Canadian Pork Industry Research
Roland Filler, January 29, 2021
Sources: IBISWorld, Canadian Pork Council, Statistics Canada
Industry Overview and External Drivers:
The Canadian hog and pig farming industry is composed of many small, family owned farms, leading to fragmentation in the market with the biggest players being HyLife Foods, Maple Leaf Food, Progressive Pork Producers Co-Operative and Sollio Cooperative Group.
Key external drivers in the industry include demand from meat, beef and poultry processing with an average annual growth of 1.5%, an annual per capita disposable income increase of 1.5% and an average annual decline of the Canadian effective exchange rate index by -0.8%.
Jobs and Economic Contribution:
The Canadian pork industry saw $4.5 billion in revenue in 2020, an annual growth of -2.1% since 2015. Profits have decreased at a similar rate of -1.5% annually with a total of $447.5 million in 2020, however the profit margins have remained steady at approximately 10%.
There are currently 1835 businesses operating in the hog and pig farming industry with an average annual growth rate of -3.0%, Average annual employment has seen a decline of -0.7% since 2015, and the industry currently employs 17,744 people, paying $308.4 million in wages at an annual growth of approximately -2.0%.
Being a leader in the international pork industry, Canada ranks third in export volume and seventh in production as of 2011.
Exports to China have increased 2.5x in 2020, largely due to the five months in the second half of 2019 in which the industry did not trade with China. Feeder pig exports have stayed consistent with statistics from 2019, however the exports of market hogs have grown nearly 6% in the past year.
2019 export statistics show total hog exports of 5,115,516 total animals, comprised of 58,373 breeding hogs, 4,31,749 feeder pigs and 745,394 market hogs. This marks an increase of 0.5% over 2018 exports, however the temporary ban of Canadian pork exports to China in the second half of 2019 led to an average drop in Canadian producer pork prices of 14.3%.
Strengths of the Canadian hog and pig farming industry include a high profit margin compared to sector averages, high revenue per employee, and low product/service concentration in addition to low imports. The industry suffers from high volatility and high capital requirements, posing barriers to entry that restrict new entrants’ ability to capture substantial market share. Threats towards the industry include low historical revenue growth, low projected revenue growth (2020-2025) as well as a decrease in annual per capita pork consumption by an average of -1.1%.
Expected trends in the industry consist of the production of leaner and healthier cuts of pork, a decline in the number of industry establishments, changes in demand resulting from consumer attitudes, as well as declines in labor and operational costs.