By Bruce Cochrane
The vice-president pork analysis with EMI Analytics says pork producers in Ontario will be among the greatest beneficiaries from the repeal of U.S. Mandatory Country of Origin Labeling for pork.
Earlier this month, in order to avoid the imposition of over $1,000,000,000 in retaliatory tariffs on U.S. products exported to Canada and Mexico, the U.S. repealed provisions of Mandatory Country of Origin Labelling requirements for pork and beef.
Dr. Steve Meyer, the vice-president pork analysis with EMI Analytics, says a major roadblock to the movement of pigs into the United States from Canada has been removed.
Dr. Steve Meyer-EMI Analytics:
You first got to make the case that there's extra Canadian hogs to be had and there are some extra Canadian hogs but most of them are in Ontario.
I think this really makes a situation where Ontario producers will be able to bring pigs into the United States instead of taking them to Quebec.
This is probably bad news for Quebec processors.
I don't think it makes a huge difference in the prairie provinces because Canada has a shortage of pigs really to fill the slaughter capacity you have in Manitoba and Alberta already and so the Canadian packers are going to have to pay more for hogs.
It's probably bad news for Canadian packers but it should be good news for Canadian producers who will now have kind of an almost a duty free market available to them once again in the United States.
Any negatives that have been applied to prices to compensate our packers for all that segregation work probably won't be there anymore.
So I think it's going to be good for producers in the prairies, good for producers for sure in Ontario, very negative for Quebec slaughterers and put some pressure on margins for Canadian packers in the west.
Maple Leaf at Brandon and Olymel at Red Deer have had trouble filling their plants anyway and so this is going to make that a little bit worse, at least in the short run.
Dr. Meyer says, while repealing Mandatory COOL will make it easier to move Canadian hogs into the U.S. he doesn't foresee it as being the fuel for rapid growth of hog production in Canada.
He says, if there's any fuel for growth, it's probably the strong U.S. dollar.
Source: Farmscape