Higher U.S. Slaughter Pressures North American Live Hog Prices

CANADA - Saskatchewan Agriculture and Food reports increased U.S. hog slaughter numbers are the biggest factor affecting North American hog prices right now, writes Bruce Cochrane.
calendar icon 17 August 2007
clock icon 3 minute read

Yesterday the price for SPI index 100 hogs ranged from 131 dollars per 141 dollars per 100 kilograms.

Provincial livestock economist Brad Marceniuk observes hog prices have pulled back over the past few days after rallying pretty strong in early August but a weaker Canadian dollar over the last few days has helped reduce some of the impact of those falling hog prices.

Brad Marceniuk-Saskatchewan Agriculture and Food

U.S. daily hog slaughter numbers are one of the biggest factors affecting hog prices.

U.S. daily hog slaughter numbers have started to increase over the last week and have averaged about 400 thousand hogs per day over this last week and this number is higher than it's been in several weeks.

Also looking at it with seasonal cycles, we will start to see increased hog slaughter numbers and reduced seasonal demand which will put further pressure on hog prices as we move to the fourth quarter.

Pork in cold storage is also very important.

While pork in cold storage has been declining over the last two months, pork stocks are still actually higher than they have been a year ago at the same time.

With recent changes to the Olymel contract in Alberta, that's also going to put some additional pressure on prices over time.

The Canadian dollar has been also very important in the recent week for Canadian hog producers.

While U.S. hog prices have really come down in the last couple of days, the drop in the Canadian dollar has actually helped Canadian hog prices to not go down as much relative to the U.S. prices.

Looking forward Marceniuk predicts prices will continue to trend downward through the remainder of the year as per seasonal cycles.

He estimates index 100 hogs for western Canada will average from about 125 to 135 dollars per 100 kilograms for the rest of the third quarter before falling to a range of about 115 to 125 dollars per 100 kilograms as we reach the fourth quarter.

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