US Cold Store Pigmeat is Impacting on Live Hog Prices

CANADA - US hog slaughter numbers and meat in cold storage are expected to be the main influences on live hog prices in the coming months, writes Bruce Cochrane.
calendar icon 14 September 2007
clock icon 3 minute read

As per normal seasonal cycles, hog prices have been trending downward since mid-August.

Saskatchewan Agriculture and Food livestock economist Brad Marceniuk says the current range, of about 114 to 124 dollars per hundredweight for SPI index 100 hogs, is below long term average and producers are losing significant amounts on each hog sold.

Brad Marceniuk-Saskatchewan Agriculture and Food

The main factors that are affecting prices today continue to be U.S. hog slaughter numbers and meat in cold storage which is reflected on demand for pork.

US hog slaughter numbers have started to increase in recent weeks which has put downward pressure on hog prices.

Increased slaughter numbers is normal for this time of year.

We've also seen an overall increase in overall meat in cold storage, particularly beef, turkey and chicken from June to July which has put some pressure on prices.

While pork in cold storage has actually decreased over the last few months stocks of pork continue to be higher than year ago levels.

US hog slaughter numbers, meat in cold storage, the global demand for pork will continue to be key factors influencing where hog prices will go.

With the current record projections for U.S. hog slaughter numbers to average over 2.2 million head per week in the fourth quarter of 2007 there is some concern we could still see some further downward pressure on hog prices depending on where hog slaughter capacity in the U.S. at that time.

In Canada any further changes to our pricing formulas or slaughter capacity with changes to our plants would also affect prices here in western Canada.

And, like always, the Canadian dollar is always a big factor.

The recent increase in the last few days has been negative on hog prices so we need to follow where that Canadian dollar goes in the next few months also.

Marceniuk projects index 100 hog prices will average from 110 to 120 dollars per hundred kilograms for the fourth quarter of 2007 rising to between 120 and 130 dollars for the first quarter of 2008.

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