Pork exports set new 2011 record, 2012 seen down

Canadian exports of fresh, chilled and frozen pork established a new record during calendar year 2011, but are unlikely to match that level in 2012, according to an official in the industry.

"Demand for Canadian pork products from China, South Korea and Russia were spectacularly strong in 2011 and helped to fuel the record level," said Martin Rice, executive director of the Canadian Pork Council.

Canadian pork shipments during 2011 came in at a record 1.15 million tonnes, which surpassed the previous record of 1.1 million established during calendar year 2010, Rice said.

South Korean demand for Canadian pork products increased 70 per cent in 2011 from the 2010 level, with the outbreak of foot-and-mouth disease in that country behind the jump in import demand, Rice said.

Improvements in income and increased demand for meats, resulted in China’s demand for Canadian pork rising by roughly 35 per cent over the 2010 level. Russian demand for Canadian pork rose by 60 per cent in 2011 from 2010, Rice said.

"If it weren’t for those countries, shipments of Canadian pork might have been lower, especially since demand from several of Canada’s usual importing countries declined," he said.

Canadian shipments of pork products to big markets such as Mexico and Australia actually fell in 2011 from the 2010 levels. Canadian pork exports to the U.S. and Japan were also down, but the setback was smaller in comparison, Rice said.

"The U.S. has been and will continue to be a reliable market for Canadian pork products," Rice said, noting that outlets such as South Korea are only seen as temporary with demand fading once that country has the foot-and-mouth disease issue under control and the rebuilding of the hog herds begins.

"Little interest"

Rice noted that Canadian pork exports in calendar year 2012 will be hard pressed to match the record 2011 level, given that Canada’s production of live hogs remains stagnant, if not still declining.

"There have been a lot of producers who have gotten out of the hog production industry because of negative profit margins over the past couple of years, and there continues to be little interest in expanding production at this time," Rice said. "As a result, weekly hog slaughter capacity in Canada at the processors has been reduced."

Rice estimated that current hog slaughter capacity at the processors is roughly 340,000 to 345,000 hogs a week, down one per cent from the 2011 weekly average.

Demand for pork products from the domestic sector have also been slowly declining, as U.S. pork products were out-competing Canadian pork, Rice said.

Canada’s exports of live hogs to the U.S. were also on the decline heading into 2012, Rice said.

He pointed out that barrow and gilt exports were down 16 per cent from where they were a year ago at this time, based on a three-month period.

"We are currently seeing roughly 15,000 live hogs for the U.S. slaughter market being shipped each week and roughly 95,000 isowean piglets for finishing in the U.S. feeder market being shipped on a weekly basis," Rice said.

On a cumulative basis, that represents a two per cent decline, he said.

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