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CME: Canadian Breeding Herd Down from July

by 5m Editor
25 August 2009, at 9:51am

US - We discussed the combined US and Canadian hog and cattle numbers last Thursday but thought some more detailed information on the Canadian pork industry might be helpful since the changes there have been so large for so long, write Steve Meyer and Len Steiner.

Some key information from Statistics Canada’s Hog Statistics report are:

  • Canada’s swine breeding herd is down 4.6 per cent from July 2008 to 1.38 million head. That herd is 15.6 per cent smaller than Canada’s peak breeding herd back in January 2005. The curious part of the July number is that is was only fractionally lower than the April figure in spite of the liquidation of Stomp Farms (about 12,000 sows) in June.

  • The reduction of Canada’s herd plus the slow reduction of the US herd puts the combined breeding herds 3 per cent lower than one year ago (graph below). The pace of decline slowed for both countries this summer but it is very likely that it has picked up again after the huge selloff in Lean Hogs futures contracts during July. Many analysts believe that the two countries need to cut an additional 400,000 sows, about the same as they have cut since October 2007 when the combined herds peaked at 7.752 million head.
  • Canada’s market herd on 1 July numbered 10.725 million head, 6.7 per cent lower than on year ago. As has been the case for some time, the largest decline in Canadian pig numbers can in the under-20 kg category, which was down 11.3 per cent. In the past, these larger declines in the light-weight inventory have been driven by larger exports of Canadian weaned and feeder pigs to the US But those shipments are 1.135 million (26 per cent) lower this year. The larger decline in light-weight pigs is more likely driven by the fact that producers of these pigs have borne a huge share of the economic pressure this year. That is especially true for those who sell on spot markets where pig prices have been below $10/head for several weeks.

  • Farrowings in the April-June quarter were 7.7 per cent lower than one year ago — a number probably more reflective of the spring quarter’s breeding herd that was over 6 per cent lower than in April 2008. Producers in the western provinces farrowed nearly 10 per cent fewer sows than one year ago while those in the east farrowed 4.6 per cent fewer litters. That also continues a longrun pattern of larger cuts in the west — a fact at least partially (and many believe largely) attributable to Quebec’s provincial farm support programs.

  • Farrowing intentions for the fall Q3 and Q4 show this regional disparity even more starkly. Nationwide, Canadian producer intend to farrow 7.5 per cent fewer litters in Q3 — the west is down 14.4 per cent and the east is down 0.5 per cent. The Q4 numbers aren’t that out of balance but western producers plan to farrow 4.5 per cent fewer litters while the eastern producers plan to farrow 0.6 per cent fewer. Nationally, Canadian producers plan to farrow only 2.5 per cent fewer litters in Q4.

NOTE: All these numbers came from a survey done in early July and represent 1 July figures. While they are of value for plannint, much has changed since then and we suspect that the September report data will be different.