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Lower Feed Costs Expected to Maintain Marginal Fourth Quarter Profitability

by 5m Editor
28 October 2004, at 12:00am

CANADA - Farm-Scape: Episode 1632. Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council and Sask Pork.

Farm-Scape, Episode 1632

Manitoba Agriculture Food and Rural Initiatives predicts lower feed costs will maintain marginal levels of fourth quarter profitability in the province's swine industry.

Provincial Farm Management Specialist Peter Blawat says several factors will impact fourth quarter profitability in the swine industry including the new 14 percent antidumping duty on live Canadian hogs, stronger demand for pork and, especially, lower feed costs.

"Well the fourth quarter cost for hogs reflects the lower prices for feeds so we're looking at about a break even cost of 133 dollars for farrow finishing operations.

That's based on a 300 sow operation which is pretty typical in Manitoba for a family type of operation. With that type of cost and we're anticipating a fourth quarter price of somewhere around 155 to 160 and, if we are cautious and err on the lower side at the 155, we're looking at a profit of maybe about 22 dollars a pig which represents about ten or 11 percent return on investment.

Still they're making some money but that's really because of the lower feed costs. There's lots of cheaper barley and wheat because a lot of the crops were downgrade to feed.

The other big factor is soybean meal, canola meal dropped substantially over the past year from close to 500 dollars a tonne in the past winter, February March, to about 250 or 300 dollars."

Blawat says the average price for this quarter would probably have been a little higher if it wasn't for the US tariff.

However points out a lot of forecasts predict a strong demand for pork, resulting from BSE and the closed border, will help prop up the US price which will also bode well for Canada.

For Farmscape.Ca, I'm Bruce Cochrane.

5m Editor