Live Hog Prices Expected to Edge Up

CANADA - The Saskatchewan Ministry of Agriculture predicts live hog prices will improve in western Canada during the first half of 2008 but will continue to fall short or break even, writes Bruce Cochrane.
calendar icon 14 January 2008
clock icon 3 minute read

In 2007 hog slaughter numbers fell in Canada by about two and a half percent while in the United States slaughter numbers increased by about 4.1 percent.

Saskatchewan Ministry of Agriculture Livestock Economist Brad Marcenuck notes the latest U.S. Department of Agriculture's Quarterly Hogs and Pigs Report indicates U.S. hog slaughter numbers in 2008 will be even higher than 2007.

Brad Marcenuck-Saskatchewan Ministry of Agriculture

Hog prices have been trending lower over the last few weeks after making a small rebound in early December.

Current SPI index 100 hogs for January 10 are currently ranging from about 79 to 89 dollars per 100 kilograms.

High U.S. weekly hog numbers continue to be a major factor.

We've also had increased U.S. pork production, lower seasonal demand for pork and also some increased pork in cold storage year over year in the United States.

We expect hog prices to rebound some in 2008 with index 100 hogs for western Canada averaging about 90 to 100 dollars per 100 kilograms for the first quarter of 2008 and to increase to about 115 to 125 dollars per 100 kilograms for the second quarter of 2008.

We do expect the market will continue to be volatile.

With the changes in the supply demand estimates in 2008 we do not see a return to profitability in 2008 at this point for Canadian producers.

Looking at some of the factors, U.S. weekly hog slaughter numbers and demand for pork will be really key factors in determining where hog prices go. Especially with U.S. hog production increasing in 2008, those are the main factors to watch for.

Marcenuck points out lower seasonal demand at this time of year usually contributes to increased stocks of meat in storage.

He says combined stocks of pork beef and poultry at the end of November 2007 fell about 1.8 percent from one year earlier but increased meat production in December is expected to increase cold storage stocks for December, but that number isn't yet available.

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