Stronger More Stable Hog Prices Projected

CANADA - The Manitoba Pork Marketing Co-op is projecting stronger more stable live hog prices heading toward the end of 2008, writes Bruce Cochrane.
calendar icon 27 May 2008
clock icon 3 minute read

Over the past five weeks live hog prices have increased by about 60 dollars per 100 kilograms.

Manitoba Pork Marketing Co-op general manager and CEO Perry Mohr credits the normal seasonal price increase combined with a tremendous increase in domestic demand as well as some phenomenal U.S. export numbers.

Perry Mohr-Manitoba Pork Marketing Co-op

One of the things that we're experiencing right now is we're actually experiencing a lull in demand and, again, this is typical.

It's not atypical.

We've actually seen the market fall back about five dollars per CKG (100 kilograms) and it could fall back another five dollars per CKG before we take what I would call another run-up in the market place.

We're going to have a dead cat bounce here coming pretty soon and that will see the market respond favorably again.

Key factors to look for are again the demand equation, both domestically and the export market.

We've got record supplies in cold storage in the United States.

We need to continue to see those numbers decline as we head through summer if we're going to see the prices supported.

We're seeing a strengthening of our Canadian dollar which is having a negative impact on prices.

That's a factor that we need to keep our eye on.

I believe slaughter numbers in the United States are probably going to get down to that 2.1, maybe just under 2.1 million head on a weekly basis.

We need those to remain in that area in order for us to sustain this recovery.

And, if I didn't mention already, I meant to mention we need those export markets to continue to gobble up large amounts of pork.

Mohr notes live hog prices typically peak in the summer before dropping off into the fall and winter but he's optimistic, once prices peak this summer, that they'll dip slightly before stabilizing for the rest of the year.

He says liquidations are continuing on both sides of the border so there's fewer producers producing fewer hogs.

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