Strong Hog Prices Offset Some Concerns Over High Feed Costs

Farmscape for October 11, 2011   (Episode 3681)

A partner with Gowan's Feed Consulting reports strong hog prices are helping offset some of the concerns of western Canadian pork producers over high feed costs creating some optimism moving into the fall and heading toward winter.

As the result of the difficult 2011 growing season, the cost of the various ingredients contained in rations for feeding swine have been extremely volatile heading into the fall.

Neil Campbell, a partner with Gowan's Feed Consulting notes, while feed ingredient costs typically come down following the fall harvest, prices have not come down as much as pork producers would have liked.

Clip-Neil Campbell-Gowan's Feed Consulting:
Recently we have seen the cost of corn starting to come down and that is pressuring barley and wheat out of the rations in Manitoba.

The wheat price and the barley price, interestingly in Alberta and Saskatchewan, haven't really been following corn down.

They've stayed pretty stable which is a bit of a surprise in light of the fact that we didn't see much for harvest pressure this year on the price and our price really hasn't moved too much over the last few months on wheat and barley like we would expect it to especially in light of the fact that the corn price has come down.

On the protein side we've seen soybean meal and canola meal come down in price quite a lot here in the last few weeks.

Canola meal is trading probably 60 to 70 dollars lower than it was two months ago and really starting to be a factor in the rations where it hasn't been for quite some time.

Campbell says, although feed costs have not come down as much as would typically be expected heading into in the fall, the pig price has been fairly strong so there is some optimism.

He encourages producers to consider locking in some percentage of their feed costs based on what they can sell the pigs for on the other side and look at hedging in some profits because these markets have been so volatile and there are profits on the table currently.

For Farmscape.Ca, I'm Bruce Cochrane.

       * Farmscape is a presentation of Sask Pork and Manitoba Pork Council