Big Picture Positive for Canadian Pork Producers

CANADA - An Ontario based livestock market analyst says despite challenges the big picture for the Canadian pork industry is positive, writes Bruce Cochrane.
calendar icon 27 January 2015
clock icon 3 minute read

"The State and Future of Domestic Pork Producers and Processors" was discussed last week as part of the 2015 Banff Pork Seminar.

Although Canada ranks as about the world's sixth largest pork producer, it's the third largest pork exporter, selling about 60 per cent of its production internationally.

Kevin Grier, an Ontario based livestock market analyst, observes the Canadian pork industry has maintained its share of the global market for pork at 15 to 20 per cent in spite of strong competition from the US and Europe and despite relatively stable production has managed to grow exports.

Kevin Grier-Kevin Grier Market Analysis and Consulting:

I think the data gathered by independent sources around the world have shown that Canada at the production level is a very competitive production area globally.

We rank among the least cost producers amongst all the major producers.

We're among the least cost and so from a productions perspective Canada is a very competitive nation.

I think where we start to run into some problems is at the processing level.

Our costs are not quite as low as the American costs, our margins aren't quite as good as the American margins, we don't get as much value from our by-products as the Americans do so in terms of the overall structure of the industry at the producer level that can ebb and flow but generally it's a reasonably favorable picture globally and I think the challenge in the chain would exist at the processor level, largely I suppose in some respect due to the lack of economies of scale in Canada.

Mr Grier suggests, when you look at what Canada has in terms of arable land, water, infrastructure and a producer base that's weathered a terrible seven or eight years, the big picture is positive.

However, he says, factors such as the moratorium in Manitoba, increased energy costs in Ontario and added costs for programs such as PigTrace make our industry less competitive and will hold us back in our ability to expand relative to the United States.

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