Weekly Purcell Agricultural Commodity Market Report Wayne D. Purcell Agricultural and Applied Economics Virginia Tech

Canada's latest survey of their hog inventory shows a herd that is continuing to grow, albeit at a slower rate than during the last several years. Their July 1 swine breeding herd was a record 1.6306 million head, up 2.57% from a year earlier. This was the 21st consecutive quarter in which the Canadian breeding herd has grown. During the first four years of this decade, their breeding herd grew at a 4.8% annual rate. In 1997, the Canadian pig crop was one-fifth the size of the U.S. pig crop. In the first half of this year, the Canadian pig crop was one-third the U.S. pig crop.

Statistics Canada reports that the number of sows farrowed during April, May and June (874,200) was 7.38% larger than during the same period in 2003. The quarterly pig crop was up even more: 7.97%. When merged with USDA's numbers, it appears that the combined U.S.-Canadian pig crop during the first half of 2004 was roughly 2.5% larger than during January-June 2003.

This implies that combined U.S.-Canadian hog slaughter will be up 2.5% in the second half of 2004. The inventory of market hogs by weight groups indicates that hog slaughter should drop close to year-ago levels by the end of 2004. During the first half of 2004, U.S. hog slaughter was up 3.86% and Canadian hog slaughter was down 1.49%. If this relationship continues, then U.S. hog slaughter could be up by well over 2.5% in the second half of 2004.

Farrowing intentions indicate that the number of sows which will farrowed in the Canada and the U.S. during the second half of 2004 will be very close to year-earlier levels. If producer follow through on these intentions, hog slaughter in the first half of 2005 should be similar to January-June 2004.

The reproductive efficiency of the Canadian sow herd continues to improve. During the last 12 months they have averaged over 20 pigs produced per animal in the breeding herd, three head more than the U.S. average.

Canadian producers have not fared as well this year as their U.S. counterparts on hog prices. During the first half of 2004, Manitoba barrow and gilt prices averaged 11.4% higher than during the first six months of 2003. Iowa-Minnesota prices were up 27% in the first half of 2004.