Lower Feed Costs Ease Pressure in Hog Industry

CANADA - Despite negative margins and substantial herd reductions, Saskatchewan pork producers remain convinced that the province is still a good place to raise hogs, writes Bruce Cochrane.
calendar icon 1 October 2008
clock icon 3 minute read

Over the past 15 months Canadian swine producers have faced low hog prices due to an oversupply, high input costs, especially feed costs, and the effects of a strong Canadian dollar.

As a result a number of Saskatchewan producers have exited the business, especially the smaller ones, and liquidated about 20 percent of the province's breeding herd through the federal cull breeding swine program.

Saskatchewan Pork Development Board general manager Neil Ketilson says there's still lots of hogs around which is bearing on the market but feed costs are starting to come down as we move toward what's expected to be a better year in 2009.

Neil Ketilson-Neil Ketilson

Roughly 65 percent of the cost of raising a hog is feed.

So, with costs of barley at four and a half to five dollars and wheat at six to seven, it was costing roughly 100 dollars an animal to feed a hog.

If you use the comparative that current prices are at, with three dollar barley and four and a half dollar wheat, it brings it down by a third so we're back looking at 65 dollars or 70 to feed a hog.

Therefore it would be saving producers about 30 bucks an animal.

We all know that the grain farmers have had a good year and I think they've had a good crop now so I think they'll be able to do OK.

We certainly need some reprieve from something and the feed grain prices I think is going to be one of them.

Ketilson is convinced there is a place in Canada for a profitable hog business.

He recalls it was the darling of the world a few years ago and he doesn't believe the fundamentals have changed.

He says Saskatchewan has a large land base that's conducive to raising hogs and a large grain base that needs the livestock industry as a demand source.

He believes hog prices will be stronger in 2009 and costs will be down.

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