Substantial Run-Up in Hog Prices Projected

CANADA - The Manitoba Pork Marketing Cooperative is predicting a substantial run-up in live hog prices over the next few weeks, writes Bruce Cochrane.
calendar icon 23 April 2009
clock icon 3 minute read

Over the past two to three years a combination of factors ranging from excess hog numbers to high feed costs to the high Canadian dollar followed by the global economic melt down and US Country of Origin Labelling have eroded the profitability of Canadian pork producers.

Manitoba Pork Marketing Co-op CEO Perry Mohr says the stars have been lining up for a significant increase as hog supplies decline heading toward summer.

Perry Mohr-Manitoba Pork Marketing Cooperative

The world economic challenges have probably influenced the up-side potential of that run-up but we do expect, probably over the course of the next three to four weeks, to see hog prices jump anywhere from 20 to 40 dollars 100 kilograms maybe even for a week or two, compared to where we are today, it might be 50 dollars per 100 kilograms higher.

What are the factors involved with that?

Quite honestly reduced hog supply in the United States.

The reduction has been exacerbated by the fact that there's fewer Canadian butcher hogs and fewer Canadian weanlings going down there.

The Canadian dollar has relaxed.

It's been bouncing between 79 and 81 cents for the last little while.

That's going to add 20 to 25 dollars to the equation as compared to where it was a year ago when it was a buck or 1.10 or par.

We've had some good things happen.

Just from a cost of production standpoint we've seen feed prices lowered considerably.

Of course that could change depending on planting conditions etceteras.

I think hog producers will get into some profitable months this summer.

How long it will last, I'm hoping it'll last into September and I'm hoping when we typically see hog prices go down in the fall that they won't go down as far as they typically do.

Mr Mohr says, after three years of negative returns, producers need a sustained period of profitability.

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