Losses on Hogs Expected to Continue into 2010

CANADA - Trends in US hog slaughter numbers, pork production and meat in cold storage are expected to be the key factors influencing live hog prices heading into 2010, writes Bruce Cochrane.
calendar icon 11 September 2009
clock icon 3 minute read

North American hog prices have remained well below long term averages and producers continue to lose money.

Saskatchewan Ministry of Agriculture Livestock Economist Brad Marceniuk says, unless there's an unexpected spike in North American pork exports or a large drop in hog production, the low prices will likely drag into 2010.

Brad Marceniuk-Saskatchewan Ministry of Agriculture

In Canada slaughter numbers are actually moderately up in 2009 from 2008 and that's largely due to COOL and more Canadian hogs staying home.

In the US slaughter numbers over the last eight weeks were relatively flat from the same period in 2008 but up moderately in recent weeks actually.

US pork production is up moderately here over the last few weeks compared to the same period a year ago but, overall, US slaughter numbers really have not declined in 2009 as much as initially anticipated.

Domestic demand for pork in North America has been relatively good in 2009 while the export market has been weaker.

This is partly due to the H1N1 virus and partly due to increased pork production in countries such as China and Russia.

US pork exports to China and Russia for the first six months of 2009 were down significantly from the same period here in 2008.

Pork in cold storage has declined moderately here from June to July but it still remains higher year over year.

Looking at beef, chicken and turkey stocks, they've actually increased from June to July.

Looking at cold storage stocks in general, they continue to remain in the upper end of their five year average and I think they will keep meat prices from increasing significantly here in the short term.

Mr Marceniuk says, with reduced pork exports to China and Russia and an unlikely rebound to 2008 levels, the North American sow herd may need to decline by another five to ten percent.

He says it looks like Canada will introduce its second cull program but a US program would have a much larger impact on prices as the US sow herd is over four times larger than the Canadian sow herd.

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