Prospects for Improved Grain Yields Brighten Outlook for Pork Producers02 September 2013
CANADA - The chair of Manitoba Pork Council says the prospects of increased grain production this year and improved hog futures prices have dramatically brightened the outlook for western Canadian pork producers, according to Bruce Cochrane.
Over the past year western Canadian pork producers have been losing money due to short feed supplies resulting from last summer's drought.
Manitoba Pork Council chair Karl Kynoch says grain growers he's talked to are reporting yields this year at the high end of average and hog prices are looking a little better so, if pork producers can secure grain at lower prices and lock in hog prices on the futures market they'll probably be looking at running profits later into the year.
Karl Kynoch-Manitoba Pork Council
The biggest single cost that we have to get a hog to market is the cost of feed.
It's over half of the cost of getting a pig to market, anywhere from half to three quarters of the cost so it's very significant.
When you increase the cost of feed by 25 per cent up to 50 per cent, you've got to get a lot more return just to cover that cost and over the past year producers had been losing a lot of money.
But this past summer feed prices have eased off, probably to the tune of a couple of dollars a bushel so producers have seen a significant drop in the cost of raising a hog over the past year as well as a lot of good grain yields going to be coming off so I think over the next little while we're going to see feed prices stabilize more at the price they're at now.
As we get closer to the corn coming off and get more of the wheat and barley into the bins there it's gong to help a lot.
It's a lot brighter future than we've seen in the last three years for the hog producer.
We're kind of hoping to continue on for many months ahead with some profit margins.
Mr Kynoch acknowledges, normally when we get into November through December pork producers start losing money but hopefully this year we can get through that period at least with a break even and get back into profits due to these high volumes of grain coming off.
He says that will help significantly.
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