High US Hog Slaughter and Low Chicken Prices Pressure Live Hog Prices

CANADA - Farm-Scape: Episode 2057. Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council and Sask Pork.
calendar icon 10 February 2006
clock icon 3 minute read

Farm-Scape, Episode 2057

Saskatchewan Agriculture and Food is blaming high hog slaughter numbers and low chicken prices in the US for a dramatic slide in live hog prices.

Over the past two weeks live hogs prices have taken and unexpected slide. Yesterday Saskatchewan SPI index 100 hogs were ranging from 106 to 116 dollars per 100 kilograms.

Provincial Livestock Economist Brad Marceniuk estimates, with the current low hog prices, producers are losing 10 to 20 dollars per market hog sold.

"US hog slaughter numbers have been higher than anticipated with slaughter numbers over the last four weeks about 2.8 percent higher than over the same period in 2005.

Also US hog slaughter weights have been higher than in 2005 which, when combined with higher slaughter numbers, have increased total pork production and supply by about 4.5 percent over the last four weeks compared to the same period in 2005.

The demand for pork also appears to have declined in the face of increased competition from lower chicken prices. USA chicken stocks in cold storage have increased significantly over the last year and current chicken prices are very depressed.

Chicken breasts in the United States are currently selling for under one dollar per pound but are expected to rise. While current hog prices are depressed we expect to see some rebound into spring as long as long as US hog production and slaughter numbers are reduced as per seasonal trends.

The demand for pork and global meat trade, particularly poultry products will be key factors in determining where hog prices will trend."

Marceniuk notes, because of the avian flu, exports of US poultry are down forcing both beef and pork to compete with chicken.

Based on the current lean hog futures prices, he estimates, Saskatchewan index 100 hogs will average about 115 to 125 dollars for the remainder of the first quarter of 2006 and about 130 to 140 dollars per 100 kilograms for the second quarter of 2006.

For Farmscape.Ca, I'm Bruce Cochrane.

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