The final rule for US Mandatory Country of Origin Labelling, which came into effect 16 March, has prompted the majority of US pork processors to announce they will phase out the purchase of Canadian origin pigs.

Paragon Economics president Dr. Steve Meyer told those on hand yesterday for Manitoba Pork Council's annual general meeting the reaction of US consumers will determine where things go from here.

Dr. Steve Meyer-Paragon Economics

The hesitancy of US packers to buy Canadian sourced pigs is based on US retailers saying that they only want US product and that's based on a belief that their consumers only want US product.

If we get down the road and they find out that US consumers either don't care or certainly don't care if it's from the US and Canada then that will get fed back up and packers will say OK. The only problem we have to deal with is the segregation parts and I think that's manageable for many packers in the US.

If they're having problems utilizing their plants fully on the amount of US pigs available to them, they're going to go ahead and add the Canadian pigs back in in order to get plant utilization up.

If, on the other hand, it really blocks a lot of pigs from coming from Canada I think we could lose a plant.

It probably won't be this year.

It'll be down the road somewhere but it could cause a plant to close somewhere in the US.

Dr. Meyer notes, in the past, eight to nine per cent of the hogs processed in the US originated in Canada and any reduction in those numbers will mean less pork available for export and, with more Canadian pigs being processed in Canada, Canadian processors will be able to capture some of those export opportunities.

However, he says, the fear is that the US will increase sow numbers to compensate which could result in an overall excess of North American pork.