The U.S. Department of Commerce today reaffirmed its October 2004 decision that Canadian producers are dumping live hogs in the United States. Commerce announced that provisional antidumping duties averaging 10.63% will be placed on imports of live hogs from Canada.
The International Trade Commission will now determine whether these imports have 'injured' the U.S. swine industry. The ITC will hold a hearing tomorrow, March 8, with a final vote scheduled to take place in April.
The Pork Trade Action Coalition (PTAC) called the announcement of final dumping (AD) duties on live swine from Canada a needless tax that will harm American farmers, particularly in Iowa, Minnesota and other Midwestern states who rely on the imports for their livelihoods.
Jon Caspers, a pork producer from Swaledale, Iowa and a past president of the National Pork Producers Council (NPPC) expressed strong support for this decision. Caspers says, "The flood of low-priced hogs from Canada has pushed down U.S. hog prices and inflicted severe financial harm on U.S. hog producers."
The Commerce Department's affirmative dumping determination was issued at the same time as the Department's negative countervailing duty (CVD) determination. In its final CVD decision, Commerce found that Canadian hog farmers had received substantial benefits from more than a dozen subsidy programs. However, Commerce determined that many of the subsidies received were not "illegal" because benefits were also provided to other Canadian agricultural industries.
According to Caspers, while pork producers disagree with Commerce's legal interpretation of the subsidies, the economic impact of these subsidies, regardless of how they might be legally categorized, is dramatic. Iowa State University economist, Dermot Hayes, has analyzed both the data from the public record of the CVD case and other available Canadian agricultural data and estimated that Canadian hog farmers receive benefits ranging from $4 to $6/hog for the federal subsidy programs and that Quebec producers receive as much as $15/hog. A more detailed analysis of these figures is provided in a paper that is posted on NPPC's Web site.
Daniel Porter, lawyer at Willkie Farr & Gallagher LLP and a counsel to PTAC, explained that what caused the lowering of the country-wide rate was the Department's decision to reverse its earlier preliminary determination and to calculate a separate antidumping (AD) margin for Excel Swine Services. "Excel Swine Services is one of the largest exporters of live swine from Manitoba and had originally been chosen by the Commerce Department to be a 'mandatory respondent.'
"However, in its October preliminary determination the Commerce Department ruled that Excel was not an appropriate mandatory respondent and rescinded its selection of Excel. Following the preliminary determination, Excel submitted voluminous information and arguments demonstrating that the Department's October preliminary determination was based on a misunderstanding of Excel's role in the sales and production process. Essentially, in today's final determination the Commerce Department stated that it now agrees with Excel's position," Porter explains.
The Commerce decision also comes on the heels of a new study released by the National Oilseed Processors Association (NOPA) and the Iowa and Minnesota Soybean Growers Associations warning that American hog farmers in Iowa and Minnesota who import Canadian swine and raise them in the U.S. could be significantly impacted by antidumping duties imposed on live swine imports from Canada.
The study found that U.S. demand for Canadian feeder pigs has grown sharply because of increased specialization, with the largest percentage of imported pigs going to Iowa (59%) and Minnesota (32%). It wrote that an imposition of a 13 to 15% tariff would increase the cost of feeder pigs to U.S. finishers and more greatly impact Iowa, Minnesota, and other Midwestern states.