The introduction of U.S. Mandatory Country of Origin Labelling has prompted several major U.S. packers to stop processing Canadian origin pigs, diverting slaughter hogs to Canadian plants for processing and prompting many American producers who had been buying Canadian weanlings to cancel contracts.

Manitoba Pork Marketing Co-op CEO Perry Mohr says, as a result, many Canadian weanling producers have de-populated their breeding barns.

Perry Mohr-Manitoba Pork Marketing Co-op

I think many of them looked to see what their options were, one of which was finding finishing spaces and finishing them out and getting them slaughtered in Canada but, when you look ahead to getting them slaughtered in Canada, there's not any surplus capacity right now.

So these producers have chosen to empty their barns.

I think many of them feel that, long term, they should have some potential to start those barns back up and start shipping hogs into the U.S. again and or finishing them here in Manitoba and selling them into the Canadian market place.

And that may be the case down the road.

I believe and I think many in the industry believe and even some of our American counterparts believe that, over time, the American processors, particularly next spring when supplies are typically a little bit light, and based on all of the inventory reports that they will be lighter than normal heading into next spring, that the U.S. packer will find a way to deal with these Canadian pigs and this won't be nearly as much of an issue as it is today.

Mohr notes there are those who believe that, as was witnessed with the cattle industry when Canadian cattle were restricted from flowing into the United States, many packing plants closed.

He says some people feel that's possible on the hog side as well and that we may see some processing capacity disappear in the U.S. as a result of decisions being made today.