Stronger Canadian Dollar Weakens Canadian Hog Prices

CANADA - Farm-Scape: Episode 1366. Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council and Sask Pork.
calendar icon 21 October 2003
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Manitoba Pork Council

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Manitoba Pork Council and Sask Pork

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Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork.

Farm-Scape, Episode 1367

A livestock market analyst with Manitoba Agriculture and Food estimates the increased value of the Canadian dollar is shaving 12 percent off the price of live Canadian hogs.

Provincial Market Analysis and Statistics Branch Manager Janet Honey says hog prices are better than one year ago, when a glut of US poultry caused by a Russian ban flooded the market, but they could have been much stronger.

She says the main factor that has impacted hog prices this year in Canada has been the stronger Canadian dollar.

"On average this year it looks as if the dollar will be 12 percent higher than last year but if you look at it on a week to week basis, in some weeks, it's been up as much as 20 percent from the same week a year ago.

Normally a dollar increase of about 12 percent would take place over a number of years. It wouldn't just happen within one year and that has been the problem because producers have not had time to adjust.

This isn't the largest increase or decrease that we've seen in the dollar at all. If you go back to '86 you'd see that the dollar increased until '91 and then the dollar dropped but, again, it was over a longer period of time.

The impact on hog prices obviously depends on what week you're looking at but on average this year we're looking at a drop of about 12 percent in prices compared to what they would have been if the dollar had been the same as last year"

Honey says the other key factor has been the large number of Canadian hogs moving into the United States.

She says Canadian packers have been cutting back kills to trim losses prompting higher shipments south which has hurt prices there, in turn, reflecting back on Canadian prices.

She says, while hog prices are about 30 percent higher than one year ago, they could have been stronger if it weren't for the higher dollar and the increased exports south.

For Farmscape.Ca, I'm Bruce Cochrane.

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