Pork Producers Pushed Back to Profitability

CANADA - The Saskatchewan Ministry of Agriculture reports improvements over the past few days have pushed average western Canadian hog prices back above break even, according to Bruce Cochrane.
calendar icon 23 April 2010
clock icon 3 minute read

Western Canadian prices for index 100 hogs over the last few days have ranged from the low 140s to the mid 150s per 100 kilograms, an improvement of close to 20 dollars per 100 kilograms from late March or about 15 per cent.

Brad Marceniuk, a livestock economist with the Saskatchewan Ministry of Agriculture, says prices have improved enough over the last few days that on average producers in western Canada are back to profitable levels in contrast to the US which was back to profitability sometime in March.

Brad Marceniuk-Saskatchewan Ministry of Agriculture

Overall meat and poultry supplies in the U.S. have been tightening over the last few months and this has led to some really good price increases for pork, beef, lamb and poultry over the last month or two.

While production numbers are expected to further decline into the summer, increased demand seems to be a bigger catalyst in increasing hog prices at this time.

Meat in cold storage has declined over the last few months with pork and beef and poultry and this has been a result of further increases in demand.

Also we've seen some improvements in US pork exports and there's been some recent announcements on trade agreements which will help prices as we move forward.

Looking into the summer, with continued reductions in US weekly hog slaughter numbers and pork production and these improvements in demand, prices should further increase.

The lean hog futures market has had a good rally over the last few weeks and indicates very strong prices for the summer.

Based on current lean hog future prices and a par Canadian dollar index 100 hog prices in western Canada may average in the mid 150s per 100 kilograms for the remainder of the second quarter and may average in the upper 140s per 100 kilograms for the third quarter.

Marceniuk says US weekly hog slaughter numbers and pork production continue to be a big factor but, with more pork markets opening up over the past few months, producers should also keep an eye on what's happening with export demand.

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