The Saskatchewan Ministry of Agriculture predicts a return to profitability in the western Canadian swine sector by the middle of this year.
Over the last few days, following declines since mid-December, North American hog prices have started to increase.
Livestock economist Brad Marceniuk reports high weekly U.S. hog slaughter numbers in December and increased pork in cold storage had pushed pork cutout values and hog prices lower but prices are expected to continue increasing into the first and second quarters of 2009.
Combined North American hog production in Canada and in the U.S. have started to decline.
While Canadian pig crops have been declining over the last year, U.S. pigs crops have actually started to decline here in the last quarter.
Last week USDA released their December Quarterly Hogs and Pigs Report.
The December breeding inventory and market inventory numbers were down from a year ago.
So, with the smaller breeding herd, sow farrowing numbers were down about six percent during the September to November quarter and are projected to be down 3.3 percent in the next quarter which is the December to February 2009 quarter.
Based on the recent USDA pig crops and lower live hog imports from Canada, U.S. hog slaughter numbers are expected to decrease by about three percent in the first quarter of 2009 and six percent in the second quarter of 2009.
While these reductions should be positive on North American hog prices, projected reduced U.S. pork exports during the first half of 2009 may limit some of these U.S. price increases.
In regards to Canadian producers, they’ll see a bigger benefit just because of the weaker Canadian dollar in 2009 versus the dollar that we’ve seen in 2008.
Marceniuk notes, while the global financial situation has resulted in lower feed and energy costs, hog prices have not declined as much as other commodities.
He suggests factors to watch will include U.S. weekly hog slaughter numbers, U.S. pork in cold storage and global demand for pork.
He says demand for pork may be a key factor, if the global economy does slow down and U.S. pork exports are reduced.
Source: Farmscape.Ca
