U.S. hog slaughter numbers last week were down from the previous week but they continue to be high compared numbers one years ago.

As well Canadian live hog exports to the U.S. which increased significantly in 2007 continue to rise which will result in more Canadian hogs being slaughtered in U.S. plants.

Saskatchewan Ministry of Agriculture livestock economist Brad Marceniuk observes, over all hog prices in North America have been trending upward since the beginning of January and yesterday, February 12, the price for SPI index 100 hogs was ranging between 97 and 107 dollars per 100 kilograms, well below the long term average.

Brad Marceniuk-Saskatchewan Ministry of Agriculture

Key factors which have improved prices have primarily been strong pork demand which has kept U.S. pork stocks in cold storage relatively flat and has led to increased pork cutout values over the last two weeks.

Pork consumption seems to be keeping pace at this time.

While production of pork in the U.S. is up significantly last quarter, pork in cold storage stocks have actually been relatively flat so this has been a very clear signal that domestic and export demand has been relatively strong.

In contrast, looking at beef and poultry production, they have increased also in the last quarter while at a slower rate but beef and poultry in cold storage has actually increased over the last little while which is indicating their demand has not been as strong.

Marceniuk says low hog prices and high feed costs continue to cause significant losses on the prairies and, while prices are expected to improve in the second quarter, there is a high probability that producers will not be profitable during 2008.

He notes we have seen sow liquidation in Canada over the past few months and more recently in the U.S. which will reduce North American production at some future point which will be important in determining future hog prices.