to Plain. Combined hog inventory and sow farrowing estimates are becoming a more useful way to appraise pork market conditions, he said. In October, USDA launched publication of quarterly U.S. and Canadian hog and pigs reports, a joint effort of USDA and Statistics Canada.
 
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