Export Demand Key to Improving Hog Prices

CANADA - A livestock Economist with the Saskatchewan Ministry of Agriculture says export demand for pork will be key to improving hog prices over the next few months, writes Bruce Cochrane.
calendar icon 12 June 2009
clock icon 3 minute read

The Saskatchewan Ministry of Agriculture's June hog market update shows North American hog prices have been particularly weak over the last two weeks when seasonal prices are typically high.

Livestock economist Brad Marceniuk reports western Canadian hog producers continue to lose significant amounts of money on every slaughter weight hog sold, about 30 dollars per head.

Brad Marceniuk-Saskatchewan Ministry of Agriculture

A combination of factors have significantly impacted hog prices.

While we have seen some reductions in pork production in the US over the last few months the outbreak of H1N1 has appeared to reduce the demand for pork and particularly for North American pork exports.

Several countries currently have bans on North American pork and live hogs and pork in North America is currently being priced at a discount to the spreads between beef and poultry.

Looking in Canada, Canadian hog producers have been further impacted by the Country of Origin Labelling which has affected live hog exports into the US and they've also been affected by the Canadian dollar which has rallied significantly here in the last month an a half.

The dollar has gone from the low 80s to the low 90s and that's probably reduced hog prices here in Canada by about 10 dollars per head.

Demand for pork will be the key factor to watch for over the coming months.

A surge in North American pork exports is really needed to help improve pork prices.

We will need to see some of these bans on North American pork removed before these exports, I think, can actually increase significantly and also US hog slaughter numbers and pork production need to decline to help balance the supply and demand that we currently are seeing.

Mr Marceniuk suggests, if pork demand dose not improve over the next little particularly on the export side of things, North American hog production will continue to be forced to decline until the numbers bring supply back in line with demand and bring prices back to break even levels.

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