Canada and China have already enacted retaliatory tariffs while Mexico will announce its plans by March 9.

The April live cattle contract rose 1.900 U.S. cents per pound to end Wednesday at 196.550. The day’s high of 197.225 was unseen since Feb. 13.

The April feeder cattle contract gained 3.575 cents/lb. at 276.075, its biggest one-day gain since Feb. 24.

The U.S. Department of Agriculture reported a decline in wholesale boxed beef prices on Wednesday afternoon, with choice boxes down $1.13 at $313.54 per hundredweight and select boxes losing $1.49 at $302.53.

After hitting a six-month low on Tuesday, April lean hogs moved upward by 2.350 cents/lb. at 84.700.

The USDA also reported that the U.S. cattle herd totaled 86.7 million head on Jan. 1, down from 87.2 million one year earlier. The Canadian herd was at 10.9 million, down from 11 million.

There were 75.8 million hogs and pigs in the U.S. as of Dec. 1, 2024, up from 75.4 million on Dec. 1, 2023. In Canada, there were 13.9 million hogs and pigs as of Jan. 1, down from 14 million.

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“The Canadian Pork Council is actively engaged in discussions with the federal government to assess the potential impacts of the U.S. tariffs on Canada’s pork industry,” said René Roy, chair of Canadian Pork Council, in an email to the Manitoba Co-operator.

“Our priority is to safeguard the competitiveness of Canadian pork producers and maintain stability across the sector. We continue to advocate for solutions that will mitigate financial strain and protect market access for our producers.”

The 25 per cent tariffs on Canadian and Mexican imports and a 10 per cent tariff on Canadian energy took effect on Tuesday.

Cam Dahl, general manager of Manitoba Pork, said they are looking at how to protect producers and others who work in the pork industry. He said he couldn’t share the details of discussions taking place with the Province of Manitoba or with Ottawa, or what potential relief efforts for producers might include.

“How do we protect those jobs, so that when we come into a recovery when the tariffs are lifted, they’re still there?” Dahl said. “I don’t know the answer to that yet.”

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Proposition 12, which requires pig confinements to be large enough for animals to turn around, was passed by ballot initiative in 2018 and was upheld by the U.S. Supreme Court in 2023.

The U.S. pork industry has said the law burdens pork producers and would not improve animal welfare. It has called on Congress to repeal Prop 12 through federal action.

The Canadian hog sector has expressed concerns that–as Canadian swine housing standards may not meet the letter of Proposition 12–it and similar laws will have negative effects on Canadian producers. Canadian producers export millions of pigs to the U.S. each year.

The Biden administration had supported the industry’s position before the Supreme Court.

“If we don’t take this issue seriously, we’re going to have chaos in the marketplace,” Vilsack said.

“When each state has the ability to define for itself and its consumers exactly what farming techniques or practices are appropriate, it does create the possibility of 50 different sets of rules and regulations,” he said.

Prop 12 was fully implemented as of Jan. 1, 2024.

Economic effects muted

Earlier this year, agriculture economist Dan Sumner from the University of California Davis agreed with Vilsack’s assessment that state-specific regulations could complicate the sector.

“It becomes a real mess and then it starts to really have national implications or North American implications,” Sumner told a Jan. 10 agricultural outlook webinar organized by the North American Agricultural Journalists.

However, he suggested Proposition 12 would have minimal economic impact on the North American hog sector.

“California consumers like me are going to pay, I don’t know, five or 10 per cent more for pork that’s covered by the policy, which means a pork chop, but not a cooked ham or lunch meat or sausages,” Sumner said.

“This covers about eight per cent of the sows in North America. The baby pigs that come from those sows that comply are going to cost more. And then I, as a California consumer, will pay.”

“The other 92 per cent of the sows [or] the farms that raise those sows really won’t notice much,” he added.

–with files from the Glacier FarmMedia network.

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“No one will be spared the change in market pressures,” wrote Pam Lewison, director for the Washington Policy Center Initiative on Agriculture in a November policy brief.

“What those market pressures do to the overall higher cost of pork, however, won’t be known until the next marketing cycle after implementation,” she added.

Proposition 12, or “Prop 12,” was a California ballot initiative, passed in 2018. It said that meat and eggs could not be sold in California unless they came from animals raised in compliance with the state’s welfare regulations.

This includes foods imported into the state.

While egg and veal producers quickly fell in line, the policy brief said, pork producers—of which 99 per cent live outside California—challenged the law. This included taking the battle to the U.S. Supreme Court, which ultimately upheld Prop 12.

Pork distributors have until the New Year to submit third-party certification of compliance.

According to the brief, the hog industry estimates that the cost of retrofitting penning to comply with Prop 12 will be about USD $3,500 per sow. Proposition 12 specifies that each breeding sow much have at least 24 square feet of space, and have enough space to turn around, extend limbs, etc.

“For an average hog farm of 1,000 pigs, that represents a cost of $3.5 million,” Lewison wrote.

This with a projected average net cash hog farm income of $330,000 in 2023—down 28 per cent from 2022.

Pork producers have struggled this year with high costs in the midst of lowering demand and hog prices.

“Given the downturn in net income, the stark choice facing many small- to medium-sized farm owners may be to sell to larger farms,” Lewison said. “Consolidation in the meat production industry has long been a source of concern for producers, consumers, and even lawmakers.”

“Certainly, pork will become more expensive as both supply constricts and the actual cost of compliance is revealed,” she added.

Canadian concerns

The Canadian hog sector has been eyeing Prop 12 with concern. Canadian producers exported nearly 6.7 million hogs to the U.S. in 2022, including millions of weanlings.

The fear is that if Canada’s national swine housing standards don’t meet California’s regulations, American producers and processors may not want to purchase Canadian animals. However, there has been little clarity as to what the actual effects of Prop 12 will be for Canadians producers.

Also of concern is other states that have similar animal welfare laws in the works.

“We don’t negotiate separate trade agreements with 50 states. We need to be able to have a North American market that’s integrated, allows for the free flow of product and isn’t different in every different state,” said Manitoba Pork Council general manager Cam Dahl in a June interview with the Manitoba Co-operator.

The Canadian Pork Council has said its sees Prop 12 and similar laws as akin to non-tariff trade barriers and has pressed the Canadian government to take up the issue with the U.S.

In late September, the Canadian government told the Manitoba Co-operator it was analyzing the situation and, “considering the U.S.’ obligations under the World Trade Organization (WTO) and Canada-U.S.-Mexico Agreement (CUSMA).”

—Geralyn Wichers is associate digital editor of AGCanada.com. She writes from southeastern Manitoba.

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Olymel shut the plant on Wednesday and declared force majeure — unforeseeable circumstances that prevent contract fulfilment. Alberta’s health department knows of 426 infections linked to the outbreak, including one death, spokesman Tom McMillan said.

The virus spread fast last spring in Canadian and U.S. meat plants, where people typically work closely together. Cargill temporarily closed its Guelph, Ont. beef plant in December.

The Alberta backlog amounts to 80,000-90,000 hogs, and Olymel hopes to clear it four to five weeks after the plant reopens, spokesman Richard Vigneault said, adding the timing of reopening was unclear. Olymel has begun shipping pigs that it raised on its own farms to U.S. packers, he said.

If the closure lasts longer than two weeks, costs and pigs will add up quickly, said Darcy Fitzgerald, executive director of Alberta Pork. The farmer group has asked Ottawa to offset extra feed and transport costs, he said.

The federal government is assessing the situation and will provide funding if needed, Agriculture Minister Marie-Claude Bibeau said.

Vigneault said Olymel has laid off the plant’s 1,850 workers. The facility can slaughter 45,000 hogs weekly.

Rival Maple Leaf Foods has increased processing modestly at its Brandon, Man. plant to ease the backlog, vice-president Janet Riley said.

Canada is the world’s third-largest pork exporter.

U.S. pork processors should be able to handle the influx of Canadian hogs if the animals are ready for slaughter over several weeks, said Altin Kalo, agricultural economist for Steiner Consulting.

The United States typically imports 100,000 hogs a week from Canada, according to U.S. government data.

U.S. pork companies have been slaughtering about 2.6 million to 2.7 million hogs per week.

— Reporting for Reuters by Rod Nickel in Winnipeg and Tom Polansek in Chicago.

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In Canada, the Signature No. 5 (Maple Leaf) Index daily price was listed at $179.68 per 100 kg (ckg) on May 26. That price was up $1.11/ckg compared to the week previous, according to data from Saskatchewan Agriculture.

“We had a nice little spring rally here, pork cut-out values pushed higher which helped with slaughter prices,” said Brad Marceniuk, a provincial livestock economist in Saskatoon.

Strong exports also helped raise prices at a time when fewer pigs are heading to market, he added.

“When you get into June and July, it’s so hot, the pigs don’t grow as fast and that’s why they don’t come to market as fast,” he said.

Cold storage numbers in the U.S. may also be one of the reasons behind the uptick.

Pork stocks in U.S. freezers at April 30 were pegged at 599.1 million lbs., down roughly nine per cent from the previous year.

“Going into the fall there’ll be more supply of pork; beef will also be up,” Marceniuk said. “So there could be weaker prices.”

However, he predicts the market will stay strong heading into the summer.

One new factor set to affect the North American hog industry is the looming entry of two new major processing plants into the market.

One plant, in Sioux City, Iowa, will process 10,000 to 12,000 pigs a day. The other facility, in Coldwater, Michigan, will have a processing capability of 10,000 per day.

“But they can go double-shift,” Marceniuk pointed out, estimating their overall annual production will be in excess of five million hogs a year.

The Seaboard Triumph plant in Iowa is scheduled to open in July; the Clemens Food Group plant at Coldwater, about 200 km west of Windsor, Ont., is set to begin operating in early September.

“It’s enough to say, ‘OK, now those new plants are going to fight for pigs,’ which should help keep demand for live pigs strong,” he said.

— Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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The former Soviet country’s government will allow imports of Canadian breeding cattle and hogs effective immediately, Agriculture Minister Lawrence MacAulay and Trade Minister Chrystia Freeland announced Tuesday.

Canadian Livestock Genetics Association (CLGA) executive director Michael Hall said the announcement “provides live cattle exporters with an excellent market for Canadian breeding cattle.”

“Georgia is a new market for Canadian swine genetics and our solid reputation will allow us to further develop the swine industry globally,” Nancy Weicker, executive director of the Canadian Swine Exporters Association, said in the same release.

The government, in its release, cited industry estimates that the “total gains” from access to Georgia could be worth up to $2.5 million a year.

Canada’s overall exports of animal genetics worldwide, by comparison, came in at $166.3 million in 2014. Georgia that year imported US$1.7 million in animal genetics.

Canada’s other agri-food and seafood exports to Georgia in 2014, valued at $7.4 million, formed just over half of total Canadian exports to the Eurasian country that year.

Canadian goods included frozen pork, frozen Pacific salmon, lentils, frozen chicken cuts and trees, shrubs and bushes.

Total two-way trade between Canada and Georgia in 2014 came in at $90.3 million. That included $76.1 million in imports from Georgia, mainly metals and minerals, and $14.2 million in exports to Georgia, also including vehicles, mechanical and electrical equipment and chemicals. — AGCanada.com Network

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Brad Marceniuk, a provincial livestock development specialist in Saskatoon, said he expects prices to stabilize in the next couple of weeks as slaughter numbers come back to Earth.

“It really impacts the price, because the cash market price in the U.S. determines what our cash price is here,” he said.

Saskatchewan Signature No. 3 cash slaughter weight hog prices declined C$2.89 per 100 kg, to average $124.17/ckg, for the week ended Saturday (Nov. 21).

So far this year, the number of Canadian hogs slaughtered was estimated at 18.44 million head, up 2.5 per cent from the same time in 2014.

The U.S. has been even busier. The weekly pork production of 510.5 million lbs. established a new weekly record, according to Marceniuk.

“So when (the U.S.) have record numbers of production and slaughter numbers they see numbers typically fall,” which in turn reflects onto Canadian prices, he said, noting hog exports in North America typically flow north to south.

“It’s not vice-versa; they typically pay higher prices for hogs and our price is whatever their price is less a bit of a basis. It doesn’t move back and forth.”

Marceniuk attributed some of the rush to the holiday season in the U.S. The low Canadian dollar, relative to its U.S. counterpart also helps increase interest.

Once Canadian prices stabilize, he said, they should move up slowly.

— Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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