Canada – Sitting on the edge of the Great Divide

Ontario/Canada pork production like the rest of North America looks into the promised land of the prospects of good hog prices coupled with lower feed prices (perhaps substantially lower feed prices) resulting in the type of margins required to begin to heal this industry. Bob Hunsberger, Wallenstein Feed & Supply does an excellent job below of showing what this future vision looks like today.

However as the promised land of old you have to get there and you have to get in! After the trauma and pounding pork producers have experienced the last number of years they perhaps can be forgiven for going to the typical farmer mode of it being “too hot, too cold, too wet, too dry or at a minimum too good to last. To be fair Ontario has perhaps experienced all of that this crop year along with some localized examples of the extreme weather being experienced throughout various parts of the continent.

However from my totally unscientific canvas of the province travelling a significant portion of it the crops look very good. The bulk of the corn is tasseled out right on schedule; the winter wheat harvest is either complete or well advanced. Again right on schedule or certainly not late. Early reports seem to be of average to slightly below average yields with sprouting in the soft white winter wheat and fusarium and toxin challenges in the soft red winter wheat. Disappointing perhaps if you’re dirt farming but as a pork producer may provide added pressure to the downward direction of feed prices as substantial portions of the wheat harvest moves into the feed wheat market.

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 a significant and encouraging plumping of margins. However as we look to these hopeful signs we would do well to look to the cautionary tale from the cash crop producers who are looking at a 35% plus “haircut” if supply outstrips demand. This industry should well understand the consequences of even slight oversupply. So as we begin to get bulled up for better days might do well to consider how we all get better before we get bigger!

Genesus Global Market Report Prices for the week of July 29, 2013
Country	Domestic price (own currency)	US dollars (Liveweight a lb)
USA (Iowa-Minnesota)	1.01 USD/lb carcass	74.45¢
Canada (Ontario)	1.88 CAD/kg carcass	65.47¢
Mexico (DF)	24.50 MXN/kg liveweight	87.66¢
Brazil (South Region)	2.79 BRL/kg liveweight	54.97¢
Russia	74 RUB/kg liveweight	$1.02
China	15.32 RMB/kg liveweight	$1.14
Spain	1.49 EUR/kg liveweight	89.66¢
Viet Nam	42,000 VND/kg liveweight	90.56¢
South Korea	4,358 KRW/kg liveweight	$1.77