Farm-Scape, Episode 1625

Sask Pork warns a pending American antidumping duty could actually encourage increased Canadian live hog exports to the US in the short term and expanded Canadian finishing and processing longer term.

The US Commerce Department announced a 14.06 percent preliminary antidumping duty on live Canadian hogs last week.

While the levy will take a bite out of the price Canadian exporters receive in the US, there's also the expectation that Canadian packers will cut their prices.

Sask Pork General Manager Neil Ketilson says it's too soon to be sure how duty will impact prices but, as it becomes evident, Canadian producers will be exploring options.

"In terms of strategies pork producers should or could be thinking about, one comes to mind right away in the event domestic prices go down in Canada.

Because this is an initial ruling, there is an opportunity to get that levy back if it goes in our favor in March.

I'm sure there would be some producers saying, 'I'm going to the United States and take my chance on getting that levy back if it works in our favor,' as opposed to, 'if the price is down here, they are guaranteed they won't get that money.'

Longer term, if we have a levy of that nature and our Canadian prices drift to those kinds of levels, I think there will be a number of producers looking at what the cutout is and the what the opportunity is to sell the pork vis-a-vis the live animal.

They'll want to see if they can get involved in the value chain and derive their price from greater than just the door of the packing house and the live animal and try to get into more of the cut processing end of the business."

Ketilson says the duty may end up forcing Canada to become more aggressive in competing with the US on the international market if and when we become capable of processing the animals in Canada at home.

For Farmscape.Ca, I'm Bruce Cochrane.