Farmscape Article 2109  April 8, 2006

The Director of the University of Minnesota Swine Center is encouraging individual hog producers on both sides of the Canada-U.S. border to join initiatives aimed at further strengthening trade relations between the two industries as part of the effort to head off future trade actions.

Dr. John Dean, an associate professor of Clinical and Population Sciences with the University of Minnesota's College of Veterinary Medicine was one of the keynote speakers as Manitoba Pork Council hosted its annual general meeting (March 4-5) earlier this week in Winnipeg. His topic, “Pigs Without Borders.”

The meeting, which brought together Manitoba hog producers, also attracted officials from other national and provincial pork organizations and 2 four-person delegations from the U.S., one representing the Minnesota Pork Producers Association and the other representing the Iowa Pork Producers Association.

Producers Strive for Greater International Cooperation

“It’s one of our goals to make sure that we get a little bit more understanding at the grassroots and that we have producers talking to producers,” states Manitoba Pork Council Chairman Karl Kynoch.

U.S. Trade Case Dismissed One Year Ago

It was one year ago (April 6, 2005) that antidumping duties on live Canadian weanling pigs, feeder pigs and slaughter hogs imported into the U.S. from Canada were quashed by a U.S. International Trade Commission (ITC) panel.

In its final injury determination, the five member panel ruled unanimously that the imported Canadian pigs were not causing harm to American producers. The ruling ended a trade action that had been initiated in March 2004, when the U.S. based National Pork Producers Council (NPPC) filed petitions with the Trade Commission and the U.S. Department of Commerce (DOC) requesting countervail and antidumping investigations into the Canadian hog industry’s pricing practices. In its complaint, the NPPC alleged illegal government subsidies allowed Canadian pork producers to dump live pigs into the U.S. market at prices below their cost of production, harming U.S. producers.

Although the Department of Commerce found no evidence of illegal government subsidies, it did find evidence Canadian pigs were sold into the U.S. at prices below their cost of production and, in October 2004, imposed provisional antidumping duties (paid in the form of bonds paid by U.S. importers of record) on imported Canadian weanling and feeder pigs and slaughter hogs. The duties were subsequently adjusted, before the ITC ultimately ordered an end to their collection and a refund of those already paid.

Final Ruling Jump-starts Efforts to Improve Relations

The decision also set in motion several coordinated initiatives on both sides of the border aimed at restoring trade relations and strengthening Canadian U.S. business alliances. Representatives of several producer organizations, including the Canadian Pork Council, (CPC) and several of the provincial organizations have sent delegations to the U.S. to take part in various state industry trade shows and annual producer meetings in an effort to interact directly with their U.S. counterparts. Those state organizations have reciprocated by sending delegations to attend Canadian events and meetings.

Efforts Prove Effective

The trade advocacy efforts appear to be paying off.

“They’re proving to be very effective,” Kynoch suggests. “For example, the turnout of the delegation that has come up from Iowa and Minnesota -- We had eight representatives here out of the U.S. and those two states represent 40 percent of the U.S. production.”

“A result of us being down in the U.S., we now have also our southern neighbors coming up and attending our annual events,” Kynoch concludes.

“I think there's been a lot of improvement,” says Iowa Pork Producers Association District Five Director Bryan Karwal. “We were up here in November and I know Manitoba Pork Council and Iowa Pork Producers are trying to improve relations. They were down to our annual meeting and it’s just been a great time. [We’ve] been able to meet the people and get to know them and realize how similar problems and industries we have in both countries.”

Karwal believes, “It [Manitoba Pork Council’s initiative] has opened some eyes. People are really interested because they know there are a lot of pigs in Iowa coming from Manitoba and Canada and they really want to get to know the people so they have a better relationship with them.”

Earlier Problems Blamed on Poor Communication

Karwal blames the last U.S. trade action on a lack of communication. “I personally think there was maybe a little lack of understanding between us, what really really goes on. If you don’t talk face to face you’re never going to really know. We need to work that out so then we have a better idea when we do do something, policy wise, how it might affect the people across the border before we even have to ask them.” He suggests, “I think we’re getting to the point [where] we’ll be on that kind of a communication level. I don’t think we were there before.”

Continued Access to Canadian Pigs-A Top Priority in Minnesota

Jacob (Jake) Storm, an executive board member of the Minnesota Pork Producers Association agrees. “I think the biggest progress is that we’ve opened up dialogue between the two countries to try to resolve this and make sure something like this doesn’t happen again.”

Storm, who buys Canadian weanlings for finishing, suggests, “The main thing is to assure the availability for producers, like me, to receive pigs down in the United States and also to assure our Canadian neighbors that we will be here to take their pigs and we will not close the border again.”

All the pigs Storm buys for finishing, approximately one thousand a week, are imported form Canada. The reason, he explains, “Availability and, number one, health. They’re very, very healthy pigs and they do very well for us.”

Manitoba Equally Dependent on the U.S. Industry

Kynoch echoes that sentiment, “If you look at Manitoba, we rely very heavily on trade going south. We ship a lot of live swine south, in fact half of our production, so it’s very important that we have a good working relationship and understanding of the industry on both sides of the border. We do a lot more business with Iowa, Minnesota, Nebraska, some of those states, than we do east and west with Saskatchewan, Ontario. I think it’s very important that we understand what each other is doing, that we have similar problems and that if there is issues coming up that we're there to address them.”

Karwal notes, “We think pretty much now the whole thing [trade action] is done with and we’re pretty happy with the whole scenario.”

However, he suggests, “There’ve been some complaints because pork producers complain when there’s low price so, if they see something to complain about, they will. But I absolutely see no countervailing duty coming. I know there’s a lot of producers from up here [Canada] feed pigs down south, sell pigs so it’s a lot more diversified than it was before and we really need the pigs at this point.”

However, he admits, “If the price goes down lower and it’s not as economical, we probably won’t need the pigs as bad, so we’ll see what happens then but feeder pig demand has just been absolutely tremendous. If it wasn’t for the pigs coming from here, (Manitoba) we’d have a lot more empty buildings than we have now.

Stepped Up Activities Encouraged

In his Keynote address, Dr. Deen called for even more reciprocal participation in meetings, more interaction among producers on both sides of the border and more interaction within the research communities.

“I think we’re seeing some at the very high echelons of organizations, such as National Pork Board meeting with Canadian Pork Council,” he notes. “We've got delegations in Manitoba from Iowa and Minnesota so we’re seeing some, but we’re not seeing it on the person to person basis as much as I think we should. We’re not having these producer meetings that not only have, in our case, Iowa and Minnesota producers but also producers from other adjacent areas such as Manitoba.”

“We do see a lot of north south movement of pigs, more south than north,” he points out, but he stresses, “We don’t see the farmer to farmer interaction, the understanding of what’s happening in Minnesota is similar to what’s happening in Manitoba and the ability to share notes. I tell my producers, probably you have more in common with Manitoba producers than producers in North Carolina or going further south, yet we don't see that interaction and that knowledge.”

Canadian Producers Urged to Visit the Destinations of Their Pigs

Dr. Deen suggests, “When Canadians look at meetings, look at going to meetings where their pigs are going to. For instance, coming down to meetings within Minnesota, within Iowa to talk about the common concerns so that there is a good understanding.”

“Maybe they should go less to the Banff Conference and more to the Leman (Allen D. Leman Swine) Conference as one example,” he says. “The other aspect is just understanding how dependent each industry is on each other, especially in weaned pig production. Not only is there a need for Manitoba to ship pigs out but there is a need for Iowa and Minnesota to keep their barns full.”

Dr. Dean also notes, “We have less and less people involved in the swine industry, especially my side, on the research side, so we have to take the concerns that are common across both sides of the border; whether it be welfare concerns, whether it be food safety, whether it be disease control. Each of those would be addressed much more efficiently as we combine resources not only among academia but also among the constituencies, the swine boards, the pork producer associations that we have.”

Increased Personal Contact Builds Trust

“My argument,” he concludes, “is that most of the decisions of an industry such as ours are made based on personal contact and personal impressions. As long as the Canadian farmer is remote to the American farmer, there is some distrust but, if they get together, talk with each other, know what’s going on, see the commonality, I think it’ll develop much more trust.”

Staff Farmscape.Ca