Canadian feeder pigs, slaughter hogs and pork exports to the United States are all on the upswing, though it’s not clear what the effect of mandatory country-of-origin labeling might have on those numbers in the future.
For the week ending Aug. 23, 105,910 Canadian feeder pigs came to the United States. In the 13 weeks prior, Canadian feeder-pig exports to the United States have exceeded 100,000 pigs four times, which had only happened once before.
Canadian slaughter hogs also ran above 2002 levels by 20,000 head from mid-June through late August, before falling off. Pork products entering the United States were up 15 million pounds through early summer compared to last year.
Why the influx? Canada’s case of bovine spongiform encephalopathy filled the country’s grocery stores with cheap beef, making pork difficult to sell. The United States has long been Canada’s top pork export market, so naturally, during the BSE trouble more pork would move south.
However, the dynamics of the North American pork industry may change once mandatory COOL goes into effect in September 2004. Under the law, all fresh cuts of muscle meat must be labeled with the country of origin. It’s expected that pigs born in Canada but raised and/or slaughtered in the United States will have some type of multi-nation label.
Packers hold the cards in determining how COOL ultimately affects the U.S./Canada pork trade.
“Different packers are taking different approaches, some have said they won’t take Canadian pigs. Others may only take Canadian pigs at certain plants or on certain days of the week,” says Ron Plain, University of Missouri agricultural economist. “Because only some plants may accept Canadian pigs, producers who raise them may become geographically concentrated.”
Plain suggests talking to your packer now, so you have time to take action before COOL becomes law.
Any U.S. farrowing expansion in the last five years has been under some kind of contract, says Mike Brumm, University of Nebraska Extension swine specialist. Moratoriums and environmental regulations make putting up new farrowing units difficult, so finding other feeder-pig sources may be tough.
There’s also the question of where the extra Canadian pigs will go if the U.S. option dries up. Canadians are looking to expand finishing operations, but environmental regulations will make it difficult.
Canadian packers may kill more of the hogs. The Maple Leaf plant in Brandon, Manitoba could add a shift and double its kill to 90,000 head a week, says Brumm. Another plant that killed 17,000 head a week is closed but could be reopened.
“There’s still no way Canada can kill an additional 100,000 hogs a week,” says Brumm. “Canadians can’t build finishing barns fast enough, with environmental regulations.”
Any extra hogs killed in Canada will likely make their way to the United States in the form of pork. Canadian pork will be labeled, but it’s no certainty that U.S. consumers will chose U.S. pork over Canada’s.
“It’s a product with potential to develop a niche market and get a premium,” says Plain. “U.S. pork makes up 90 percent of the product in U.S. retail markets, so there’s not much room to increase market share or chance for it to get a premium.
The biggest question regarding COOL is whether third-party verification will be required.
“USDA has said that third-party verification will be required, while COOL proponents have been saying it will not,” says Brumm. “We’ll have to wait until the final regulations come out to know for sure.”
While some folks blame pigs coming from Canada for the U.S. pork industry’s economic woes, COOL doesn’t appear to be the solution. Whether as feeder pigs, slaughter hogs or product exports, Canadian pork will enter the United States. Also, such restrictions would be hypocritical while the United States fights for free-trade agreements with other nations. Include the potential added costs to U.S. producers, and country-of-origin labeling looks to be very un-COOL for the North American pork industry.