Live Hog Prices Expected to Remain Volatile but Stronger Moving Toward Spring

CANADA - Farm-Scape: Episode 2081. Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council and Sask Pork.
calendar icon 9 March 2006
clock icon 3 minute read

Farm-Scape, Episode 2081

Saskatchewan Agriculture and Food predicts a combination of factors is likely to result in continued volatility and price fluctuations but live hog prices are expected to show some strengthening as we move toward spring .

Saskatchewan Agriculture and Food Livestock Economist Brad Marceniuk observes, while live hog prices have continued to fluctuate, they have improved since the beginning of February when higher US slaughter numbers and higher volumes of chicken and pork in cold storage pushed prices down.

He notes Saskatchewan SPI index 100 hogs for yesterday were ranging from 119 to 129 dollars per 100 kilograms, an increase of 15 to 20 percent from one month ago.

"Based on the current lean hog future prices, Saskatchewan 100 index hogs are estimated to average 130 to 140 dollars per 100 kilograms for the second quarter of 2006.

The key factors that will continue to influence where hog prices go this spring are US hog slaughter numbers, the demand for pork, US meat in cold storage and the Canadian dollar.

Lower hog slaughter numbers in the United States over the last few weeks have been positive on US hog prices. The demand for pork in the US has been weakening over the last few months which has been negative for hog prices.

With chicken in cold storage up 46 percent year over year and pork stocks up 23 percent from December, increased meat supplies have put pressure on prices.

In Canada the strengthening Canadian dollar has been negative for local prices and will continue to put downward pressure on hog prices if the dollar continues to get stronger compared to the US dollar."

Marceniuk notes February Statistics Canada figures show the total inventory of hogs in Canada as of January 1, 2006 fell slightly from one year earlier.

He says Canadian production has leveled off, remained relatively flat in 2005, is not expected to grow much in 2006 and shouldn't be a major influencing factor on prices.

For Farmscape.Ca, I'm Bruce Cochrane.

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