Live hog prices are projected to bottom out in western Canada during the fourth quarter of 2008 and start to rebound near the end of the quarter and into the first quarter of 2009.

Brad Magnusson, with Credit Union Central in Winnipeg, says the combination of rising feed costs, a par Canadian dollar, the fallout from U.S. Country of Origin Labelling and record U.S. weekly hog slaughter numbers has squeezed cash flows and caused a huge cash crunch for the swine industry.

Brad Magnusson-Credit Union Central of Manitoba

The drop of the Canadian dollar is tremendously important as we export a tremendous amount of both live and meat products to the United States.

Anytime that the dollar is going to be falling is going to be positive.

We are conscious of the fact though that we are an oil producing nation and we could ultimately see that Canadian dollar move back up slightly over time.

That's something to consider but it's absolutely paramount that the dollar stays as low as possible as an exporting meat nation.

From a feed perspective absolutely incredibly important as well.

The feed costs doubling essentially in a very short period of time absolutely was devastating to individual producers, particularly if they were buying corn out of the United States or even barley.

You can't make profitability when corn is at eight dollars and barley is at 4.50 or five dollars.

Magnusson stresses Credit Union Central of Manitoba believes the hog industry is still very stable in Manitoba.

He notes we have a tremendous number of producers with equity in their operations and in western Canada we have some of the best producers in the world a fact demonstrated by our productivity numbers, our pigs per sow sold per year, our weights and the demand from U.S. producers and the consumers wanting to buy our pork.