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Lower Live Hog Prices Slow North American Herd Expansion

8 April 2015, at 12:33pm

CANADA - A swine specialist has said that the recent slide in live hog prices appears to have tempered any plans to expand North American hog production, writes Bruce Cochrane.

The USDA's Quarterly Hogs and Pigs report shows we're going to see considerably more pork production this year than in 2014, when US swine herds were devastated by Porcine Epidemic Diarrhoea, but the numbers are still lower than industry expectations.

Ron Gietz, a business development specialist in pork with Alberta Agriculture and Rural Development, said that markets have come down dramatically from the extreme highs we saw in 2014, prompting producers to rethink any plans for expansion.

Ron Gietz-Alberta Agriculture and Rural Development:

In the US they were fairly aggressive on expansion.

They took the breeding herd up by about 43,000 sows over the last quarter so there's some expansion dialled in in the US, but this seems to have curbed that in combination with the lower markets.

Most of the industry would be in a loss position at this time with the downward trend in markets so far in 2015, so that's kind of taking out the enthusiasm for expansion at this time, so it's not necessarily going to go away all together, but we saw the breeding herd up 2 per cent as of 1 March, 2.2 per cent and the traders had expected a 3.5 per cent increase, so that shows you how the expansion is starting to be reined in.

In terms of Canada we're basically flat, maybe at the most a 1 per cent expansion would be going on on this side of the border, certainly quite a bit more conservative.

Mr Gietz said that the Hogs and Pigs Report suggests that we may have reached the low point in the price cycle and we can look forward to at least slightly better times moving into the summer months.

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