Feeder Pig Exports Still Growing

ONTARIO - Feeder pig exports continue to grow, although that growth is becoming increasingly volatile.

13 March 2003

3 minute read

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When Statistics Canada releases its final tally, it will find that more than 1.6 million feeder pigs and early weans left Ontario for the US in 2002, up 26% from a year earlier. With just over 5.05 million market hogs sold in Ontario in 2002, nearly ¼ of pigs born in Ontario were finished in the US.

While growing feeder pig exports offer more evidence that the hog industry is a vital and growing part of the Ontario economy, the scope of the issue highlights challenges for other parts of the industry.

This past year monthly feeder pig exports have fluctuated wildly from month to month. For example, a record breaking pace of 146,000 animals in January 2002 was followed by sharp decreases in February and March; then when monthly feeder pig exports averaged just over 130,000 animals from June to September, more than 171,000 feeder pigs left Ontario for the US in October.

The volatility makes it hard for Ontario processors (who also grew rapidly in 2002) to predict how many market hogs will be available to process domestically.

Futures prices are having more of an impact on flows of feeder pigs. The relatively light pace in the summer was accompanied by low futures prices, but as soon as futures rallied in the October, light pigs crossed the border at an unprecedented pace.

While futures prices have generally moved lower since the beginning of the year, the data it isn't yet clear whether more feeder pigs will be finished in the province.

More potential challenges face the industry as a result of US Country of Origin Labeling requirements, which will become mandatory in September 2004. The law will require US finishers to document where each pig was born and raised.

This has the potential to dramatically increase the cost to US producers of buying animals from Canada, and possibly lower the price producers are willing to pay for Canadian feeder pigs.

In the meantime, the future of the Canadian and US hog industries continues to be closely intertwined.