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Prairie Swine Centre is an affiliate of the University of Saskatchewan
Prairie Swine Centre is grateful for the assistance of the George Morris Centre in developing the economics portion of Pork Insight.
Financial support for the Enterprise Model Project and Pork Insight has been provided by:
Martin Rice on what you need to know about pork export markets and trade agreements -Banff 2016
Posted in: Economics, Pork Insight Articles by admin on May 3, 2017
No other pork-producing nation in the world has the kind of dependence on exports that Canada does. Over two thirds of Canadian pork production is exported, excluding live pigs, and almost
half of all production is going to non-U.S. markets. Canada is currently the third largest exporter of chilled pork in the world. As well, pork consumption in Canada has declined during this period. This is an enormous exposure to risk on the export side of things.
“The reason trade matters for the pork industry becomes clear when you take a look at all of the cuts and products that come from one carcass,” says Rice. There are products such as offal or variety meats that may go for pet food in Canada. But in China or Japan, these are highly sought after and are priced accordingly. “There is an enormous contribution to the cutout value of the carcass, to be able to sell these variety meats to markets that value them,” says Rice. This is why trade agreements are so important for the Canadian pork industry.
There are a number of trade agreements Canada has currently signed or is pursuing. The most important of these are the WTO, the Canada-EU agreement and the Trans Pacific Partnership (TPP).
Regarding the TPP Rice says “we are quite confident that within five years of implementation, we will see additional exports to Japan in excess of $300 million per year.” However the Canadian market must be cautious about relying on these trades as estimates from the Japanese ministry show the population declining from the approximately 127 million people today, to around 80 million people in the next 40 years. This will impact demand for export products significantly.
The Canadian Pork Council also want producers’ input on what value they see in some of these practices and programs. Is it worth it to producers to focus on the export markets?
Martin Rice on what you need to know about pork export markets and trade agreements -Banff 2016