Record US Hog Slaughter Expected for Q4

CANADA - A Saskatchewan based livestock economist predicts a return to profitability in the swine industry by the second quarter of 2009 if feed prices continue their current trend, writes Bruce Cochrane.
calendar icon 10 October 2008
clock icon 3 minute read

The Saskatchewan Ministry of Agriculture's October Hog Market Update released earlier this week indicates, while Canadian weekly hog slaughter numbers have remained relatively constant, U.S. numbers continue to be higher and are expected to reach record levels in the fourth quarter.

Livestock economist Brad Marceniuk says the big difference has been that U.S. production continues to rise while Canadian production has dropped with increased sow liquidation over the past few months.

Brad Marceniuk-Saskatchewan Ministry of Agriculture

Over all North American hog prices have been declining since the price spike in August.

Over the last month U.S. hog prices have declined by about five to six dollars per 100 weight which is about a seven to eight percent decrease.

In Canada we haven't seen quite the same decrease because of our weakening Canadian versus the U.S. dollar.

The Canadian dollar has actually dropped from the mid 90s to about the upper 80s over the last few weeks.

With record U.S. hog slaughter numbers expected for the fourth quarter we expect to see prices will weaken into the fall.

U.S. weekly hog slaughter numbers and North American pork exports will again be key factors to watch for to see where prices do go.

Based on the current lean hog futures prices, which have been declining over the past few weeks, index 100 hogs for western Canada are expected to average about 110 to 120 dollars per 100 kilograms for the fourth quarter, 125 to 135 dollars per 100 kilograms for the first quarter of 2009 and to increase to about 150 to 160 dollars per 100 kilograms for the second quarter of 2009.

Depending on where feed prices go, if they continue to decline into 2009 western Canadian producers could reach break even level by the second quarter of 2009.

Marceniuk notes, from July to August, U.S. meat in cold storage has increased by about one percent.

He says we've seen increases in beef, chicken and turkey while pork has decreased over the last month although it is still about five percent higher year over year.

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