Canadian Hog Statistics - February 2008

By Statistics Canada. Canadian hog inventories plunged during 2007 as a strong dollar and high feed costs challenged producers.
calendar icon 22 February 2008
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Hog Inventories: 1 January 2008

Hog industry under financial strain

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According to the 2008 January Livestock Survey, there were 14.0 million hogs on farms at the first of the month, 897,000 fewer than the same date last year. This is down 6.0 per cent from the previous year and 2.4 per cent lower than October 1, 2007.

Prices for slaughter and export hogs, largely determined in the United States and adversely influenced by a strengthening Canadian dollar, weakened during the second half of the year. Although variable, feed grain prices have surged over 50 per cent in 2007.

The financial pressure on hog producers can be highlighted by examining the results of a calculation that divides the hog price by a feed cost. The higher the ratio, the better the situation is for hog producers. By November 2007, the Ontario hog-corn ratio was 9.9, well down from 22.4 the previous year and considerably lower than the 10-year average of 20.8. The hog-barley ratio in Alberta showed a similar plunge.

Hog inventories trend down

thousands of head

Farmers continued to export hogs to United States at a record pace, 9.9 million during 2007. This surpassed the previous record established in 2006. Over two-thirds of exported animals were younger hogs, called weaners, for feeding in the United States. As feeding costs are increasing, the weaner export market remains relatively attractive to Canadian farrowing producers.

Domestic slaughter has continued to decline after reaching a record high in 2004, consistent with soft domestic demand for pork, lower prices paid to producers and higher feeding costs. Hog slaughter dropped 2.4 per cent between 2006 and 2007.

Livestock statistics and Concepts

Concepts

Inventory levels of the various types of livestock intended for sale in Canada are measured at specific times throughout the year. Surveyed operations are requested to include all animals located on the farming operation, regardless of ownership. They are also asked to include animals owned but pastured on a community pasture, grazing co-op or public land. Producers are asked to exclude animals owned but kept on a farm, ranch or feedlot operated by someone else. Inventory levels are estimated for cattle, calves, pigs, sheep and lambs. Estimates are also produced for certain categories of animals on the basis of age, sex, weight and/or purpose i.e. breeding or slaughter.

Current information on livestock inventories and related statistics such as supply and disposition enable those active in the agricultural sector to observe and assess changes in the industry, measure performance and keep the agricultural community and general public informed of developments. The primary data users are federal and provincial governments, producer boards, farmers and farm organizations, private business, academic research institutions and students. Livestock data assists governments in formulating agricultural policies and developing programs. Farming organizations use statistics in developing recommendations for producers and governments. Farmers make increasing use of prices, production, and marketing statistics in planning their operations. In addition, these livestock statistics are used in the calculation of farm incomes and in the Canadian System of National Accounts for indicators such as gross domestic product.

Methods

To produce livestock estimates, there are actually 6 different survey occasions. All of the survey occasions collect data primarily using Computer Assisted Telephone Interviews (CATI) although there are special procedures in place for the very large or complex operations.

Two of the occasions are the January Livestock Survey and the July Livestock Survey. These are large-scale general livestock surveys collecting data on cattle, hogs, sheep and other livestock, referring to inventories at the 1st of the month. The probability samples include about 10,000 operations at 1 January, and about 18,000 operations at 1 July. These surveys collect data during a three-week period in the western provinces, Ontario and Quebec. Regardless of when operators respond, they are asked to report inventories as of 1 January or 1 July. The livestock survey results are released, following processing and analysis, approximately seven weeks after the reference date.

Hog inventories are the focus of two other survey occasions collecting estimates of pig numbers at 1 April and 1 October. This survey was initiated in 1998 as estimates from 1978 to 1997 were based solely on analytical tools. For the hog surveys, a sub-sample of the prior livestock survey is used. The probability samples are 2,500 at 1 April and 1 October and, similar to the livestock surveys, these CATI surveys cover the western provinces, Ontario and Quebec. Producers are requested to report their inventories as of the reference date, although the data are collected during a seven day period near or before that date. The hog survey results are normally released three to four weeks after the reference date.

The June and November Atlantic Surveys are used to produce estimates for that region. These surveys are multi-purpose collecting data, primarily inventories, on livestock including cattle, hogs and sheep in addition to collecting data related to the area, yield and production of the principal field crops. The probability samples are 1,300 in June and 2,200 in November with the data collected by telephone. The results are released at the same time as the livestock results. For reference points where surveys do not exist for the Atlantic region, analytical tools are used to produce the estimates.

Recently a new piece of information has been added to the cattle statistics allowing users a better understanding of the cattle industry. In essence, the total inventories are distributed, on the basis of survey results and sector level balance sheets, to a specific farm type. The two major categories are dairy and beef. The beef sector is then broken down to beef cattle on cow/calf and mixed beef and dairy operations; beef cattle on feeder, stocker/finish operations; and, beef cattle on feeding operations, which include feedlots.

To summarize, the livestock statistics are survey-based estimates. The survey relies on a list frame that is established every five years by the Census of Agriculture and updated to include new entrants, particularly large hog operations. The probability sample surveys are conducted by telephone. The survey results are analysed and corrected before the data are used to analyse the industry and fine-tune the estimates. The survey data are reviewed in a board environment before the commodity analyst works with the data primarily using supplydisposition analysis. The results of the industry analysis are reviewed by the board before being sent to the individual provinces. Once the data are finalised they are released to the public and published. The principal data released include inventories and summarized supply-disposition tables. The data also flow, via farm income estimates, to the Canadian System of National Accounts. In addition the data are used in the calculation of net farm income projections, produced by Agriculture and Agri-Food Canada in co-operation with Statistics Canada and the provinces.

Further Information

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February 2008
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