CME: Canadian Breeding Herd Smallest Since January
US - CME's Daily Livestock Report for 30 April 2009.Canada’s swine herd continues to contract but at a slower year-over-year rate than in recent
quarters according to Statistics Canada’s quarterly Hog Statistics Report released on Tuesday. Canada’s
inventory of all hogs and pits on 1 April was 11.885 million head, 8.6 per cent lower than one year ago. That
inventory was comprised of 10.502 million head of non-breeding animals, 8.9 per cent lower than last year, and 1.383
million breeding animals, 6.2 per cent below 1 April 2008. That breeding herd is 17 per cent smaller than Canada’s all-time
high breeding herd of 1.644 million head back in January 2005.
As can be seen in the following chart, the Canadian breeding herd is the smallest since January
2001 when Canadian producers had 1.381 million head of breeding stock on hand. When combined with a
declining breeding herd, the combined US-Canadian herd is down 4.6 per cent since October 2007 — about the time
that feed costs took off as oil and grain prices exploded. The combined herd of 7.935 million head is the smallest
in our data set that goes back to 1982. There have been fewer breeding swine in the US and Canada at
some point since DeSoto and Coronado brought those first pigs across the pond but it has been a long, long
time! We apologize that we don’t know who was the first to bring pigs to Canada.

Canadian producers farrowed 750,400 litters in the January-March quarter, 6.9 per cent fewer than a year
earlier. Those litters yielded 8.049 million pigs born and a pig crop (ie. pigs saved) of 7.375 million head.
Those numbers are 6.9 per cent and 7.3 per cent lower, respectively, than one year ago. Canada’s pig crop per litter of 9.82
in January-March compares to 9.48 for the December-February quarter in the US. The percentage increases
in farrowings, pigs born and pig crop fit quite reasonably with the change in the breeding herd.
This pattern is quite familiar as the Canadian herd has been contracting for over 4 years. The liquidation
was originally driven by a stronger Canadian dollar that sharply reduced Canadian producers’ revenues
since Canadian pries are US prices converted to Canadian dollars. A stronger Canadian dollar means
fewer of them per US dollar. The Canadian dollar has weakened about 35 per cent since November 2007 but the
same higher costs that have hurt US producers have picked up where lower revenues left off. Canadian producers
have continued to lose money—at about the same rate per head this year as their US counterparts.
This week’s changes in CME Lean Hogs, Corn and Soybean futures prices have dimmed the
profit prospects for pork producers considerably. Two weeks ago, year-to-date performance and futures
prices indicated profits from May through June and average losses of $3.06/cwt carcass (just over $6/head) for
all of 2009. The same computations with prices from Thursday provide a profit forecast for only August and it
amounts to $0.15/cwt carcass. Year-to-date losses plus the futures-based forecasts now imply losses of
nearly $15/head for 2009. Pork producers have lost money, on average, in 15 of the past 17 months. A good
number of producers are nearing the limit of their operating capital so, should markets remain in their current
conditions, these projected losses could drive another round of breeding herd liquidation. Some producers will
be able to weather the storm based on past risk management decisions but they will likely be in the minority.

Further Reading
![]() | - | You can view the Canadian hog Statistics report by clicking here. |