Long-term market outlook appears promising for pork and beef

Demand for Canadian beef was up by 17 per cent in 2019 over 2018

Meat market experts for beef, turkey and pork say demand was strong in the first part of 2020 and further gains could come if livestock sectors successfully navigate their way through COVID-19.
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Glacier FarmMedia – The outlook is cautiously optimistic for Canadian beef and pork trade, say industry experts, so long as the worst effects from the pandemic are over.

Fawn Jackson of the Canadian Cattlemen’s Association, Phil Boyd of Turkey Farmers of Canada and livestock and meat market analyst Kevin Grier each said demand for beef, turkey and pork was strong in the first part of 2020 and further gains could come if livestock sectors successfully navigate their way through COVID-19.

But there are plenty of variables, they added.

“Last year our (beef) trade was up around 17 per cent in value over 2018 and we were hoping to see that trajectory continue,” said Jackson, the CCA’s director of government and international relations, during a webinar organized by the Canadian Animal Health Institute.

“We know that international demand is going to continue for Canadian beef but it’s about how do we get those animals processed and if there is a second wave, how do we survive that?”

Jackson said she thinks the industry has come through the most difficult part of pandemic fallout by recognizing the issues and implementing solutions.

Grier also sounded positive notes for the pork sector, among them the latest Statistics Canada figures on per capita consumption.

“It showed once again pork demand in Canada is very strong. There’s a lot of positive news with regard to red meat demand in Canada and 2019 was a big positive for pork. The other positives are that in nine of the last 10 years, the hog sector has seen positive margins.”

Grier noted a number of pork processors recently expanded their operations due to good profit margins in that sector and “the entire industry went into 2020 looking very optimistically with regard to export prospects as well.”

Then came COVID-19, which drastically reduced pork demand in China and then caused processing plant disruptions in the United States. Disruptions in food service demand played a further role.

“At this point it’s bad in Canada but not nearly as bad as in the United States,” said Grier, where about three million finished hogs are in the system awaiting processing.

Disruptions also damaged the supply chain for supply-managed Canadian industries, said Boyd, executive director of the TFC. Disruptions in restaurant trade and full-service deli and retail outlets reduced demand.

Boyd said the TFC has implemented a seven per cent reduction in volume for the coming year to ease pressure and other supply-managed commodities are taking similar steps.

For hogs and cattle, much will depend on slaughter plants’ ability to improve and maintain worker safety so they can regain previous production levels.

Longer term, Jackson said full recovery on the trade side will depend on whether countries become more protectionist or if markets become more volatile as a result of the crisis.

“Some of that is hard to anticipate, but I would say that we are expecting that to be more volatile than it has been in the past, so needing to make sure that we have systems that are resilient, to be able to adapt so that if there are temporary or longer term trade disruptions that we are able to send product into a diverse number of markets.”

Grier said Canadian pork trade improvements depend in large part on China, “a carrot that’s always out there we never seem able to grab.”

Supply-managed sectors don’t rely on international trade. For them, concessions given in various international trade agreements remain a concern, said Boyd.

Recovery of those sectors post-COVID will depend on how quickly consumers return to grocery stores and whether their economic situation will allow a full resumption of usual food purchases.

This article was originally published at The Western Producer.

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