Canadian hog producers getting squeezed by C.O.O.L.

by Bryan Salvage
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OTTAWA, ONTARIO – While losses continue to mount on Canadian hog farms, tempers also continue to rise regarding the recent implementation of mandatory Country-of-Origin-Labeling in the United States.

Canadian hog producers continue to battle an unprecedented period of losses on their farms, according to Jurgen Preugschas, chairman of the Canadian Pork Council, during his March 5 appearance before the House of Commons Standing Committee on Agriculture and Agri-Food as a witness to the committee's study on the Situation of the Red Meat Sector.

"While the crisis was set in motion by rapidly-rising exchange rates and high feed costs, these variables have moderated," he added. "Unfortunately, they have been replaced with the global economic crisis resulting in reduced access to credit and the United States' introduction of mandatory Country-of-Origin Labeling."

Many Canadian producers have left hog farming, he said. There has been a dramatic decrease in the number of farms reporting hogs over the past two years. "In 2009, 13.7% fewer farms reported hogs than in 2008, and in 2008 there were 11.3% fewer than in 2007," he added. "Furthermore, there are now 28% fewer farms reporting hogs than in January 2006. Hog inventories have also decreased in January of this year by 10.2% from January of last year, and a full 18% from January 2006."

C.P.C. representatives reminded the committee that while they are trying to remain optimistic about the long-term potential for the Canadian hog sector, it is increasingly difficult to be prepared for and manage the shocks that continue to hit the hog sector – with C.O.O.L. being the most recent and pressing challenge.

"The Canadian government must communicate our concerns regarding the voluntary-labeling regime to the White House as soon as possible, before U.S. processors are forced to make business decisions which will have market-closing effects on Canadian hog and pork exports," said Martin Rice, C.P.C.’s executive director. "In addition, detrimental impacts on hundreds of U.S. hog farmers who depend upon Canada for their feeder pigs and on many U.S. processors who rely on Canadian hogs and pork will also be felt."

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