Better Prices Seen For Canadian Hogs, Russian Tariffs A Variable

WINNIPEG, MB - Prices for Canada's hog producers have not been that favorable as of late, but values should see an improvement during the remainder of the first quarter...
calendar icon 13 February 2003
clock icon 4 minute read
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...right through to the end of the third quarter of 2003, according to projections made by industry analysts.

Just how much of an improvement occurs, however, will be dependent on the impact of Russia's decision to limit meat imports of poultry, beef and pork through the usage of tariffs.

Russia will impose quotas and award licenses for 90% of the beef and pork imports to traditional shippers in proportion to their share of imports from 2000 to 2002. In May, the remaining 10% will be tendered in an auction. During 2002, Russia imported about 700,000 tonnes of pork.

Janet Honey, a livestock analyst with Manitoba Agriculture and Food said the exact impact of the Russian tariffs may not be known for some time. "Basically you can still export pork into Russia, but with the tariff does that mean the Europeans will bite the bullet and still export there or will they begin seeking out different markets?"

She said those European shipments if they don't go to Russia, could impact where Canada and the US ship pork, with the anticipated price weakness more than likely to reflect all the way back to the producer.

The uncertainty surrounding the new meat import quotas that Russia plans to impose, steady US hog slaughter levels and other global issues have taken roughly C$5 to $10 per one hundred kilograms (ckg) away from estimated cash markets, Brad Marceniuk, an economist with Saskatchewan Agriculture, Food and Rural revitalization said.

Hog prices have traded in a relatively flat to slightly weaker range across North America over the past couple of weeks as weekly US slaughter numbers continue to be on the high side, Marceniuk said.

However, hog values were seen increasing by at least 10% over the remaining portion of the first quarter, he predicted. "While slaughter numbers have been a major factor keeping prices below long-term averages, slaughter rates in the US should drop below 2 million head per week and continue its decline through to the summer, based on recent US pig crop data."

Using Saskatchewan 100 index hogs as an example, Marceniuk forecast those values to range from C$120 to $140 per ckg for the remainder of the first quarter of 2003, between $135 to $160 ckg during the second quarter and $135 to $155 during the third quarter.

Honey concurred that prices will be better. "Hog prices heading into the second quarter should be 20% better than they were during the same period a year ago and fare roughly 25% better in the third quarter than at the same time in 2002.

Source: Resource News International via COMTEX - 12th February 2003
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