Per Hog Losses Deepen as Meat Starts Moving into Storage

CANADA - The CEO of the Manitoba Pork Marketing Co-op Inc. reports, as North American production of pork has started to overtake consumption, losses to Canadian producers have deepened, writes Bruce Cochrane.
calendar icon 13 November 2007
clock icon 3 minute read

Key factors contributing to the current losses being recorded in the Canadian swine industry include the high value of the Canadian dollar, the high cost of inputs, especially feed, and record U.S. slaughter numbers.

Perry Mohr recalls a couple of weeks ago it was widely reported that producers were losing 30 to 50 dollars a hog but, with prices starting off the week at around 70 dollars per animal, those losses are now running closer to 50 to 70 dollars per animal.

Perry Mohr-Manitoba Pork Marketing

Some people awhile ago were somewhat impressed by the fact that the U.S. was killing 2.3 million animals a week and the fact that there wasn't a lot going into storage but we've had consecutive, I think six weeks in a row now, that the kill has been 2.3 million head or greater.

Some of the product is starting to go into storage and that's one of the reasons why we've seen live prices slide even further.

Thankfully cutout values in the states have held up fairly well meaning to me that there is fairly good demand especially in the export markets.

I think key to seeing the domestic demand increase is if the packers are buying hogs for 70 or 80 dollars eventually some of those savings have to be passed onto the consumers and the consumers will buy more pork once it becomes a better value to them.

So I think that's key to getting more pork into the shopping carts in North America here.

While the losses are prompting Canadian producers to scale back production,

the Americans continue to increase output.Mohr notes Canadian producers have been operating in the red for the past four to six months but the Americans have only been losing money the past couple of months.

He suspects, because the Americans are expanding, prices could remain low longer than many people would hope or expect.

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