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Russian Food Import Ban Erodes Pork Sector Profitability

15 August 2014
Manitoba Pork Council

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CANADA - The chair of Sask Pork estimates Russia's ban on Canadian pork imports will cost Saskatchewan pork producers about C$20,000,000, writes Bruce Cochrane.

In response to sanctions imposed over the crisis in Ukraine Russia has banned certain food imports from Canada, the US, the European Union, Australia, and Norway, including meat, fish, milk, and milk products and fruits and vegetables for a year.

Florian Possberg, the chair of the Saskatchewan Pork Development Board, notes about 70 per cent of the pork produced in Canada is exported and Russia was our fourth largest destination.

Florian Possberg-Saskatchewan Pork Development Board:

So far in 2014, between January and May, we shipped over C$200,000,000 worth of pork to Russia so losing that market at the same time as some of the typical back door methods of getting pork into Russia have been closed through the Ukraine and Europe as well means that there is a change in the supply demand situation for pork and as a consequence the futures, the Chicago Mercantile lean hog futures have dropped about five to seven cents a pound which is over C$10 a hog.

Now there's other factors at play as well but there's no question that that impacted our price and the price perception.

Saskatchewan, we would produce just under 2,000,000 hogs a year.

If we're looking at C$5 to C$10 a hog reduction, we're looking at a C$20,000,000 change to our bottom line.

Mr Possberg acknowledges pork producers are still making money but from 2007 to 2013 the Canadian pork industry faced huge losses and producers were counting on 2014 to fill an equity hole so anything the Canadian government can do to improve market access is in our benefit.


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