A Des Moines, Iowa based agricultural economist suggests new U.S. Mandatory Country of Origin Labelling rules could result in the loss of U.S. pork processing capacity and a drop in U.S. pork exports.
The final rule for U.S. Mandatory Country of Origin Labelling, which came into effect March 16, has prompted the majority of U.S. pork processors to announce they will phase out the purchase of Canadian origin pigs.
Paragon Economics president Dr. Steve Meyer told those on hand yesterday for Manitoba Pork Council’s annual general meeting the reaction of U.S. consumers will determine where things go from here.
The hesitancy of U.S. packers to buy Canadian sourced pigs is based on U.S. retailers saying that they only want U.S. product and that’s based on a belief that their consumers only want U.S. product.
If we get down the road and they find out that U.S. consumers either don’t care or certainly don’t care if it’s from the U.S. and Canada then that will get fed back up and packers will say O.K. the only problem we have to deal with is the segregation parts and I think that’s manageable for many packers in the U.S.
If they’re having problems utilizing their plants fully on the amount of U.S. pigs available to them, they’re going to go ahead and add the Canadian pigs back in in order to get plant utilization up.
If, on the other hand, it really blocks a lot of pigs from coming from Canada I think we could lose a plant.
It probably won’t be this year.
It’ll be down the road somewhere but it could cause a plant to close somewhere in the U.S.
Dr. Meyer notes, in the past, eight to nine percent of the hogs processed in the U.S. originated in Canada and any reduction in those numbers will mean less pork available for export and, with more Canadian pigs being processed in Canada, Canadian processors will be able to capture some of those export opportunities.
However, he says, the fear is that the U.S. will increase sow numbers to compensate which could result in an overall excess of North American pork.
Source: Farmscape.Ca
