When looking at the overall picture, protein markets have battled the last while, amid rising costs, plant closures and export hiccups. But retail prices have also climbed, with consumer demand keeping pace here at home. For the hog industry, the result has meant a return to decent margins, but trouble could be brewing on the horizon, says Kevin Grier, of Kevin Grier Market Analysis and Consulting.
Whether or not a return to profitability pushes an expansion of the hog herd in Canada is unlikely, says Grier, though similar conditions in the U.S. could see a re-building of hog numbers.
Why the difference? Several reasons, as he explain in the audio below, but one is that Canada has focused too much on export markets and neglected domestic consumption.
Exports to China have been the biggest disappointment, and the rest of the world knows that we’re vulnerable because of it, removing leverage in other markets. Then, here at home, Grier says that pork has been losing the battle for front-page retail promotions up against chicken and even beef.
“We’ve exported 70 per cent of what we produce, and we did so at the expense, I think, of our domestic market. So domestic pork availability wasn’t quite there, and so I think that’s backfiring on our industry right now. I think [retail focus has been] just so-so because our retailers have said, you know, well, the hell with it, it’s not here, it’s not available.”
