Swine Grist
A PERIODIC NEWSLETTER PRODUCED BY GRAND VALLEY FORTIFIERS LTD. VOLUME 6, ISSUE 3 | FALL 2019
Dear Friends, It’s hard to believe it is already time to once again write to you in our Fall Swine Grist. After a challenging spring in many parts of Canada, we were blessed with a beautiful summer with good amounts of heat and rain. There are still some areas with significant challenges however. Let’s hope and pray we can enjoy a second summer this fall and the harvest will be bountiful and easy to take in. We are living in very challenging times, with ag trade on hold between Canada and China, and we are all a little unsure of what the future will hold. Peter Hall has written a nice article to try and summarize our current scenario and what to watch for in the future. We are also thankful to Dr. Greg Wideman for his update on PEDv and the new Influenza A Vaccine. Arianne de Rond has crafted a practical article on feed intake and Dr. Martin Clunies has provided some information on breeding performance challenges and a few ideas on how to tackle it. Wishing you all a bountiful and safe fall harvest. Sincerely, Jim Ross, Founder & Chairman
TRADE WARS AND THE AGRICULTURE EXPORT OUTLOOK
ood is often a show-stopper in global trade negotiations. At the moment, it’s at the forefront of a key friction-point. China reacted three weeks ago to U.S. tariff escalation by slapping an outright ban on imports of American food products. Both the U.S. action and the Chinese reaction exacerbated global trade jitters, which, if anything, have worsened in the days that followed. It has also upended the agri-food industry, and led to a lot of speculation about possible fallout. What are the expected outcomes of this latest development, and are there opportunities for Canadian food exporters? Discussions of trade in food products usually begin with market entry issues. The industry has historically been plagued the world over with overt protectionism, more subtle non-tariff barriers to trade, regulations, packaging and preparation requirements, phytosanitary restrictions…the lists are endless. At the core of this activity is strategic distrust, and close to this, special interests. World Trade Organization negotiations stalled at the Doha Round, principally over disagreement on how to liberalize agricultural trade. At the same time, once market access has been achieved and a good sales record established, it’s no small thing to pack up and leave. Food is in great part a short-shelf-life industry, and in a just-in-time world, reliability is critical: slip up on a key shipment, and you are in serious trouble. On the other hand, fulfill all the requirements consistently, and the co-dependence becomes very strong—disrupting such relationships is far easier said than done. This is true for both domestic and external trade relationships, and in a globalized world, increasingly important for the latter.
If these issues are important everywhere, they are arguably much more acute in China. It has the largest number of mouths on the planet to feed. Although its population is not growing, China’s people are getting richer by the tens of millions every year, boosting the intensity and quality of their demand for food. And given limitations on China’s ability to expand domestic production, it is increasingly looking to imports from the rest of the world. According to the UN Food and Agriculture Organization, China’s net dependence on the rest of the world for food imports is rising dramatically. And to complicate things, China’s particularly intense appetite for pork is being compromised this year by African swine flu, which has decimated its extensive domestic swine herds. China is a heavy net importer of food, notching a USD 41 billion deficit with the rest of the world in 2017. The U.S. is China’s largest foreign supplier, at USD 26 billion in 2017, with Brazil a very close second. The next group, a cluster of countries that includes Canada, form a distant third, with exports for each in the USD 6-7 billion range. Clearly, the loss of U.S. imports would be next to impossible to replace overnight without a massive dislocation of food trade flows. Even so, China’s focus on food security will ensure rapid remedial action. The same is true on the flipside: China is America’s top food export customer, we are a close second, followed by Mexico and Japan. Although U.S. food exports are more regionally diversified, the U.S.’s loss of food product sales to China is a severe blow, and it’s almost equally hard to imagine how the U.S. could find replacement markets overnight. An additional complication is the tangle of foreign ownership. To ensure a steady global supply, Chinese firms have invested in food production facilities offshore. It has sizable investments in the U.S., entities that now fall under the new import ban. Clearly, these and their supply chains are at risk. In a world of globally integrated business, a trade action that is meant to punish another country easily becomes a self-inflicted wound.
Dr. Samuel Waititu, Monogastric Nutritionist AB / SK: 1-866-610-5770 MB: 1-866-626-3933 www.fortifiednutritionltd.com
Ian Ross, President & CEO | Jim Ross, Chairman Clarke Walker, VP & COO Dr. Martin Clunies, Senior Monogastric Nutritionist David Ross/Mike Peckover, Publishers
by: PETER G HALL Vice President and Chief Economist, Export Development Canada (EDC)
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