The most important sources of the anticipated production increase next year include larger imports of Canadian swine--of which a greater proportion will likely be small animals for finishing in the United States--higher litter rates from a largely stable U.S. breeding herd, and higher average dressed weights. Despite moderately higher prices for hog ration inputs that are anticipated next year, the trend of feeding hogs to larger live weights--yielding higher average dressed weights--is expected to continue.

U.S. imports of Canadian swine are expected to increase 5.6 percent next year to 9.4 million head, from forecast 2006 imports of 8.9 million head. The proportion of imports comprised by animals weighing 50 kilograms or less is expected to increase next year beyond levels seen in 2005--66 percent--and to surpass the highest level achieved--68 percent in 2003. Continued appreciation of the Canadian dollar, which tends to make Canadian pork products more expensive in international markets, is likely to persist in limiting prices that Canadian slaughter operations can pay for hogs.

Source: Cattle Network