Canada worker, hog shortages leave industry squealing

Tue Oct 14, 2014 2:13pm EDT
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By Rod Nickel and Theopolis Waters

WINNIPEG Manitoba/CHICAGO (Reuters) - Shortages of hogs and packing plant workers in Canada, exacerbated by recent government restrictions, may severely cut hog processing and pork exports, helping to keep North American retail pork prices near record highs.

Farmers in Canada, the world's third-biggest pork shipper, are also bracing for the spread of a deadly virus that has killed millions of piglets in the United States.

Further dwindling of Canadian supplies would especially reverberate in the United States, which relies on young Canadian pigs for fattening and slaughter, and in markets as far away as Japan and South Korea that import Canadian pork.

"If those Canadian pigs don’t flow south, you’re going to have U.S. hog farmers bidding against each other to get pigs," said University of Missouri livestock economist Ron Plain.

Porcine epidemic diarrhea virus (PEDv) spread to Canada last winter and has been detected in several Canadian provinces, most notably at dozens of Ontario farms and four in Manitoba.

Chicago lean hog futures hit an all-time high in summer and have since eased as U.S. farmers rapidly rebuild their herds from losses to disease, but they remain at historically high levels.

A disruption in Manitoba's exports of 2.5 million feeder pigs annually to the United States would slow those efforts and lift prices. But such a threat has flown below the market's radar.

"I haven’t heard anyone bring up Canadian hogs at all," said Chicago-based JBS Trading Co president James Burns, adding that the market focused on the virus' impact on U.S. supplies. "And over the past few years, Canada has significantly reduced their herds, so I think we lost interest in them a little bit."   Continued...

Baby pigs are in their pen on a small farm outside of Calgary, Alberta in this April 2, 2009 file photo. REUTERS/Todd Korol/Files