While U.S. slaughter plants are expected to be pressed for slaughter capacity in the fourth quarter of this year, Canadian plants are sitting with excess capacity. That is especially frustrating since Canada is expected to send close to 7 million hogs to the United States in 2002 to be slaughtered.

In a meeting between U.S., Canadian and Mexican pork producers, Canadian producers agreed to work closely with U.S. producers and the governments of Canada and the United States, in an effort to avoid a bottleneck at U.S. slaughter plants. The groups will work to develop a plan to manage fourth quarter live-hog exports to the United States.

Since Canadian live hog prices track U.S. live hog prices, it is to the advantage of producers in both countries to work together to avoid a repeat of the 1998 price collapse.

This doesn’t mean the United States has the green light to send market hogs north to slaughter, at least not yet. There are still some issues to work out before the United States sends hogs to Canadian plants, including the psuedorabies issue. Canada exports a lot of pork to Australia, which will not accept U.S. pork because the United States is not PRV-free. So, Canadian pork plants have to be careful not to jeopardize their export markets.

Still, export of hogs to Canada in the fourth quarter is one possibility that could be discussed as the Canadian and U.S. pork industries continue to work together. There’s still a lot of work to be done, and precious little time to get it done in, but this is a significant step in the right direction.