North America’s integrated hog market will split along national lines into smaller regional markets if Canada loses an upcoming hearing before the US International Trade Commission, Canadian Pork Council President Clare Schlegel warned.

Speaking during a teleconference, Schlegel contended that if the commission makes permanent the antidumping penalties averaging about 10% that are currently being levied on US imports of Canadian hogs, that would be sufficient to cause a continent-wide restructuring of the North American hog industry.

If the US commission determines in a ruling expected April 18 that Canadian hog-dumping has hurt US hog producers, then, “we will begin to move from an integrated North American market to US-focused and Canadian-focused markets,” he predicted.

Canada, with a preponderance of hog-breeding and weaning operations, would invest in hog-finishing operations to serve its domestic market, while the reverse would take place in the US, Schlegel forecast. That would result in a loss of efficiency to specialized hog producers in both countries and to lower margins overall, he argued.

The Canadian industry group president made his remarks following a US Department of Commerce decision on March 7 that finalized dumping margins for a number of Canadian hog exporters that were investigated following US industry allegations of Canadian dumping. In a parallel decision concerning countervail allegations, the department ruled that Canadian hog producers don’t receive countervailable subsidies from their governments.

Schlegel predicted that, due to specialization within the hog industry, the cost of antidumping duties would be borne as much by US hog-finishing operations as by Canadian hog producers.

“The US is short of young hogs, which they have to import from Canada. Both the buyers and the sellers need each other, and the US buyers of feeder pigs don’t have any immediate alternatives,” he said.

The Canadian Pork Council represents Canada’s more than 13,000 hog farmers. (Dow Jones)