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Understanding Canada's Diversity

Livestock production in Canada is well established in the eastern provinces, while the western provinces are in their adolescence.

Livestock production is well established in the eastern provinces, while the western provinces are in their adolescence.

Compared to the United States, Canadian pork production is admittedly small. But for Canada, the business of producing pork is big — and it's getting bigger despite some challenges from south of the border.

In terms of pork production alone, Canada now ranks fifth behind China, the combined 15 countries of the European Union (EU), the U.S. and Brazil. From the export side, Canada ranks second only to the EU.

Looking at conditions from a numbers perspective, the differences between Canadian and U.S. pork industries are staggering. Figures from the U.S. Department of Agriculture (USDA) for December 2002 indicate total hog inventory (U.S.) at 58,943,000, including 6.012 million sows, gilts and boars. Canada, by comparison, has roughly one quarter of that — 14,726,000 hogs, including 1.507 million sows, as reported Jan. 1, 2003 by Statistics Canada (Table 1).

Some of this size differential can be attributed to a greater regionalism in Canada. Where production can be spread among several states in the Midwest, the Great Lakes Basin and the Southeast, Canada's geography tends to dictate the size and development of livestock farming and pork production.

Table 1. Canadian Livestock Inventories (Jan. 1)1
2002 2003 % Change '02-'03 Sows
Atlantic 390 383 -1.8% 35.0
Quebec 4,291 4,280 -0.3% 413.5
Ontario 3,525 3,661 +3.9% 385.7
Manitoba 2,688 2,870 +6.8% 327.2
Saskatchewan 1,180 1,230 +4.2% 113.6
Alberta 2,125 2,140 +0.7% 213.8
British Columbia 168 162 -3.6% 18.1
Canada (total) 14,367 14,726 +2.5% 1,506.9
1Source: Statistics Canada, 000's of head

Quebec and Ontario represent the nation's “establishment,” while Manitoba, Saskatchewan and Alberta — the Prairie provinces — represent the younger generation. Urban populations are smaller and so are hog densities (Table 2).

Ken McEwen, an economics researcher with Ridgetown College, University of Guelph in Ontario, notes some of this regionalism can be attributed to political stripe but that geography is still the driving force. He notes that the majority of Canada's population lives within 60 miles of the U.S. border. Fourteen of Canada's largest 25 urban centers, including Toronto, Montreal and Vancouver, lie within that boundary, accounting for about half of the country's population of 31,414,000 (July 1, 2002, Statistics Canada).

“Also, we don't have farms that are the size and scope of some of the operations in the U.S.,” says McEwen, who specializes in pork industry issues. It is still fairly common to see 200- to 500-sow, farrow-to-finish operations in Canada, he adds.

“In the U.S., those operations are practically gone; you're either a 1,000-sow or 1,500-sow, farrow-to-finish, or you've specialized a particular segment,” McEwen says.

Marketing Matters

On the marketing side, Canadian production continues to have considerable variation. Again, regionalism dictates the marketing methods.

Production in Quebec is more vertically integrated, yet its marketing authority continues to be single desk-selling (pooled and sold under one provincial authority.

Figure 2. Hog Densities (animals per square mile of arable farmland)
Country or Region Density
Netherlands 3,845.3
Taiwan 2,105.5
Denmark 1,304.8
North Carolina 1,204.7
South Korea 981.1
Japan 635.1
Germany 570.5
Quebec 554.3
Iowa 375.7
Spain 375.0
Ontario 234.6
France 227.0
Minnesota 162.3
Manitoba 99.8
Alberta 41.9
Saskatchewan 14.3
Source: University of Saskatchewan

At the other end of the spectrum, Canada's western provinces operate under a more American-style system, where the single desk-selling authority has been abandoned in favor of direct marketing to processors.

Kevin Grier, senior market analyst with the George Morris Centre in Guelph, Ontario, theorizes that in western Canada, there is an 80/20 rule, where 80% of the total volume of production is controlled by 20% of the producers.

“The vast majority of the hogs would be in the hands of producers who don't have need of a marketing assistant,” explains Grier. “Conversely, there are more producer numbers that would have liked to have kept mandatory marketing.”

For those wanting that security, the West still offers marketing through three provincial cooperatives: the Manitoba Pork Co-op, Sask Pork International and Alberta's Western Hog Exchange.

In Ontario, says Grier, marketing is still a mix of pooled and direct marketing, although the provincial authority, Ontario Pork (Producers' Marketing Board), still acts as a third party “go-between.”

Export Positioning

The other major difference between Canada and the U.S. is the reliance on exports. According to USDA estimates, Canada will export 815,000 tons of pork in 2003, second only to the European Union's 1.325 million tons. Although that represented 21% of world share in 2002, its growth in the past five years has been a healthy 85%. Within that five-year period, Canada also eclipsed the U.S. in pork exports. (See related article on export rankings, page 32.)

“We are much more diversified in our exports,” says Martin Rice, executive director of the Canadian Pork Council. “If you look at the export countries we ship to now, a lot of those countries we didn't ship to at all, 10 years ago.”

Yet for all the comparative differences, the similarities do remain; pricing is still fixed to the U.S. system, there is competition for export markets and there is a growing recognition of the role of consumer demand for food safety, animal welfare and the environment.