Canadian Pork Producers in a world of hurt as trade wars, tariffs escalate
By Tim Kalinowski
The long-suffering western Canadian pork industry has had one of its toughest years in awhile, and there isn’t the dangdest thing thing they can really do about it, says Alberta Pork executive director Darcy Fitzgerald.
“When the U.S. put aluminum and steel tariffs on Canada, Mexico and China, it caused reaction back in those countries where we put tariffs back on the U.S. to counter those,” explains Fitzgerald.
“Essentially that caused the price of pork to drop because Mexico and China put tariffs on pork products coming from the U.S.
“Meanwhile in Canada, we base our price off the U.S. so that dropped our price even though there was no tariffs on Canada.
“Our prices effectively dropped by about 30 per cent, and our producers then started to lose money just like the U.S. industry.”
Prices have improved a bit in recent months, but the Canadian pork industry as a whole is still deep in the red, says Fitzgerald.
“We are still feeling the pain. Our prices have come up a little bit, more because of the effect of African swine fever in China, in Europe, and that has caused the marketplace to say maybe there will be a shortage, and we will have to sell more to fill that void.
“But we are still in the negative right now, and a lot of that has to do with the tariff situation we have in front of us.”
One bright light to emerge out of a pretty dark year, says Fitzgerald, is the signing of the new USMCA agreement.
“For us, we are continuing on with business as usual,” he explains. “There may be other things for others, but we are looking at this new agreement as being kind of what we had before.
“NAFTA was a good deal from the beginning for us to allow trade back and forth, and we had hoped for a few things to be tweaked with inspecting trucks going across the border, and that kind of thing, but that unfortunately hasn’t changed yet.”
Still, the pork industry will take it, he says.
“Canadian pork producers have a trade surplus over their American counterparts,” states Fitzgerald, “and that will continue without impairment.”
In fact, international trade and trade agreements aren’t really problem for the Canadian industry, Fitzgerald states, as pork is increasing in demand and there is a huge international market that needs to be filled.
The problem is the domestic situation in Canada in terms of packing and price which leaves western Canadian producers with the short end of the stick in terms of profitability and price.
“We ship over 70 per cent out of the country because we don’t get a pork price in the country,” states Fitzgerald. “A lot of imported product comes here at a reduced price; so from the producer’s standpoint the packer gives us less money and there are few options for us— we have to deal with the few packers we have here. The prices in the U.S. and Eastern Canada are quite a bit higher than the prices in Western Canada.
“And we are the closest to market, of all things; so we really need to do some work on that.
“We work quite well together outside the country through Canada Pork International,” he adds, “but somehow we don’t seem to work well inside the country domestically when it comes to pricing and some of the other things we do.”