The general manager of h@ms Marketing Services says a combination of high feed costs and the strong Canadian dollar continue to pressure profitability within the Canadian pork industry.
Over the past six weeks live hog prices have climbed by 15 to 20 dollars per hundred kilograms.
H@ms Marketing Services general manager Perry Mohr notes prices in the U.S. are now at record levels but, because of the impact of the Canadian dollar, prices are at less than record levels in Canada but they are still pretty good.
The challenge that producers are facing is that almost on a daily basis their profitability gets eroded by rising feed grain prices and that’s something that has to be a big concern for producers on both sides of the border as we’ve had an unseasonably cool spring.
It’s also a wet spring, it’s delaying seeding.
I think I read some place the other day that the corn crop was at two or three percent planted compared to considerably higher than that under normal circumstances.
As a result of that I think we could see even more bullish pressure on corn prices because each day that we go by that that corn doesn’t get in the ground ultimately it could end up with some of these acres being changed to other crops or at a bare minimum we’re going to see yield reductions in the corn crop in the states the later we get it planted.
We all know that there’s good demand for the corn crop that’s out there both from the ethanol industry and the livestock industry and of course the food industry in general.
Mohr estimates when you tack on premiums producers are probably getting between 170 and 175 dollars per hog.
He estimates, at that level, producers are probably making between 10 to 20 dollars per hog, which is pretty good given the fact the Canadian dollar is currently worth 1.05 U.S.
Source: Farmscape.Ca
