Improved Hog Prices Projected in 2010

by 5m Editor
18 December 2009, at 11:16am

CANADA - The Manitoba Pork Marketing Cooperative reports the futures markets suggest break even hog prices by February or March and a return to profitability in April, May and June, writes Bruce Cochrane.

Canadian hog producers have endured two to three years of ongoing losses resulting from factors such as an over supply of hogs, a tenuous feed situation and a strong Canadian dollar.

Manitoba Pork Marketing CEO Perry Mohr observes recently we've seen a surprising counter-seasonal rise in hog prices.

Perry Mohr-Manitoba Pork Marketing

We've seen the market rise significantly in the last three to four weeks and that's been driven by a number of factors.

The export demand has been extremely strong in both Canada and the United States as well as the domestic demand.

We've seen some real positive things occur from that standpoint.

Subsequently we've seen hog markets rise at a time of year when the supplies are the greatest which is something for those of us that have been involved in the industry for many years is somewhat surprising.

It's a welcome surprise obviously given the fact that the producers have endured such a long period of zero or a lack of profitability.

When we look ahead into the future many of us believe that we will see somewhat of a seasonal decrease.

Typically at this time of year, once the processors get up their needs put aside for Christmas and the holidays, there is a bit of a softening in the price so we do expect that over the next couple of weeks there will be a softening in the price.

Heading into early January I believe that that trend will continue probably for the first two weeks as we work through the supplies of hogs that are going to build up over the Christmas period.

Mr Mohr says looking further ahead the futures prices suggest close to break even into February and March and possibly a period of profitability in April, May and June.

He says there are opportunities to lock in some profitable prices for the summer months right now.