Canada/Ontario: Here and Back Again

by 5m Editor
10 May 2012, at 6:50am

CANADA - Statscan recently released its 1 April Hog & Pig Report, writes Bob Fraser, Sales & Service, Ontario, Canada.

The graph below provided by John Bancroft, OMAFRA with its almost perfect mirror image shows the tale of the last 14 years, with the Canadian industry growing over the course of seven years to 1.6 million sows to only return to where it started seven years later at 1.3 million sows.

Genesus Global Market Report
Prices for the week of April 29, 2012
Country Domestic price
(own currency)
US dollars
(Liveweight a lb)
USA (Iowa-Minnesota) 77.28¢ USD/lb carcass 57.18¢
Canada (Ontario) 1.46¢ CAD/kg carcass 53.44¢
Mexico (DF) 18.08 MXN/kg liveweight 62.34¢
Brazil (South Region) 2.02 BRL/kg liveweight 47.64¢
Russia 95 RUB/kg liveweight $1.46
China 13.72 RMB/kg liveweight 98.45¢
Spain 1.29 EUR/kg liveweight 76.58¢

The chart below shows how the present Canadian pork industry breaks out provincially, with three quarters concentrated in Mantioba, Ontario & Quebec in very close to equal proportion.

If we take a look at the OMAFRA Weekly Hog Market Facts compiled by John Bancroft, Market Strategies Program Lead, Stratford OMAFRA [email protected] we see margins have shrunk considerably and continue to decline taking the “bloom off the rose“ on what was shaping up as a good year.

Week Ending on Friday 30-Mar-12 06-Apr-12 13-Apr-12 20-Apr-12 27-Apr-12
The Ontario Market
Average price ($/ckg, DW total value) $174.95 $170.77 $171.31 $171.20 0
Low price ($/ckg, DW total value) $156.94 $154.21 $155.60 $155.16 0
High price ($/ckg, DW total value) $195.16 $191.52 $191.05 $192.21 0
Weekly Average Dressed Weight (kg) 96.32 96.10 96.77 97.07 0
Market Hogs Sold 88,797 75,266 88,862 88,416 0
Market Hogs Sold - % of Previous Year 100% 90% 105% 122% 0
100% Formula Price ($/ckg, 100 index) $151.71 $148.51 $149.15 $148.53 $147.56
Previous Year - 100% Formula Price ($/ckg, 100 index) $153.82 $157.95 $161.71 $163.78 $162.54
Weaned Pig Value (C$/pig) - Formula Value $39.44 $38.61 $38.78 $38.62 $38.37
Feeder Pig Value (C$/pig) - Formula Value $62.58 $61.26 $61.52 $61.27 $60.87
Est. Grow Finish Feed Cost for Current Week $84.52 $87.12 $85.59 $83.88 $85.20
Est. Margin after Feeder Pig and Feed $10.07 $8.05 $10.31 $10.09 $7.17

Further to the bloom coming off the rose once again John Bancroft does an excellent job of showing with a picture how quickly things have gone from “good to bad to ugly“. But perhaps the bigger take away message is the importance of risk management in every pork producer’s tool kit. Some opportunities were presented.

Further Observations in Ontario

Record Ontario Corn Acres Expected

In Ontario, farmers expect to seed a record 2.24 million acres of corn for grain, up by 335,000 acres or 17.6 per cent from 2011. This would break the previous record of 2.17 million acres set in 1981. Ontario farmers anticipate seeding 2.5 million acres of soybeans in 2012. If these intentions are realized, this level would surpass the record seeded area set in 2010 and unchanged in 2011. Farmers may modify their plans prior to planting time as a result of economic and environmental conditions. Some farmers indicated that they were still undecided about their final strategies for 2012.

From my totally unscientific survey of traveling the countryside, I would suggest 70 per cent + of the corn is in the ground. At least in the major corn growing areas of Ontario, with some soybeans in. With the continuing remarkable spring weather the progress has gone on virtually unabated.

In my last report I discussed some of the impact of land prices in shifting the dynamic for some pork producers. Here FCC offers some perspective.

FCC Reports Rise in Canadian Farmland Values

According to a new Farm Credit Canada (FCC) Farmland Values Report, the average value of - ONTARIO FARMLAND VALUES JUMP 7.2 PER CENT

Farmland values in Ontario increased 7.2 per cent in the second half of 2011, following gains of 6.6 per cent and 2.4 per cent in the previous two reporting periods, says FCC. The average monthly increase was 1.2 per cent in 2011, which is double the average monthly increase the province witnessed in 2010. Farmland values in Ontario have been rising since 1993 and reached a peak increase of 8.2 per cent in the last half of 1996. Southwestern and eastern Ontario posted the most notable gains in land values, while regions in the rest of the province saw more modest changes. In several areas, demand for farmland significantly outweighed the supply as intensive livestock, crop and vegetable producers all wanted land. Restrictions limited the ability for dairy producers to expand their quota holdings, fuelling a demand for land instead. Similarly, large intensive livestock enterprises were seeking land to satisfy nutrient management program requirements and to expand their operations.