Determination of Fourth Quarter Hog Prices Expected
11 September 2008  Farm-Scape is sponsored by
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Saskatchewan Ministry of Agriculture livestock economist Brad Marceniuk reports North American hog prices have declined significantly over the past few weeks, driven primarily by increased U.S. slaughter numbers and weakness in pork demand and, while we have seen some recovery over the past few days, prices are still down about 20 percent from mid-August.
Brad Marceniuk-Saskatchewan Ministry of Agriculture
While Canadian hog production and hog slaughter numbers are down in 2008 we're seeing U.S. hog production and U.S. hog slaughter numbers are still increasing which has actually increased overall hog production in North America in 2008.
Looking at cold storage stocks, pork in U.S. pork in cold storage has declined over the last few months while overall meat in U.S. cold storage has actually increased over the last few months.
Looking at meat in cold storage year over year from July of 2007, meat is actually up about nine percent with increases coming from pork, chicken and turkey.
Looking at U.S. hog slaughter numbers, while North American demand for pork has declined for the first seven months of 2008, the strong growth in export demand has been very positive for live hog prices during the summer while hog slaughter numbers have actually been increasing.
U.S. hog weekly hog slaughter numbers continue to be higher year over year and are up about nine percent from 2007.
Based on current projections, we're seeing U.S. hog slaughter numbers could exceed over 31 million head in the fourth quarter of this year which is a new record and it really could test slaughter capacities.
Marceniuk says, while global demand for North American pork has been strong and exports have been increasing, growth in pork exports may be slowing down which has led to the recent price weakening.
He expects U.S. slaughter numbers combined with North American pork exports to be the key factors influencing hog prices in the fourth quarter.
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