HOISTED BY ONES OWN PETARD

Pigs Here, Feed There: Truck Cargoes Stuck on U.S.-Canada Border


Jen Skerritt and Michael Hirtzer
Thu, January 20, 2022

(Bloomberg) -- Pigs bound for slaughter in the U.S. are getting stuck in Canada while their feed is stranded in the U.S. as new trucker vaccine rules exacerbate a shortage of drivers.

A significant number of hog producers are unable to ship their weanlings to Iowa, Minnesota and the Dakotas as trucks have been canceled this week due to a lack of drivers, said Cam Dahl, general manager of Manitoba Pork. 

Compounding the problem, some truck shipments of soybean meal from the U.S. to Manitoba are also being scrapped at a time when producers are relying on the imports to feed their animals after drought withered Prairie supplies, he said. 

“If cancelations continue I’m not sure exactly where there’s going to be a home for all the weanlings,” Dahl said Thursday by phone. New rules that came into effect Jan. 15 require that American truck drivers crossing into Canada be fully vaccinated, though only about half of U.S. drivers have gotten their shots. 

The U.S. is poised to introduce its own mandate on foreign travelers on Jan. 22, which will apply to truckers. The health orders are adding to the North American supply-chain turmoil that was already strained from labor shortages and pandemic-related disruptions. 

Canadian produce importers have said that in less than a week, the new rules have boosted the cost of freight and added to difficulties stocking shelves with fruit and vegetables.

Pork packers in the U.S. already were paying higher prices for hogs after farmers reduced herds, in part because feed prices have soared. Fewer animals moving through the system should keep meat prices high, contributing to further food inflation.

Hog futures in Chicago climbed as much as 2.5% on Thursday to the highest since July.

The hog industry relies on “just in time” manufacturing, and Manitoba doesn’t have the capacity to feed and process a surge of hogs domestically, Dahl said.

 Last year, Manitoba shipped about 3 million weanlings to the U.S. to be finished, according to Manitoba Pork.

“Up until this point, we’ve recognized the need to keep product moving across our borders going both ways,” Dahl said. “We’ve recognized the need to move essential goods and we need to find a way to keep that happening.”

Hungry, Cold Cows in Canada Fuel Rare Buying-Spree of U.S. Corn


Jen Skerritt and Michael Hirtzer
Thu, January 20, 2022, 

(Bloomberg) -- Canada is now one of the top buyers of U.S. corn as cattle ranchers scour for grain to feed their animals.

Dry conditions zapped as much as 40% of western Canada’s grain output last year, sending prices for barley and other crops to all-time highs and leaving a dearth of feed for the nation’s cattle industry. 

The squeeze has prompted Canada to make a rare commitment to bring in about 3.2 million metric of tons of corn from its southern neighbor, according to U.S. Department of Agriculture data.

That’s the most in roughly two decades and compares to only 457,000 tons a year ago. Canada’s now one of the biggest purchasers alongside China, Mexico and Japan, and its buying binge is reducing already tight stockpiles of feed grains.

“If you can’t get a car tire, that’s an inconvenience. If a cow can’t get something to eat, that’s a major problem,’’ said Bob Lowe, president of the Canadian Cattlemen’s Association.

Chicago corn futures climbed as much as 0.6% to $6.1425 a bushel Thursday, the highest level for this time of year since 2013.

Lowe is using about 40 tons of American corn a day to feed his 5,000 cattle in Nanton, Alberta. The recent cold snap prompted him to buy about 15% more corn than he usually needs to sustain his animals this winter. Widespread drought means there are no local alternatives available, and omicron-related disruptions at Alberta’s biggest beef processing plants have left some producers feeding animals for longer, he said.

“Keeping cattle alive becomes the number one criteria and economics becomes a distant second,’’ Lowe said.

Earlier this week, Canada also made a rare purchase of European barley as there are limited supplies available in the Prairies, and European malt barley is cheaper and better quality than what is available. The northern nation hasn’t imported significant volumes from the European Union since the 2015-16 season, trade data show.

The extra corn exports are bolstering prices for U.S. farmers, but the demand could slow if Canadian farmers recover from last year's drought and boost yields this year.

“This will probably be a one-off,'' Angie Setzer, cofounder and partner of farm advisory ConsusROI, said by phone.