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The importance of export markets for Ontario pork

Friday, June 7, 2013

The United States remains the top market for Ontario pork, but countries such as Russia, Japan, China/Hong Kong, Mexico and the Philippines are also key markets  

by RANDY DUFFY

The recent trade issues with Canadian pork exports to Russia involving the feed additive ractopamine highlight the importance of exports to the industry. It also shows the significant impact that a few countries have on the Ontario industry.

In 2012, Ontario's federal and provincial hog slaughter averaged 85,000 head per week. Ontario exported 214,000 tonnes of pork worth $548 million. This represented about 42,700 market hog equivalents each week (50 per cent of slaughter) and $124 worth of pork for every hog processed in Ontario.

The top 10 countries for Ontario exports in dollar value were the United States, Russia, Japan, China/Hong Kong, Mexico, the Philippines, South Korea, Taiwan, Armenia and New Zealand. Together, these 10 countries accounted for 94 per cent of all exports in 2012, or $515 million. During the last five years, Ontario has exported to about 100 different countries.

In terms of both dollars and volume, Russia is Canada's third-largest export market. In 2012, Canada exported close to $500 million and over 200,000 tonnes to Russia. Moreover, in 2012, Russia was Ontario's second-largest customer at 31,000 tonnes, worth $70 million.  

Figure 1 shows the top six markets for Ontario pork exports in 2012. The blue line shows the weekly average market hog equivalents of pork exported, while the red bar shows the average dollar value of pork exported to each country for every hog processed in Ontario.

The United States remains Ontario's main customer with almost 22,000 market hog equivalents of pork exported each week. For every hog processed in Ontario, about $76 worth of pork was exported to the United States. The Russian market took about 6,200 market hog equivalents each week or $16 worth of pork for each hog processed in Ontario. Japan bought approximately 1,400 market hog equivalents per week ($8 per hog processed), while China/Hong Kong bought 3,100 hogs ($6 per hog processed). Mexico and the Philippines had similar values at 1,800 to 1,900 market hog equivalents per week, or $3 worth of pork for every hog processed in Ontario.

The United States and Japan tend to purchase higher-value products relative to Russia and China/Hong Kong. This is confirmed by looking at the average value per kilogram of pork exports to each country. The United States averaged $3.04 per kilogram, Japan $4.99, Russia $2.25 and China/Hong Kong $1.70.   

The dependence on the U.S. market for exports has decreased over time. In 2008, 32 per cent of Ontario's weekly slaughter went south of the border, but in 2012 only 26 per cent was exported there. Since 2008, the volume of exports to both the United States and Japan has decreased, while exports to other countries such as Russia, China/Hong Kong, Mexico and the Philippines have increased. This diversification is good, but more exports to Japan would be beneficial for the industry since that is the highest export value market.

In summary, the United States remains the top pork export market for Ontario, but countries such as Russia, Japan, China/Hong Kong, Mexico and the Philippines are also key markets. BP

Randy Duffy is Research Associate at the University of Guelph, Ridgetown Campus.

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