By Andrew Heck
When pigs fly: It is an expression used to cast doubt on unlikely circumstances, but with the help of Canadian airports, exports of agricultural commodities – including pork and live swine – are taking flight.
While most pork moves through the supply chain via truck and container ship, air freight is becoming an increasingly popular option for processors and exporters who can justify the cost, especially when it comes to delivering the highest-quality products to markets that are willing to pay.
Sky-high consumer demand drives profits
Sunterra Meats of Trochu, Alberta – approximately 150 kilometres northeast of Calgary – has been sending fresh pork to select Asian destinations for several years, in addition to selling much of its product through Sunterra Markets locations in Alberta’s largest cities. Savvy overseas consumers are more than willing to pay a higher price for fresh Canadian pork loin, side ribs and belly, even compared to cheaper products more widely available in their home countries. As a prime example, in 2017, Costco Japan replaced its U.S. chilled pork products with Canadian pork, resulting in a 300-tonne monthly increase in sales. Associating Canadian pork with high quality has long been an important focus for the entire sector.
In 1986, Canada became one of the first countries to implement a national hog carcass classification system, employing electronic grading probe technology, which values carcasses based on objective measurements of both fat and muscle content. Sunterra regularly ships slice-ready primals with four-out-of-five muscle colour, fat colour and marbling criteria to high-end retailers in China and Japan, where finishing cuts are performed before the products is packaged using Sunterra-branded materials and labelled with the local retailer’s price tag.
Sunterra’s consumer-facing export products feature the Verified Canadian Pork (VCP) branding – a mark of distinction in Asian markets, as established in the Canadian Pork Council’s (CPC) independently developed Made-in-Canada Hog Price Report, which evaluated Canadian pork’s place in global markets. In Japan, pork of Canadian origin commands an observable premium over and above similar products of U.S. origin. The VCP program is backed by farmers’ quality assurance commitments through the Canadian Pork Excellence (CPE) program.
“A major difference between here and Asia is that they are more brand-conscious than us,” said Tony Martinez, former Vice President, Sales and Marketing, Sunterra Meats. “The brand represents the story, and they want to know that story. That’s important for our company.”
In June 2019, following a diplomatic dispute and consequent ban on Canadian pork exports to China, Sunterra’s shipments to the country came to a temporary halt.
“Pre-ban, we were sending three to four metric tonnes of product to China every week,” said Martinez. “Post-ban, we’ve been faced with some new challenges related to regulations and seal requirements.”
The challenge is related to the location where Canadian Food Inspection Agency (CFIA) seals are applied to the product. Previously, Sunterra was able to truck unsealed pallets to Edmonton International Airport (EIA), where they were then sealed and loaded onto an airplane. Now, per the CFIA’s Safe Food for Canadians Regulations, introduced in January 2019, each pallet must be sealed at a federally inspected processing facility by a CFIA inspector. The problem is the distance between the CFIA inspectors at EIA and Sunterra’s plant 200 kilometres southeast of the airport.
“It has become a bit impractical for larger loads,” said Martinez. “If we’re trying to send the same volume as we did before the change in regulations, now we need to individually seal and provide documentation for each pallet, which amounts to a lot of paperwork.”
And while paperwork is an administrative hassle at best, at worst, it can be the source of controversy. When China stopped imports of Canadian pork, it was under the pretext of inaccurate inspection certificates. This climate of concern leaves Martinez wondering if something similar could happen again.
“It makes us a bit paranoid, since it’s the kind of thing that could cause trouble. We already saw it happen once,” said Martinez.
As of July 2021, all food for export being transported on passenger or cargo flights must go through an enhanced security check, per Transport Canada requirements. This means products will need to be unloaded at the originating airport, X-rayed, physically opened up for inspection by CFIA, resealed, then reloaded before departure.
In June 2020, CFIA launched a pilot project to address the problem of sealing, working with stakeholders such as the Canadian Pork Council (CPC) and Canadian Meat Council (CMC). At that time, CFIA inspectors headed to EIA to oversee and re-apply the seal to 20 tonnes of chilled pork to China, as part of the test. The shipment, originating from Sunterra, arrived in China within days and was released to the importer in good condition. EIA provided support for the project and assisted Sunterra in obtaining and implementing the sealing equipment.
Despite regulatory concerns, Sunterra is confident that shipment volumes will eventually recover as they work with CFIA to smooth out any wrinkles in the system. For the markets served by the company, a steady stream of Canadian products not only satisfies a purchasing trend but also helps relieve a domestic industry that has been decimated by the effects of African Swine Fever (ASF) since August 2018, along with changes in consumer behaviour that have been spurred by the spread of COVID-19 since early 2020.
Breeding stock is uploaded to the cloud
From premium pork to breeding stock, companies far and wide across the value chain are making using of air travel when the margins make sense. Saskatoon-based Fast Genetics has moved animals by plane to locations like China in the past, mostly via airports in the U.S.
“For us, it’s about recognizing a need in a place like China, where the government is attempting rapid re-population,” said Sarah Heppner, Marketing Manager, Fast Genetics. “ASF has driven a shortage, and the government is trying desperately to rebuild production models; however, tensions between China and Canada have made exporting difficult at certain times.”
For Alliance Genetics Canada, a 15-year partnership with South Korea has resulted in pig movements to that country annually for several years. While COVID-19 delayed the company’s most recent shipment – which usually takes place early in the year – it was delivered, albeit later than desired, in November 2020. According to the company, the quality of its breeding stock is the main reason why business continues to flourish in spite of hurdles to global trade.
Meanwhile, for companies like PIC, destinations in Europe and South America are locations where pigs are desired. The company relies heavily on air transport to meet its business needs beyond North America. PIC raises its genetic improvement stock on nucleus farms in Saskatchewan and South Dakota, which are the source of live animals for export, especially boars and gilts, in addition to semen.
“Air shipments ensure our supply remains protected against the incurrence of disease,” said Tom Riek, North America Health Assurance Veterinarian, PIC. “The airplane offers a controlled environment, and the speed of transport helps mitigate health risks.”
One of PIC’s recent endeavours is a project that ships one or two full Boeing 747s every six to eight weeks out of EIA to a commercial producer in eastern Europe. Veterinary certificates and regulatory processes vary from one jurisdiction to another, and the relationships between Canada or the U.S. and those jurisdictions can impact decisions. It is also one of the reasons why PIC operates nucleus farms on both sides of the border.
“Export requirements for some countries are simple, while others are complex,” said Riek. “Our export coordination team is based in Tennessee, and they are responsible for scheduling the shipments.”
Navigating the intricacies of protocols is part of what Riek does alongside CFIA. Through CFIA, Riek and PIC are able to make the necessary arrangements to see the uninterrupted flow of products to foreign clients.
The reliability and quality of products delivered by air builds client confidence and keeps the venture profitable for PIC. The company ships ‘grandparent’ animals for clients to produce ‘parent’ stock, which will then be used to breed the first generation of animals sent to slaughter. The multiplication process amplifies the value of the grandparent animals, making them highly coveted.
Edmonton International’s reputation reaches for the stars
While it was only Canada’s fifth-busiest airport in terms of annual passenger traffic prior to COVID-19, EIA is the country’s largest by physical area – a significant advantage over other major metropolitan airports when it comes to developing facilities to service cargo shipments.
“It’s part of our development strategy,” said Alex Lowe, Manager, Global Network Development (Cargo) Air Service and Business Development, EIA. “We know that air freight is not always number-one for exporters, but we are working on building strategic relationships to help Canadian businesses reach their full potential.”
EIA’s focus on moving products more than people is contrasted by some other Canadian international airports, including Calgary, but it comes down to what each location offers in terms of transportation logistics and priorities.
“Speed is the main advantage of air freight,” said Lowe. “It allows our clients to deliver products much quicker than other methods, and that speaks to a perceived value of freshness from farm to fork.”
With market-based struggles hampering Alberta’s oil and gas industry in recent years, moving agri-food products in particular has been a target for EIA. The disruption to passenger traffic, as a result of COVID-19, has also played into this consideration. Perhaps surprisingly, the airport handles not only commodities from western Canada but also items like cherries from Washington state – one of EIA’s proudest crowning achievements.
During peak cherry harvest, which is only a few weeks long in the summer, airports in Seattle and Vancouver quickly reach capacity, and fruit growers are left looking at the next best options: Los Angeles and Edmonton. While the distances between interior Washington and Los Angeles or Edmonton are comparable, factors such as traffic congestion and weather make the difference for exporters. Navigating the busy labyrinth of southern California can be a headache, and the state’s hot temperatures – while ideal for growing a wide variety of crops – create challenges for keeping product cool. For those reasons, the route from Washington to Alberta just makes more sense.
All major airports in Canada are publicly owned through the federal government. A lesser-known mandate for airports, aside from the obvious, is supporting economic development in the communities they serve. All told, while air freight is not usually the first thing that comes to mind when the transportation of pigs and pork is concerned, it can and does play an important role in facilitating movements and stimulating growth for the industry.
Keep your eye on the sky and feet on the ground
Success stories in the pork industry seem to be few and far between these days, but the use of air freight to move pork and live swine is a win for the modern Canadian pork value chain. More than providing a novel alternative to conventional transport, it signifies that the industry is stepping up to the plate to meet the needs of elite, emerging and evolving markets, where high quality wins over satisfied, paying customers. And that should sound good to just about anyone.
Next time you find yourself glancing up at a jetliner, consider that tens of thousands of feet overheard might be a shipment of premium meat raised on your farm or the genetics sector’s best and brightest candidates for populating foreign herds. Canada’s $24-billion annual swine industry depends on global partnerships, which are enhanced when trade routes are open and abundant.