Canada Markets

Industry Looks to Government for Support

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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According to Statistics Canada data for June, Canada's exports of all pork products to China, by weight, fell 38.4% from the previous month to the lowest level in five months, with more declines to follow. (DTN graphic by Cliff Jamieson)

While this week's ban by China on agriculture imports from the United States is referred to as a "body blow" to the industry, pressure is also mounting on the Canadian government to resolve differences with China.

On Aug. 6, Jim Carr, the federal minister of International Trade Diversification met with pork industry participants in Winnipeg. The government's statement following the event shows a focus on the government's commitment to ending the issues affecting trade between the two countries, while also pointing to the government's initiatives to support Canada's industry. On July 25, the federal government made available up to $6 million to Canada Pork International to "strengthen, diversify and grow" exports.

Also on Aug. 6, Ontario's minister of agriculture released a letter that appeals to the federal government for compensation for that province's meat producers, with that province's hog processors facing losses up to $15 to $30/hog. As well, the provincial minister has appealed for the federal government to "make maximum use of our World Trade Organization rights" in challenging China's actions. This move follows concerns expressed by the country's premiers in a meeting held in Saskatoon in July.

In an e-mailed statement from federal Agriculture Minister Marie-Claude Bibeau to ipolitics.ca, the federal government focused on the existing trade agreements already in place with other countries in order to replace lost sales, changes to the cash advance program as well as changes to insurance coverage through AgriStability, which are likely far from the response the industry is waiting for.

The attached chart shows the trend in Canada's pork and pork product exports to China since January 2018, as reported by Statistics Canada. Exports in the January through May period in 2019 were 56% higher than the same period in 2018, measured in volume. The Canadian Pork Council reports $514 million worth of pork products were sold to China in 2018, while the CPC told the Globe and Mail this week that the country was on track to reach $1 billion of exports in 2019 prior to the ban placed on Canadian meat imports in late June.

As seen in the chart, the volume of pork products exported in June fell 38.4% from the previous month, and remains poised to fall further given the ban that was announce in late June.

As a result, the Canadian Pork Council states: "The suspension of the pork trade with China immediately injected a significant level of instability and uncertainty in our industry" and "... in turn, this instability impacts producer's confidence in the market and their willingness to invest in both the maintenance and/or growth of their farms."

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Cliff Jamieson can be reached at cliff.jamieson@dtn.com

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(CZ)

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