Farmscape for May 31, 2012
A livestock economist with the Saskatchewan Ministry of Agriculture expects demand for pork, particularly on the export market, to be the main factor influencing live hog prices in Canada this summer.
Lower hog prices brought on by increased North American pork production and slower export demand for pork and higher input costs have pushed western Canadian pork producers back into the red.
Brad Marceniuk, a livestock economist with the Saskatchewan Ministry of Agriculture, observes this year we haven't seen the typical spring rally in live hog prices.
Clip-Brad Marceniuk-Saskatchewan Ministry of Agriculture:
A combination of factors have kept downward pressure on hog prices this spring.
Increased U.S. hog slaughter numbers, heavier hog weights have really contributed to increased pork production in North America.
Pork in cold storage has also been on the rise over the last few months.
Consumption, particularly from pork exports, has played a larger role in North American hog prices here over the last few years.
Strong increases in pork demand from China and South Korea in 2011 really helped North American hog prices improve.
With increases in North American pork production expected for 2012, export demand will be very important for North American hog prices this summer.
Hog prices should improve into the summer with barbecue season and continued strong export demand.
We've also got strong demand for other meat commodities such as beef and that should really help our meat complex and help pork prices.
We may see hog prices be a little choppy through the summer reflecting changes in export demand.
Export demand particularly from China and South Korea will be key in moving hog prices this summer.
On the feed complex side of it, it depends on what happens with our crop this year.
Will we see feed prices go higher or lower to the fall and producers really need to keep an eye on that when estimating their production costs.
Marceniuk notes U.S. pork production over the last four weeks is over five percent higher than one year ago and, while U.S. pork exports continued to be strong in the first quarter of 2012 compared to the first quarter of 2011, they may have started to lose some steam.
For Farmscape.Ca, I'm Bruce Cochrane.
*Farmscape is a presentation of Sask Pork and Manitoba Pork Council