It is also the second-largest supplier of pork to Mexico, where UK pork recently gained access. Developments in Canada therefore have implications for global pork markets, ultimately affecting the situation in the UK. Further negotiation of the UK-Canada trade agreement is also under consideration.

Farmgate pig prices have been high in Canada this year, influenced by strong prices in the US where demand has outstripped pig supplies. In June, prices peaked at CAD$2.72/kg (158p/kg) (Porc Qualité Québec), though have fallen away more recently. Even with high feed prices, considering that the Canadian cost of production is much lower than in the UK (averaging just 97p/kg in 2014-2019), reports indicate that pig production has been very profitable this year. The latest Rabobank report suggests average producer profits have been around CAD$100/head this year.

We often see producers expanding herds under conditions of good profitability. However, this has not particularly been the case in 2021. Second quarter figures published by Statistics Canada show just a 1% increase in the total number of Canadian pigs on farms compared with the same period in 2020. The total on 1 July was 14.2 million head.

The breeding sow herd also only showed modest expansion of 1%, totalling 1.2 million head. The number of sows farrowed between January and June totalled 1.3 million, up 2% from 2020 and the number of pigs born was 3% higher than last year. This will continue to support pig availability for the latter part of the year. Although Canadian pig slaughter was 1% lower than in 2020 from January-June, live exports to the US were up by nearly 30%.

Nonetheless, the anticipated rate of farrowing is expected to be stable on year earlier levels in the latter half of 2021. This reduces the potential for further increases in pig availability next year.

While the strong profitability might normally encourage expansion, other factors are limiting this potential. Market reports from Canada indicate difficulties with permitting, and a lack of labour also constrains any expansion efforts; these are challenges we see faced by the pig industry in many countries. Growth in Canadian pork production increases the competition faced on international export markets, however with only limited expansion underway, the challenge this could present is minimised.