Key to Maintaining Profitable Hog Prices Revealed

CANADA - The president of the Canadian Pork Council says keeping the supply and demand curve in balance will be key to maintaining profitable hog prices as Canadian pork producers move into 2011, Bruce Cochrane writes.
calendar icon 6 October 2010
clock icon 3 minute read

Following a prolonged downturn, live hog prices have shown dramatic improvement over the past four months.

Canadian Pork Council president Jurgen Preugschas says, despite the improvements in hog prices, the majority of Canadian producers are at best breaking even or making a just few dollars.

Jurgen Preugschas-Canadian Pork Council

You have to remember that four months of profits don't come anywhere close to recovering four years of severe losses.

If we see feed prices rise quite significantly that would be quite concerning.

If we have a weakening of hog prices that's difficult.

If the prices strengthen some more and that means we need to keep our exports going and that's not only Canadian exports.

I'm talking American exports as well that they remain healthy so that all the pork that is coming to market now still doesn't flood the market.

That's really the thing is to get that supply and demand curve in balance to keep the prices at a strong level.

Our producers are still in a very difficult financial situation all be it they're not going deeper into debt and that's very important to note but producers in Canada are still a long ways from being flush and back to where they were four years ago.

Mr Preugschas says given the improved prices the fear is that producers in the US where profits are much higher will go into a major expansion mode however he says so far there's no indication of an expansion.

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