Expanded U.S. Slaughter Capacity Expected to Increase Canadian Live Hog Prices

Farmscape for January 11, 2016

The general manager of h@ms Marketing Services expects expanded U.S. slaughter capacity, scheduled to come on line next year, to result in increased live hog prices in Canada.
Last month the U.S. ended the enforcement of provisions of Mandatory Country of Origin Labelling pertaining to pork and beef following the passage of legislation that included repeal of those provisions.
Perry Mohr, the general manager of h@ms Marketing Services, observes, although the change has restored Canadian access to the U.S. market for Canadian slaughter hogs and weanlings, pork processing plants in the U.S. have been operating at capacity so they have had little incentive to source Canadian hogs so far.

Clip-Perry Mohr-h@ms Marketing Services:
I think the important thing to take into consideration here is that this is relatively new news.
It was something that had a negative impact that took over 7 years  and it's probably going to take 2 or 3 years before we can fully answer what the impact on a go forward basis is going to have on the industry, not only the flow of hogs but the prices.
I believe in the long term the fact that we have open access to an other market, a market that we know is going to expand.
We know that slaughter capacity is going to expand in 2017 so I believe that, as this unfolds, and as we get more slaughter capacity in the United States, there will be an appetite for the Canadian weanlings and the Canadian slaughter hogs and that will put pressure on the Canadian packing industry to possibly adjust formulas to account for that increased competition.

Mohr is confident, over the long term, the level of interest in Canadian weanlings will rise to pre-COOL levels.
He notes the health status of Canadian weanlings tends to be considerably better than that of weanlings produced in the U.S. and a clean healthy weanling just grows faster and costs less to produce.
For Farmscape.Ca, I'm Bruce Cochrane.

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