Farmscape for December 10, 2015
The general manager of h@ms Marketing Services says the imposition of retaliatory tariffs on products imported into Canada from the United States will hurt pork producers in both countries.
The World Trade Organization has authorized Canada and Mexico to seek retaliatory tariffs well in excess $1,000,000,000 annually on a wide range of imports from the United States in response to U.S. Mandatory Country of Origin Labelling.
Perry Mohr, the general manager of h@ms Marketing Services, says in the event the U.S. fails to address the issue and Canada imposes tariffs pork producers in both countries will be hurt.
Clip-Perry Mohr-h@ms Marketing Services:
Unfortunately it probably will have negative implications.
As a matter of fact, the day that the announcement was made which was Monday, we saw lean hog futures decrease in value and the explanation that we had at that particular time is this was the reaction to the World Trade Organization's decision on the $1,000,000,000 in tariffs.
If Canada does start applying tariffs to pork, which is one of the things on the list, right now we've seen U.S. processors killing at capacity.
We know, based on past experience, that they have to export about 25 percent of what they produce in order to clear the market so, if we put a tariff on U.S. pork coming into Canada and that pork starts backing up into the United States, it will in effect lower U.S. hog prices which will in effect lower Canadian hog prices because we use those U.S. markets as our pricing point.
Mohr notes, any tariffs collected by Canada will not benefit Canadian pork producers but rather will go into government general reserves.
He says the best case scenario for everybody concerned is that the U.S. government repeals Country of Origin Labelling and that no tariffs are imposed.
For Farmscape.Ca, I'm Bruce Cochrane.
*Farmscape is a presentation of Sask Pork and Manitoba Pork