Report Highlights

This report details developments in the production and trade of Canadian cattle and beef and of Canadian hogs and pork and provides post forecasts for 2006.

Executive Summary

Increases in the Canadian hog inventory have moderated in the past two years and the July 1, 2005 survey by Statistics Canada showed only fractional growth (0.9%) compared to total hog numbers on farms on that date a year ago.

Following a flat performance in 2004, Canadian pork exports rebounded during the first six months of 2005 with strong sales increases to South Korea, Japan, Romania and Australia. Canadian pork exports to the United States, the largest export market for Canadian pork continued to decline in the first half of 2005. On balance, Canadian pork exports during 2005 are forecast to exceed 1.0 million metric tons for the first time.

During 2004, Canadian pork imports from the United States surpassed the 100,000 metric ton level for the first time since the late 1970s. For 2005, pork imports from the United States are on pace to register a year over year increase of approximately 30%.

Hogs and Pork

Increases in the Canadian hog inventory have moderated in the past two years and the July 1, 2005 survey by Statistics Canada showed only fractional growth (0.9%) compared to total hogs on farms on that date a year ago.

Pork Production

For 2005, Canadian pork output is forecast to advance modestly to 1.96 million metric tons, up 1.2% above last year’s level. Present prospects point to relatively stable hog inventories throughout 2006 and another modest year-to year production increase driven partially by an anticipated increase in exports.

Live Hog Exports

Canadian live swine exports to the United States reached a record 8.5 million head during 2004. In March of 2004, the U.S. Department of Commerce (DOC) initiated countervail and anti-dumping investigations based on a petition by the U.S. hog industry. Over the course of the case, the DOC determined that Canadian subsidies for its hog industry were too low to warrant the imposition of a countervailing duty but ruled affirmative in the dumping phase. However, in April 2005 the United States International Trade Commission (ITC) determined that the U.S. hog industry was not materially injured or threatened with material injury by imports of live swine from Canada and the case was terminated.

For 2005 the available supply of live hogs for export is expected to decline. Inventory numbers suggest that breeding herd expansion has leveled off and farrowing intentions for the final quarter of 2005 are reportedly 2.7% below the level for the October to December period of 2004.

Pork Trade

Exports: Canadian pork exports fell slightly during 2004 reflecting lower exports to the United States, Taiwan, and China but total pork exports rebounded during the first six months of 2005 with strong sales increases to South Korea, Japan, Romania and Australia. Canadian pork exports to the United States, the largest export market for Canadian pork continued to decline in the first half of 2005. Canadian pork exports to Australia have been affected by the uncertainty created by a court ruling on an animal health issue related to Post Weaning Multisystemic Wasting Syndrome, a disease of young pigs (see CA5042 and CA5043). On balance, Canadian pork exports for 2005 are forecast to increase by about 10%-11% on the strength of increased exports to most major destinations other than the United States.

Imports: Pork imports during 2004 reached 104,838 metric tons carcass weight equivalent, up 15.5% over the 2003 level, led by increased imports from the United States which rose 21.3% over the year earlier level to 101,503 metric tons. It marked the first time that U.S. pork exports to Canada exceeded the 100,000 metric ton level since the late 1970s.

For 2005, Canadian pork imports are on pace to register another substantial year over year increase. In the January to June period of 2005, total Canadian pork imports were almost 37% higher than during the first half of 2004. Imports from the United States during the period rose 30% above last year’s first half level. In addition, Canadian imports from Denmark in early 2005 increased sharply. On balance, total Canadian pork imports in 2005 are forecast to reach a range of about 130,000-135,000 metric tons.

Policy Update

Hog Traceability
Canada’s cattle industry has enforced a traceback system for cattle since July 1, 2002 through the Canadian Cattle identification Agency. The Canadian Pork Council (CPC) and the provincial pork organizations have been proactive in the development of an identification (ID) and traceability system for the Canadian hog industry. The target date to fully implement a hog traceability system is summer 2008.

U.S. Trade Case Against Canadian Live Swine
On April 6 2005 the United States International Trade Commission (ITC) determined that the U.S. hog industry is not materially injured or threatened with material injury by imports of live swine from Canada. The ITC Commissioners ruling was unanimous. The ITC’s upcoming public report entitled Live Swine from Canada (Investigation No. 731-TA-1076 (Final), USITC Publication 3766, April 2005) contains the views of the Commission and information developed during the investigation which commenced on March 5, 2004. The original petition for countervailing and anti-dumping actions against Canadian live hogs was filed by filed by the National Pork Producers Association, state pork organizations, and individual U.S. producers.

Further Information

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Source: USDA, Foreign Agricultural Service - Annual Livestock and Products Report - August 2005