Voluntary Report - public distribution

**Date:** 5/21/2004

**GAIN Report Number:** CA4039

CA4039

**Canada**

**Agricultural Situation**

**This Week in Canadian Agriculture, Issue 16**

**2004**

**Approved by:**

![](media/image1.wmf)Gary C. Groves

U.S. Embassy

**Prepared by:**

George Myles

**Report Highlights:**

\* Anti-Dumping Duty Imposed on U.S. Frozen Pizza \* Live Hog Exports on
Record Pace \* Chicken Agency Announces Strategy to Offset British
Columbia\'s Market Shortfall \* Strike Averted at Major Ontario Hog
Plant \* Export Market Development Funding Down Sharply \* New Ontario
Apple Board to be Created \*

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Ottawa \[CA1\]

\[CA\]

This Week in Canadian Agriculture is a weekly review of Canadian
agricultural industry developments of interest to the U.S. agricultural
community. The issues summarized in this report cover a wide range of
subject matter obtained from Canadian press reports, government press
releases, and host country agricultural officials and representatives.

*Disclaimer*: Any press report summaries in this report are included to
bring U.S. readership closer to the pulse of Canadian developments in
agriculture. In no way do the views and opinions of these sources
reflect USDA's, the U.S. Embassy's, or any other U.S. Government
agency's point of view or official policy.

**CANADA IMPOSES ANTI-DUMPING DUTY ON U.S. FROZEN PIZZA:** The Canada
Border Services Agency (CBSA) imposed a provisional anti-dumping duty on
imports of frozen self-rising pizza (also known as rising crust pizza)
imported from the United States. According to the CBSA, imports from the
United States during the investigative period were dumped by an average
39.4%, expressed as a percentage of the export price (i.e., price at
factory door). The CBSA has assigned "normal values" to U.S. pizza
manufacturers' shipments to Canada and informed those manufacturers that
they or the importer must pay (or post bond) for an anti-dumping duty
equal to the difference between the normal value and the export price.
The Statement of Reasons to be issued within 15 days will detail the
methodology for calculating the normal values. The CBSA will continue
its investigation regarding dumping and will issue a final decision by
August 16, 2004. The anti-dumping action affects the self-rising pizza
exports of two U.S. food companies, Kraft Foods Inc., Chicago and
Palermo Villa Inc., Milwaukee. The complaint was filed in late 2003 by
McCain Foods Ltd. of Florenceville, N.B., one of the world\'s largest
processors of frozen foods and the largest Canadian manufacturer of
frozen self-rising pizza. In July 2003, the company announced a
C\$29-million expansion of its Grand Falls, N.B. pizza plant, scheduled
for completion in May 2004. On the injury question, the Canadian
International Trade Tribunal which made a preliminary affirmative ruling
in March will hold a public hearing in Ottawa on August 16 and is
expected to issue a final (injury) ruling by Sept. 14.

**LIVE HOG EXPORTS TO THE U.S. ON A RECORD PACE:** Official data for the
January-March period of 2004 show that Canadian live hog exports to the
United States are on a record pace. In the first three months of 2004,
combined exports of Canadian slaughter and feeder hogs to the U.S.
reached 2.2 million head, 47% ahead of last year's level for the same
period. At the current pace, total live hog exports to the United States
would surpass 8.5 million head during 2004, a level representing almost
one pig in every four born in Canada. Manitoba and Ontario account for
more than 90% of total Canadian live hog exports to the United States.
The U.S. Department of Commerce recently initiated two separate
investigations against live swine from Canada based on a petition
submitted by the National Pork Producers Council. One is an
investigation into whether Canadian live swine are receiving subsidies
(the countervailing duty case) and the second is in response to
allegations that live swine from Canada are sold at below fair value
(the anti-dumping case).

**STRIKE AVERTED AT MAPLE LEAF FOODS HOG PLANT:** Late breaking news
indicates that a strike has been averted at the Maple Leaf Foods hog
plant in Burlington, Ontario. According to reports, 1,100 members of the
United Food and Commercial Workers Union ratified a new three-year
agreement. The plant workers had been without a contract since March.
Ontario Pork, the provincial producer organization, had contingency
plans in the event of a strike to export about 30 percent of the Maple
Leaf destined hogs to U.S. plants, with the rest going to alternate
Canadian packers in Ontario and Quebec. The plant, which has a weekly
slaughter capacity of 45,000 head has been processing about 36,000 hogs
in recent weeks.

**CHICKEN AGENCY ANNOUNCES PRODUCTION STRATEGY TO OFFSET B.C. MARKET'S
AVIAN INFLUENZA SHORTFALL:** In wake of the avian influenza depopulation
program in British Columbia, the Chicken Farmers of Canada (CFC), the
national organization for the supply managed chicken industry, announced
that producers in other provinces will increase production temporarily
to produce up to 20,000 metric tons of chicken to be delivered to B.C.
primary processors. Under the plan, B.C. producers will lease production
allocation to producers throughout the rest of Canada at C\$0.15 per kg
to help avoid supply shortages in B.C. The fee (about C\$3 mil.) will be
distributed to the B.C. Chicken Marketing Board, for distribution to
affected farmers. Between June and mid-September, CFC expects farmers in
other provinces to market up to 20,000 metric tons of additional
production for B.C. Once processed in the "home" province, the whole
birds will be delivered to designated B.C. plants, where processors will
customize the chicken to meet their client's needs (i.e. boneless,
skinless breast meat, thighs, marinated product, etc.). There will also
be increased production from farms on Vancouver Island and in the
interior region of B.C. not affected by avian influenza. As highlighted
in issue #14 (CA4030), B.C. processors will be given access to a
special, fast-track supplementary import program. Imports will come
chiefly from the United States.

**FEED MILL FALLS VICTIM TO B.C. AVIAN INFLUENZA OUTBREAK:** Landmark
Feeds, an independent operating company of Maple Leaf Foods Inc.,
announced the sale of its mill operations in Abbotsford to Ritchie-Smith
Feeds. As a result, the company will be closing its Abbotsford mill
effective May 31, 2004. A Landmark spokesman said that the decision to
divest interests in the Abbotsford mill operation was based on the
current over-capacity of feed manufacturing in the Fraser Valley
resulting from the recent outbreak of avian influenza, which has
significantly reduced feed demand in the region.

**EXPORT MARKET DEVELOPMENT FUNDING DOWN ALMOST 25% IN 2004:**
Agriculture and Agri-Food Canada announced that it will provide C\$19.6
million under the Canadian Agriculture and Food International (CAFI)
Program during 2004 to Canadian food and agriculture exporters to assist
them in their international trade promotion activities. The announcement
failed to point out that federal funding was well below the C\$26
million allocated for the 2003 program. Within the Agricultural Policy
Framework (APF) announced in 2001, the CAFI Program is a key element of
Canada\'s international strategy. The CAFI is designed to support
Canada\'s agriculture and food industry by helping to build successful
strategies in key international markets. In the market promotion area,
the CAFI Program matches industry funds dollar for dollar to support
promotional activities. The program is part of the C\$175 million in
federal funding over six years announced in June 2002 to support market
development for the Canadian agri-food industry and to cover the cost of
GOC efforts to liberalize agricultural trade.

**NEW ONTARIO APPLE BOARD:** The province of Ontario will create a new
provincial apple marketing board entitled The Ontario Apple Growers
under its Farm Products Marketing Act regulations. The former Ontario
Apple Marketing Commission was dissolved in 2001 after almost 60% of
growers voted to terminate it. Since that time, the industry has been
developing a new strategy. While the new boards main authority is to
negotiate the price of apples for juice with processors, it will also
have authority over all producers who own or rent 10 or more acres of
apple trees and to collect an annual license fee of C\$20 per acre.
Fresh apple marketers and processors will not be regulated under the
marketing regulation, but will be required to co-operate with the new
board by providing information on the industry and, if necessary, deduct
outstanding acreage fees for the board. The Ontario Apple Growers will
have an annual budget of approximately C\$320,000.

**Find FAS on the World Wide Web:** Visit our headquarters' home page at
[http://www.fas.usda.gov](http://www.fas.usda.gov/) for a complete
listing of FAS' worldwide agricultural reporting.

Recent Reports from FAS/Ottawa:

+----------------+---------------------------------------+------------+
| Report Number  | Title of Report                       | Date       |
+----------------+---------------------------------------+------------+
| ## CA4038      | Provisional Anti-Dumping Duties on    | 5/18/2004  |
|                | U.S. Frozen Pizza                     |            |
+----------------+---------------------------------------+------------+
| ## CA4037      | This Week in Canadian Agriculture,    | 5/14/2004  |
|                | Issue 15                              |            |
+----------------+---------------------------------------+------------+
| ## CA4031      | Oilseeds Annual Report                | 5/14/2004  |
+----------------+---------------------------------------+------------+

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