Porcine epidemic diarrhea (PED) could turn out to be a blessing in disguise for Canadian hog producers who have been hit hard by the U.S. country-of-origin labelling law — if they can keep the disease off their farms.
“With the PED situation, there is a temporary reduction in the COOL impact,” said Martin Rice, executive director of the Canadian Pork Council.
The hog industry has lost roughly $400 million a year in exports to the U.S. since the labelling law, or COOL, was enacted in 2008.
“It essentially shut off 80 or 90 per cent of the customers that we had for Canadian slaughter hogs,” said Rice.
With “very few buyers in Canada” and the pending closure of one of Ontario’s largest pig slaughterhouses, Canadian producers have increasingly limited marketing options. That’s pushed down prices and limited herd expansion in this country, he said.
But as PED continues to spread south of the border, the disease is “limiting and even causing contraction” in U.S. hog supply, even though pork prices have shot up more than 30 per cent in the past year, said Rice.
“Under normal circumstances, these prices would be generating significant expansion, (but) U.S. hog supplies are going to remain significantly lower than they would normally be.”
That trend will continue later into this year, when the impact of PED will be the greatest, said Rice.
Canadian producers, on the other hand, have seen a “reasonable level of stability” in their production despite PED arriving into the country in late January, and are even seeing some benefits from the disease.
“There’s more opportunities for those exporting feeder pigs,” said Rice. “The PED situation has made those much more marketable than in the past.”
As long as hog producers stick to strict biosecurity protocols and limit the spread of the disease, they should enjoy favourable prices “for several quarters,” he said.