Producers Encouraged to Monitor Grain Production Estimates When Contracting Supplies

CANADA - The Saskatchewan Pork Development Board is encouraging hog producers to keep a close watch on grain production estimates as they secure feed supplies for the winter months, writes Bruce Cochrane.
calendar icon 3 October 2008
clock icon 3 minute read

With feed making up roughly 65 per cent of the cost of raising a hog, swine producers are encouraged to keep on top of the Agriculture Canada and US Department of Agriculture supply estimates and follow those closely as they secure supplies.

Sask Pork policy analyst, Mark Ferguson, says indications are that we're going to have a great crop in Canada with supplies of wheat and feed peas expected increase, supplies of barley expected to be constant and prices expected to decline as well.

Mark Ferguson-Saskatchewan - Pork Development Board

We've seen a significant decline in feed grain costs over the past month.

The Canadian Wheat Board feed barley pool return outlook released last week indicates that barley FOB Saskatchewan is going to be priced at about $3.30 a bushel and feed wheat is going to be about $3.92 and that's after freight is deducted.

This is a far cry from the prices we were looking at last year and in a year when feed wheat was priced at six to seven dollars a bushel and barley four to five dollars a bushel so the outlook is looking at lot better for the users of feed grains for the next year.

The decline in prices should mean about a 15 to 20 dollar savings per hog on the production cost side so it is very significant and it can be the difference between profits and losses.

The unfortunate thing is, even with the decline in feed costs, hog farms are continuing to operate with negative margins and what is needed is higher meat and higher hog prices in the long term.

Mr Ferguson says, while producers can lock in lower prices by forward contracting for barley and wheat, some may not be able to take full advantage of the lower prices because they may already have locked in prices at higher levels.

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