CME: Statistics Canada Will Not Release October Hogs Report

3 October 2012, at 2:16pm

US - There will apparently be no October Hog Statistics report from Statistics Canada. USDA released a statement on Monday that it would not be publishing its quarterly United States and Canada Hogs report on October 29 because its Canadian counterpart has decided to discontinue its October report, writes Steve Meyer and Len Steiner.

We can find no mention of the change on the Statistics Canada website and are surprised that such a change would be made without a bit more discussion and publicity. The next United States and Canada Hogs report will be released in February according to the USDA announcement, implying that Canada will still publish its January Hog Statistics report.

We find the timing of this change to be problematic to say the least. One could look at the fact that Canada’s herd has numbered between 1.2 and 1.22 million head for the past two years and conclude that it may not change much more after the roughly 400,000 head decline from 2005 through 2010. But Canadian producers, like their U.S. counterparts, are facing very, very difficult times. Kevin Grier, Senior Market Analysts at Ontario’s George Morris Centre, detailed some of the difficulties facing Canadian producers in his weekly Canadian Pork Market Review this week. And the reductions are not just among the large outfits like Big Sky Farms and Puratone. He cites industry contacts in stating that there are 10,000 or so sows vulnerable in Ontario and that the sow herd in Quebec is “going down“ in spite of the province’s long-standing subsidies for its hog producers. He goes on to detail calls for financial assistance by various Canadian pork producer groups. Most of those calls are for loans and Canadian producers and policy makers are keenly aware of the scrutiny any programs will be under by U.S. producers who are always suspicious of Canadian “assistance“ programs. Manitoba Pork Council Charirman Karl Kynoch is quoted saying “Getting government to the table and up to speed on the situation has been challenge.“ We think discontinuing supply and inventory reports at a critical time may be a symptom of that challenge. This week’s Crop Progress Report from USDA indicates that winter wheat planting is progressing at a very normal pace.

That is good news for the beef industry which sorely needs to see the wheat crop progress normally in order to provide pasture for calves and, as was the case last year, a good number of cows given the poor pasture conditions in much of the country. As of September 30, 40% of the nations winter wheat acres had been planted. That compares to 36% last year and an average of 43% over the past 5 years. Emergence stood at 12%, the same as last year and 4% slower than the 5-year average of 16%.

Dr. Derrell Peel of Oklahoma State detailed some important developments for wheat pastures in his OSU Cow-Calf Corner article last week. He points out that significant rainfall in much of Oklahoma last week (see the top map from NOAA) helped winter wheat conditions but that the northern tier of counties remains very dry. In addition, Dr. Peel quite correctly points out that the rainfall has not solved the longterm drought conditions (bottom map) and that additional moisture will be needed soon.

Typical wheat grazing programs begin in November or early December. Calves or yearlings can be grazed on wheat pasture full time and removed in late February or early March if the producer wants to harvest a wheat crop or in May (ie. the wheat is “grazed out“) if the value of extra cattle pounds exceeds the potential value of a wheat crop. A limited grazing system involving one day on wheat and 2-3 days on dry grass or hay is best for dry cows. Dr. Peel reports that the economics of wheat grazing programs appear good at present. March and May feeder cattle futures are currently sufficient to lock in values of gain that range from $110/cwt to $135/cwt. Those values will cover a grazing cost of about $150 to $170 as well as other typical costs and still return $70 to $90/head. Light-weight (400 to 500 lbs) steers on a graze-out program have the potential to return $70-$100/head after covering a wheat grazing cost of $258-$310 per head.