WASHINGTON (AP)--Canadian producers have sold hogs at unfairly low prices in the U.S. and must pay penalties averaging 10.63 percent, the U.S. Commerce Department said March 7, siding with U.S. producers who say cheaper imports have sent prices plunging.

The final step in the process is a ruling from the U.S. International Trade Commission, which is expected by April 18.

"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," said Jon Caspers, a Swaledale, Iowa, producer and past president of the National Pork Producers Council.

Not all U.S. producers applauded the penalties. Some smaller Midwestern operations buy Canadian hogs and raise them in this country, relying on imports for their livelihoods.

"This decision hits American farmers with a tax that could put some small family farmers out of business," said former Agriculture Secretary John R. Block, speaking on behalf of the Pork Trade Action Coalition. "Trade barriers and duties will only hurt American farmers caught in the middle of an unjustified conflict."

Both the coalition and Canadian pork producers argue the U.S. pork industry is enjoying record profits.

"How can the U.S. industry argue that it is suffering material injury from imports of Canadian swine?" said Karl Kynoch, chairman of the Manitoba Pork Council.

The Commerce Department on March 7 affirmed its preliminary ruling last October. The department modified the penalties, which it had set at an average of 14.01 percent.

Higher duties have been in effect since October and are being held in special accounts until the case is finalized.

If the International Trade Commission overturns the earlier ruling that imports have injured the domestic industry, the excess duties will be refunded.

The case comes under U.S. trade laws protecting American producers against dumping, a practice in which imports are sold at prices lower than the home market or below the cost of production.

The decision applies to live hogs shipped from Canada and not breeding stock or pork products.

Commerce Department figures show that 8.5 million hogs worth $529 million were shipped into the U.S. from Canada in 2004, up from 7.4 million hogs worth $389 million the year before.

Date: 3/24/05