U.S. Set to Apply Antidumping Duties

The U.S. Department of Commerce announced preliminary duties on live swine from Canada ranging from 13.25% to 15.01%. While welcomed by the National Pork Producers Council (NPPC) who filed the claim, a coalition of pork producers who rely on feeder pig imports are vowing to fight the duties.

The DOC will make its final determinations early next year, and duties may increase or decrease from the preliminary determinations. The International Trade Commission (ITC) is expected to make a final determination on the question of whether imports have injured the U.S. industry by March 2005.

The Commerce Department's affirmative preliminary dumping determination follows on the heels of the Department's negative preliminary countervailing duty (CVD) determination in August. In that decision, the Commerce Department found that Canadian hog farmers had received substantial benefits from more than a dozen subsidy programs available in Canada. Commerce preliminarily decided, however, that many of the subsidies received were not "illegal" because benefits were also provided to other Canadian agricultural industries.

Jon Caspers, a pork producer from Swaledale, Iowa and a past president of the NPPC states, "Canadian hog producers unfairly benefit from huge subsidies that cause overproduction in Canada and allow Canadian producers to sell their hogs in the United States at artificially low prices."

John Block, former U.S. Secretary of Agriculture and senior advisor to the Pork Trade Action Coalition (PTAC) says the preliminary dumping rates are "unfair and will hurt hundreds of American farmers who buy Canadian pigs and raise them to market in the U.S." He goes on to explain that Canadian exports account for only 3.3% of the U.S. market.

While the DOC set preliminary duties for one Canadian exporter at a minimal level, duty levels of 14.06% on the nearly 80% of Canadian swine exports to the U.S. covered by the "all other rate" could put many independent American farmers out of business, PTAC say.

"Two-thirds of Canadian imports are baby pigs imported by family farms that cannot otherwise obtain the quality or quantity of pigs needed from U.S. sources," says Larry McAllister, founder and president of Iowa-based Prairie States Management Company, a family owned and operated business founded in 1986. "Most of the remaining imports are slaughter hogs."

The Commerce Department is now in Canada examining the accuracy of the Canadian government's subsidy data. Iowa State University economist, Dermot Hayes, has analyzed both the data from the public record of the CVD case and other available Canadian agricultural data. According to a NPPC release, he estimated that Canadian hog farmers receive benefits ranging from $4 to $6/pig for the federal subsidy programs and that Quebec producers receive as much as $15/pig.