Increase in Feeder Pig Prices Will Be Offset

For months pork producers have heard many different sides to the National Pork Producers Council's (NPPC) antidumping case filed against Canada. Recently the U.S. Commerce Department approved a 14% antidumping duty on all Canada live hogs.

Confusion is filling the countryside on how it will impact producers, especially those family farmers who are dependent on Canadian feeder pigs to remain independent. Several producers have called NPPC saying that Canadian producers, exporters and brokers are trying to renegotiate prices. NPPC past-president Jon Caspers, a pork producer from Swalesdale, Iowa, says that's illegal.

Canadian producers will likely pass along a portion of the duty in feeder pigs prices. But Iowa State University economist Dermot Hayes says ISO-Wean prices should only increase $1-2. And the antidumping duties will create an upside movement in the U.S. of $2-3, essentially offset that initial increase and still providing a positive price for U.S. producers.

The Pork Trade Action Coalition is a group of farmers in the U.S. who depend on Canadian feeder pig imports. Media releases have portrayed the antidumping duties as unjustified and detrimental to U.S. small family farms. Caspers explains that the group is actually "collecting an awful lot of money north of the border to fund the publicity efforts," to the tune of $10-15 million from Canadian pork councils.

Caspers says U.S. producers have paid dearly for Canada's overproduction. In each of the last 23 quarters Canada has increased its breeding herd, while the United States has not. He adds that the market will produce for whatever demand is there. U.S. producers can provide the same thing, but are at a disadvantage when Canadian producers can still increase when subsidies kick in during low price cycles.

Hayes says the goal is to have Canadian pork producers remove the subsidies that are creating an unfair trade scenario in the North American market.