Glacier FarmMedia – Canadian hog producers were on the path to good times before Chinese complications and COVID-19 derailed producers, Statistics Canada analysis shows.
However, the recovery of the North American packing industry since the pandemic shock and the return of China to buying Canadian pork have reversed some of the damage.
Why it matters: As some markets ebb and new markets pop up, it’s important producers and marketers understand the trends if they are to maintain stable sales.
“After the reopening of the Chinese market, producers in Canada were quick to respond,” said StatsCan analyst Jeff Archer.
There is a “pretty clear relationship between exports to China and our fresh and frozen price.”
Canadian pork exports were surging from December 2018 to May 2019 as China’s enormous pig herd was devastated by African swine fever and its people’s enormous hunger for pork saw it suck in huge amounts of foreign pork, including Canada’s. Canadian exports to China increased 83 per cent, creating an overall 28.5 per cent increase in Canadian pork exports.
That all changed for Canada, however, when China announced an effective ban on Canadian pork due to alleged ractopamine presence. Canadian pork exports to China began collapsing in June 2019 and had dropped by 98 per cent by July. That situation continued until November, when China reopened its market to Canadian pork. An ever-increasing river of pork flowed to China from November 2019 to April 2020, when it levelled off at a higher level than it had been pre-May 2018.
The price of pork in Canada shows the influence of China’s demand, increasing in the periods when Canadian exports to China increased and slumping when that access was cut off.
Between February and May 2019, Canadian fresh and frozen pork prices rose 21.8 per cent.
“Impacts to their pork sector can have a very big influence on ours,” said Archer.
COVID-19 also buffeted the industry, with U.S. pork plant closures and the lockdown of restaurants and food service leading to a sudden slump in pork demand.
However, that demand also bounced back and Canadian sales recovered once the shock of the pandemic had passed and consumers and processors could get back to more normal ways of functioning.
Where does the industry and market go from here? Archer said there are too many unknowns with the progress of COVID-19 to know. That’s having an impact on the market.
“We’re seeing a lot of volatility and instability in the markets due to COVID-19 right now and the market seems to be still trying to adjust to what’s going on,” said Archer.
This article was originally published at The Western Producer.