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US Slaughter, Pork Exports and Pork in Cold Storage Expected to Drive Hog Prices for the Rest of 2006

by 5m Editor
18 August 2006, at 1:22pm

CANADA - Farm-Scape: Episode 2223. Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council and Sask Pork.

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Farm-Scape, Episode 2223

Saskatchewan Agriculture and Food expects US hog slaughter numbers, export demand for pork and volumes of pork in cold storage to drive live hog prices during the remainder of 2006.

Saskatchewan SPI index 100 hog prices have rebounded slightly since July ranging from 137 to 147 dollars per 100 kilograms as of yesterday and are relatively stable.

Provincial livestock economist Brad Marceniuk says, while prices are lower than they were in June, they're still relatively good for this time of year but they are expected to trend lower into the fall as slaughter numbers typically increase.

"Looking at the key factors with the most chance of fluctuating and influencing prices, some of these factors we're looking at are US hog slaughter numbers, pork exports and pork in cold storage.

Increased US hog slaughter numbers over the last four to five weeks compared to the same period in 2005 have been the biggest factor pushing hog prices lower since their peak in June of 2006.

As per normal seasonal cycles, hog slaughter numbers will trend upward into the fourth quarter of 2006.

This will negative towards hog prices.

Looking at pork exports, pork exports in Canada and the US continue to be higher year over year than they were last year.

This has been positive for hog prices and will continue to be positive for hog prices.

The third thing, pork in cold storage.

US pork in cold storage continues to be below year ago numbers and has dropped by almost 16 percent from a month ago.

Reduced pork in cold storage will continue to be positive for hog prices into the fall."

Marceniuk predicts prices will average from 130 to 140 dollars per 100 kilograms for the third quarter of 2006 but to trend lower, to about 120 to 130 dollars for the fourth quarter.

He expects producers to remain profitable for the third quarter before falling to near break even as prices trend lower in the fourth quarter.

For Farmscape.Ca, I'm Bruce Cochrane.

5m Editor