The 1 January 2008 total inventory of hogs in Canada was 6 percent below a year earlier. However, the breading herd was down only 1.9 percent from January 1, 2007.

The reason why the total herd was down over three times as much as the breeding herd was due to the large feeder pig exports to the US

The breeding herd being down 1.9 percent was quite disappointing, because of the strength of the Canadian dollar relative to the U.S. dollar. Canadian hog producers have been losing money substantially longer than the U.S. producer. In the last four months ending in January the average cost producer, based on data from John Lawrence from Iowa State University, lost $25.22 per head marketing in the US.

The US losses had not occurred long enough for the December hogs and pigs number to be changed but the Canadians supposedly lost money most of last year.

Canada has income stabilisation programs for farmers. This data supports the possibility that Canadian producers are making decisions as to how many hogs to produce on income from the government rather than hog sale.

Exports Up

Pork exports in December were 8.7 percent above a year earlier. For all of 2007, pork exports were up 4.78 percent from 2006. Our exports to Japan in 2007 were up 5.73 percent, to Mexico down 26.12 percent, to Canada up 12.48 percent, to South Korea down 9.73 percent, to Russia up 16.96 percent, to mainland China up 103.72 percent, to Taiwan down 44.1 percent, to Hong Kong up 154.32 percent, to Australia up 16.21 percent and to other countries up 7.3 percent from a year earlier.

Pork imports for 2007 were down 2.13 percent from 12 months earlier. For 2007, the US was a net pork exporter of 9.89 percent production up from 9.53 percent in 2006.

Live hog imports from Canada in 2007 were at 10,004,348 head; up 14.2 percent from 2006. Feeder pig imports were up 11.8 percent and slaughter hog imports were up 19.4 percent from a year earlier. We expect live hog imports to stay large for sometime.

USDA released their long-term projections of meat consumption per capita to 2017. These projections show pork decreasing from 50.5 pounds in 2007 to 48.8 pounds in 2017 per capita. The projections show beef declining from 65 pounds in 2007 to 60.1 pounds in 2017 per capita and broilers increasing from 85.4 pounds in 2007 to 88.1 in 2017.

Assuming a little less than one percent growth in the population in US each year and no change in imports and exports from 2007, these projections indicate the beef industry in U.S. would be about the same size in 2017 as 2007. The pork industry would be 5 percent larger in 2017 than 2007 and the broiler industry would be 12 percent larger in 2017 than 2007.

Smithfield Cuts

Smithfield announced this week that they were going to reduce the size of their sow herd 40,000 head. With most of their sow herd under contract production, this reduction will take some time.

The average weights live for barrows and gilts last week in Iowa-Minnesota was at 267 pounds down 1.1 pounds from a week earlier and down 0.2 pound from a year earlier.

Live hog prices this Friday morning were $1.00 lower to $150 per cwt higher compared to a week earlier. Weighted average negotiated carcass prices this Friday morning were $0.22 per cwt lower to $0.09 higher compared to seven days earlier.

The top live prices Friday morning for select markets were: Peoria $37.00 per cwt, St Paul $41.00 per cwt and interior Missouri $40.25 per cwt. The weighted average carcass prices for negotiated hogs Friday morning were: western Cornbelt $58.01 per cwt, eastern Cornbelt $56.26 per cwt, Iowa-Minnesota $58.15 per cwt and nation $56.94per cwt.

Slaughter this week was estimated at 2228 thousand head under Federal Inspection, up 11.1 percent from last year.