Factors Determining Hog Prices

CANADA - The Saskatchewan Ministry of Agriculture expects North American hog slaughter numbers, volumes of meat in cold storage and the value of the Canadian dollars to be key factors determining the value of Canadian live hogs heading toward the first quarter of 2009, writes Bruce Cochrane.
calendar icon 14 November 2008
clock icon 3 minute read

The Saskatchewan Ministry of Agriculture's November Hog Market Update indicates North American hog prices have continued to decline through the fourth quarter of 2008.

Livestock economist Brad Marceniuk says, while Canadian hog prices have been declining this fall, the lower value of the Canadian dollar has tempered the declines so Canadian producers probably haven't felt the impact as much as American producers.

He says the key factors affecting price continue to be U.S. weekly hog slaughter numbers and meat in cold storage.

Brad Marceniuk-Saskatchewan Ministry of Agriculture

U.S. weekly hog slaughter numbers over the last eight weeks continue to be higher than over the same period a year ago and this has led to increased pork production.

While slaughter numbers were higher, we have actually started to see some signs in recent weeks that U.S. slaughter numbers may be leveling off and could start to decline later in the fourth quarter.

In Canada weekly hog slaughter numbers have been increasing over the last few weeks compared to the same period a year ago.

A combination of more hogs staying at home due to COOL and a decline in the value of the Canadian dollar making Canadian processors more competitive have helped increase slaughter numbers in Canada.

This trend should really continue to increase into 2009 depending on changes in the Canadian dollar and further changes around COOL.

Marceniuk notes, with increasing U.S. meat production in 2008 and a decline in U.S. demand for meat, meat in cold storage has increased, almost one percent month over month and almost nine percent year over year.

He says U.S. weekly hog slaughter numbers, demand for pork and U.S. storage stocks will be key factors to watch in the United States while in Canada producers will need to keep an eye on the value of the Canadian dollar and the effects of COOL on their marketings.

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