Posted on 01/08/2010, 7:36 am, by mySteinbach

The Saskatchewan Ministry of Agriculture predicts reduced production and steady demand will result in improved live hog prices moving into 2010.

Live hog prices have improved over the past one to two months reducing losses from earlier in the year but western Canadian hog producers continue to lose money.

In his January Hog Market Update Saskatchewan Ministry of Agriculture livestock economist Brad Marceniuk reports reduced production in the U.S. and greater reductions in Canada and suggests, if slaughter numbers continue to decline and pork demand holds, prices should trend upward in 2010.

Demand for pork domestically has continued to be relatively good.

I think demand on the export side, which is weaker than it has been in the long term, exports in 2009 from January to October on a quantity basis were down about 11 percent for the U.S. on their export side and down about four percent for Canada on our export side.

The export market, we’ve seen some weakness and that continues.

It maybe has improved a little bit in the last few months but it is weaker than it was in 2008.

Looking forward, as long a demand stays relatively where it is and slaughter numbers do come down a little bit more, we should see prices trend upward into 2010.

One of the positive notes, if you’re looking at volumes of pork and total meant in cold storage in the U.S., for the first time in almost two years we’ve seen pork in cold storage to be below 500 million pounds while total meat in cold storage is actually now below two billion pounds.

On that front the storage numbers have actually started to come down here in the last few months and are below numbers that we’ve seen in the last two years so that should be positive for meat prices going forward in 2010.

Based on the current futures prices, Marceniuk projects prices in western Canada for index 100 hogs to be in the upper 120s per 100 kilograms for the first quarter and the lower 140s for the second quarter, close to break even.

Source: Farmscape.Ca