Farm-Scape, Episode 2131

Saskatchewan Agriculture and Food predicts live hogs prices will hold around the break even mark for the remainder of the second quarter of 2006 before falling below break even in the third and fourth quarters.

Over the past two weeks, fueled primarily by increased demand for pork with the arrival of the barbecue season and reduced US slaughter numbers, falling to under two million head per week, live hog prices have risen by over 20 percent

Saskatchewan Agriculture and Food Livestock Economist Brad Marceniuk notes Saskatchewan index 100 hogs are currently ranging from 126 to 136 dollars per 100 kilograms and most producers are now breaking even but, he cautions, a combination of factors will result in continued volatility over the next few months.

"The key factors that are likely to play a significant role over the next little while, are US hog slaughter numbers. Further reduction or stabilization in US hog slaughter numbers will be positive for hog prices. Demand for pork. Any increased demand for pork into the summer with the barbecue season will be positive for prices.

Global meat trade will also be a factor. We've seen reduced global trade of US poultry being very negative on domestic prices year over year. US meat in cold storage. There's been increased US meat in cold storage which has been negative for meat prices and could further cause prices to fall into the fall. The Canadian dollar. Our Canadian dollar has been strengthening verses the US dollar.

It appears that the Canadian dollar may continue to strengthen over the next few months and that will continue to be negative on Canadian hog prices."

Marceniuk expects live hog prices to remain in the 126 to 136 dollar per 100 kilogram range for the remainder of the second quarter of 2006 however he expects prices to fall below break even levels into the third and fourth quarters.

For Farmscape.Ca, I'm Bruce Cochrane.