To say the hog industry in Canada has struggled in recent years would be kind. Consolidation, low to negative margins, labeling requirments from the U.S. and a moratorium in Manitoba have weighed heavily on the industry. So it’s not a surprise that Friday’s announcement of a signed Comprehensive Economic and Trade Agreement (CETA) with the European Union was music to the ears of Martin Rice, executive director of the Canadian Pork Council.
“It’s very good news, yes,” Rice said Friday afternoon in a phone interview, perhaps only somewhat groggily as many in Ottawa had been up since 4 a.m. waiting on final details and hammering out a signed deal overseas in Europe.
The deal, yet to be approved by the provinces or the EU member states, includes an added 80,000 tonnes per year of pork cuts into Europe from Canada. Well, it means that eventually. Rice notes that this access would be phased in over time, which is good, seeing as in order for Canada to capitalize on this added capacity several processing plants will have to complete the process of being a CFIA-inspected plant to EU code. Canada currently could service about 20,000 tonnes of pork demand through its EU-certified plants.
Rice says that inspected processing capacity is just one of two big items on the Canadian hog industry’s To-Do list: the European market will not accept meat from animals who have been fed beta agonists (a feed additive), and all meat would be monitored for growth promotants. Production of animals that meet these demands would need to ramp up. Rice points out that the EU does use feed additives that we do not use in Canada, but all Canadian-approved feed additives are a no-go. (Canadian beef destined for the EU must also be growth promotant-free as well).
While this 80,000 tonnes is a “new” market for various pork cuts, mostly hams and shoulders, it’s won’t necessarily require production that’s over and above what Canada already has. “This will add more value per carcass,” Rice says, “but not require expansion of the industry.” The CETA deal will also help to fill some gaps of being shut out of Korea recently, he says, and Russia’s demand has been less than dependable. Nonetheless, this is new demand, and that added value per carcass is estimated to tally up to nearly $400 million per year for Canada’s pork industry, once all is said and done. Good news, indeed.