As uncertainty surrounds the future of the Canada-United States-Mexico Agreement (CUSMA), Saskatchewan pork producer Florian Possberg says free trade has kept North American pork producers and consumers competitive.
The first mandatory review of the trade agreement officially began July 1, after the United States declined to extend the current agreement, opening the door for annual reviews and allowing any of the three countries to withdraw with six months’ notice.
Possberg, a partner with Polar Pork, says the pork industry has become highly integrated over the past three decades, so uninterrupted trade is essential.
“It has allowed products, whether live hogs or meat, to trade freely across the border,” he said.
Polar Pork exports weaned pigs to Iowa, Minnesota and South Dakota, where abundant corn, soybean meal and large processing plants provide finishing advantages.
“We have an advantage producing baby pigs here,” Possberg explained. “The U.S. Midwest has an advantage finishing hogs because of feed supplies and very competitive slaughter plants. It’s a really nice model when we can work together.”
That cross-border movement also extends to processed pork products, which cross borders several times before reaching consumers.
“There are parts of hogs slaughtered in Canada, processed in the United States and sold back into Canada, and vice versa,” he said. “Free trade lets every product find its highest-value market.”
One of the clearest examples is Mexico’s demand for pork hams.
“Mexico imports a lot of hams,” Possberg said. “Without the Mexican market, our ham price would probably be 30 percent lower than it is today because Mexico uses a lot of hams in its food industry and simply doesn’t produce enough.”
Because hams are less valuable in Canada and the United States, Mexican demand remains important to producer returns.
“Our producers benefit, and their consumers benefit,” he said. “It’s kind of a good deal for all three countries.”
Possberg warned that tariffs of 10 to 15 percent would significantly damage Canada’s pork sector.
“We really depend on trade with the United States and Mexico,” he said. “A tariff of that size would make our industry struggle.”
As negotiations continue behind closed doors, Possberg believes agriculture should remain a priority because all three countries benefit from open markets.
“We have products the United States needs, and they have products we need,” he said. “There’s good reason to negotiate a trade deal.”
He noted that longstanding issues such as softwood lumber and Canada’s supply-managed dairy sector continue to complicate broader negotiations, although agriculture should not become collateral damage.
That cooperation gives him cautious optimism despite the uncertainty, and American pork producers remain strong supporters of free trade.
“The National Pork Producers Council and state pork organizations are lobbying senators, congressmen and trade negotiators because they want to continue doing business with Canada and Mexico,” he said.
That cooperation gives him cautious optimism despite the uncertainty.
“If good business principles apply, there should be no doubt we can reach an agreement,” Possberg said. “The uncertainty is what hurts investment.”
He pointed to the cost of building new sow barns, which can exceed $15 million.
“If you don’t know what’s going to happen in six months, you’re not going to invest $15 million in a project that depends on long-term market access,” he said.
For Possberg, securing a stable trade agreement is about more than exports. It also provides the confidence producers need to invest, grow and continue supplying affordable pork to consumers across North America. •
— By Harry Siemens