Coronavirus outbreak could hurt Canadian beef, pork exports

By Aerin Einstein-Curtis

- Last updated on GMT

© GettyImages/keeperofthezoo
© GettyImages/keeperofthezoo

Related tags Cattle swine Feed costs Usda

COVID-19 influence on logistics is expected to hinder Canadian exports of beef and pork, even as low feed prices support increased numbers of cattle on feed.

The US Department of Agriculture (USDA) released an agricultural specialist’s report​ published last week [March 16], an outlook for Canadian feed and livestock production.

Overall, the swine and cattle herds in Canada are contracting, in part, in response to ongoing market demand, volatility and African Swine Fever (ASF), said the author.

However, improving feed costs following a period of high prices and low availability along with export market strength are anticipated to boost cattle feeding activities in 2020, she said.

Cattle exports are forecast to be steady in 2020 as lower feed prices, a smaller calf crop balance export contracts and US slaughter demand, the specialist said. “Retention of cows due to improved forage availability will also lead to decreased slaughter cow exports.”

COVID-19 and exports

Canadian beef exports are anticipated to increase by 12% in 2020, finds the report. 

“In the first quarter of 2020, rail blockages and COVID-19 challenged exports and the delivery of product,” ​said the specialist

“Logistical challenges with a lack of container availability have been exacerbated by the COVID-19 epidemic in China coinciding with Lunar New Year, though backlogs are expected to eventually clear.”

ASF is also predicted to boost beef exports to China and other countries in Asia in 2020, she said. Canada is set to see increased competition for market share in Japan following the trade agreement between the US and Japan.

However, the US is anticipated to remain the dominant export market for Canadian beef in 2020, she said.

Imported beef products are expected to increase by 3%, the specialist said. “The US will continue to provide over 60% of Canada’s beef imports while the EU will continue to make marginal gains,”​ she added.

Pork exports are anticipated to increase 7% in 2020 although rail blockages and COVID-19 remain potential hindrances to export, she said. “Logistical challenges with a lack of container availability continue to persist and have been further exacerbated by the COVID-19 epidemic in China.

“With quarantine and movement restrictions in China during the Lunar New Year period, containers of pork were reported to back-up in ports,” ​she added. “Sources report that the situation is now improving but long-term impacts of COVID-19 and duration of broader global implications for pork exports remain unknown.”

However, demand from Asia is expected to support an increase in exports in 2020, the specialist said. Canada is predicting increased market activity in China, Japan, Mexico and Europe as the country looks to diversify its export market.

Pork imports are forecast to be up about 5% with 90% of imports coming from the US, she added.

Cattle production highlights

Canada's cattle herd is expected to shrink in 2020 with total herd numbers falling by about 3% at the start of 2020 and anticipated to be down an additional 4% by the end of the year, found the report.

Forage shortages in 2019 increased slaughter and reduced total cattle numbers, said the USDA.

“Heifer retention was also reduced, and the 2020 calf crop is forecast to be 1% lower than 2019. More favorable weather conditions, improved forage, and increased prices will support cow-calf producers, but current herd size and slaughter activity will constrain any expansion in 2020.”

Live cattle imports are expected to decline in 2020, she said. “US and Canadian cattle on feed numbers are up in the first quarter of 2020 but, moving forward, Canadian feeder cattle buyers are likely to experience more competition to secure feeder cattle due to a smaller US calf crop.”

Cattle processing is anticipated to increase by 2%. “Large numbers of cattle on feed and placements in the last quarter of 2019 will see slaughter pace increase in the first half of 2020.”

Cow slaughter and herd reduction is expected to decline, but actions will be influenced by feed and forage availability and costs.

“The last two years have seen increased cow slaughter and increased heifer slaughter as a result of difficult weather events in the Prairie and Western Provinces. Poor feed availability and outlook for cow-calf producers resulted in periods of herd liquidation.”

Pig herd size, production

The Canadian swine herd is expected to shrink by 1% in 2020 and the pig crop is forecast to be down from 2019, said the USDA.

“Impacts of Porcine Epidemic Diarrhea virus (PEDv), higher construction costs, market volatility, and concerns about ASF have moderated expansion plans and most of the construction taking place is facility upgrades rather than a net gain on production spaces."

Live imports are expected to drop about 50% in 2020 as the domestic herd improves, she said. Feeder exports are set to “rebound” ​although market hog demand to the US is down.

Hog processing in Canada is forecast to increase by 1% as production increases by 2%. “However, large volumes of domestic stocks, due to increased slaughter in 2019 and restricted access to China from June to November 2019, will dampen production activity slightly."

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