Shift in Feed Cost Advantage Expected

CANADA - Manitoba Pork Marketing predicts the rising price of corn in the United States will shift the cost advantage for feeding hogs back to western Canada, writes Bruce Cochrane.
calendar icon 23 July 2008
clock icon 3 minute read

Over the past 12 months the Canadian swine herd has been down sizing and that has started to impact exports contributing to a sharp drop in the number of butcher hogs moving south and, as corn prices rise, the number of weanlings moving south.

Manitoba Pork Marketing sales manager Bill Alford says, with Maple Leaf in Brandon ramping up to a full second shift, Spring Hill Farms in Neepawa expanding capacity, freight playing into things in a bigger way and lower production, there are fewer animals being exported.

Bill Alford-Manitoba Pork Marketing

Once we get into profitable levels you should see perhaps a feed advantage come back to western Canada given the corn in the U.S. is quite high priced and it appears to be well into next year.

If we have a good crop of feed grains we could see it be a net benefit to finish hogs in western Canada, particularly in Manitoba.

Corn is more directly priced related to the ethanol market, more than ever before.

Our primary feed grains are small grains like wheat and barley which aren't as readily available for ethanol use.

It doesn't convert as well so you see that demand for those grains level off where as you'll see the substitution go back to those grains.

Where typically right now a lot of corn has been fed in Manitoba, so you'll see a switch to the cheaper feed source obviously as farmers look for the least cost rations.

Alford observes no one is oblivious to oil prices and freighting hogs further is costing more resulting in a widening of the basis to go to U.S. plants.

He says last week's run up in the cash market indicates we're still seeing good demand for pork and it's just a matter of turning the corner on the whole industry to get things profitable on the production side.

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