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Export market key to real growth for Canada's pork industry

by 5m Editor
23 January 2006, at 12:00am

BANFF - The Canadian pork industry should get past debates over export dependency and focus more on quality and efficiency to get the most out of that growing market, says a senior market analyst.


"We still have trade 'handwringers' who worry we're too reliant on the export market, particularly the U.S.," says Kevin Grier of the George Morris Centre, speaking at the Banff Pork Seminar, a leading annual industry seminar. "It's time to get over it. Exporting is what we do."

Canadian pork exports are now greater than domestic consumption, and all signals point to exports as the source of future industry growth, says Grier. The domestic industry is stable and valuable but exports are the source of growth and expansion. "Unless Canadians double their appetite for pork, we need to focus on exports or the pork industry would have to become about 50 percent smaller."

Rather than a risk, Canada should consider its strong export foothold a major advantage and leverage that into further growth opportunities, he says. The industry's success over the last 15 years has been based on quality, efficiency, productivity and entrepreneurship. Those factors continue to represent the greatest opportunities to boost the profitability of pork producers and their industry.

"There are many ways to measure success, but one of them is growth," says Grier. "Canada's success in these areas is manifested in the fact that it has become a world leader in pork exports."

In terms of risks to Canada's domestic and export markets, Grier outlined key challenges.

"We are competitive at the producer level, even though we face challenges such as feed costs and environmental regulations," says Grier. "However, the numbers would indicate we face competitive challenges at the packing plant level. Large numbers of slaughter hogs move annually to the U.S., which indicates U.S. plants are more competitive than Canadian ones."

The most telling figures are those on scale of production, he notes. There are 29 packing plants in Canada and 12 of those handle less than 12,000 head per week. Only three plants are over 40,000 head per week. By comparison, the largest U.S. plants are much greater in scale than the major Canadian plants, and all the major U.S. plants operate with a double shift.

"Our research shows double shifts save at least $5 per head, and in a competitive market that margin goes to producers."

There's no doubt labour and other factors affect scale of operation in Canada's pork processing industry, he says. "But the reality is Canada's largest beef processing plants, which are owned by U.S.-based interests, routinely double shift. Market statistics show that they are among the most efficient of North American plants in their industry."

On the domestic front, the industry has a strong and reliable market, he says. This is mirrored by the U.S. market, Canada's largest export destination. "In both of these markets, declining demand is a minimal risk, so long as we continue to focus on the quality and safety of the product."

The Banff Pork Seminar, held annually since 1972, is one of the premier pork seminars in North America. The Seminar is co-ordinated by the Department of Agricultural, Food and Nutritional Sciences, University of Alberta, in co-operation with Alberta Pork, Alberta Agriculture, Food and Rural Development and other pork industry representatives from across Canada. Full program and proceedings of the 2006 Banff Pork Seminar are available on the new Seminar Web site, www.banffpork.ca.

ThePigSite News Desk

5m Editor