North American Slaughter Capacity Expected to Influence 2007 Live Hog Prices

CANADA - Saskatchewan Agriculture and Food expects North American slaughter capacity to be among the key factors affecting live hog prices over the next few months, writes Bruce Cochrane.
calendar icon 9 February 2007
clock icon 3 minute read

Hog prices have been trending upward over the last two weeks.

Saskatchewan Agriculture and Food livestock economist Brad Marceniuk notes for yesterday, February 8, SPI index 100 hogs were ranging from 132 to 142 dollars per 100 kilograms and he expects further improvement during the first half of the year.

Brad Marceniuk-Saskatchewan Agriculture and Food

Looking at some of the key factors affecting hog prices, while U.S. slaughter numbers over the last four weeks continued to be slightly higher than over the same period in 2006, slaughter numbers have actually decreased from December numbers.

Likewise hog weights have been reduced, reducing the amount of pork produced from December.

As we head into the summer or the fall, North American slaughter capacity may become a problem.

With the plant closure of the Mitchell's slaughter plant in Saskatoon and recent announcements by Olymel to close some plants in Quebec more Canadian hogs could be forced to go south to the U.S.

With current U.S. slaughter capacities near maximum levels any large increase in U.S. slaughter numbers could put some pressure on hog prices.

While the Olymel plant in Red Deer and the Maple Leaf plant in Brandon are planning to double shift and slaughter more hogs in the future timing will be of the essence.

Looking at the U.S. meat in cold storage, both pork and beef stocks in cold storage at the end of December of 2006 have actually been reduced from November but they are still a little bit higher than they were in December of 2005.

U.S. poultry stocks at the end of December are actually up though from November but they are down from December of 2005.

Marceniuk predicts index 100 hog prices for western Canada will average between 135 and 145 dollars per 100 kilograms for the first quarter of 2007 and increase to about 150 to 160 dollars during the second quarter.

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