Farmscape for March 15, 2013
A livestock economist with the Saskatchewan Ministry of Agriculture says reduced demand for pork on the export market, fueled by controversy over the use of ractopamine, are adding downward pressure to live hog prices.
A combination of record high feed costs fuelled by the drought that hit the U.S. last summer and declining live hog prices have resulted in significant financial losses for hog producers.
Brad Marceniuk, a Livestock economist with the Saskatchewan Ministry of Agriculture says, feed prices have increased since the summer of 2012 and prices won't decline much if any until the new crop is harvested.
Clip-Brad Marceniuk-Saskatchewan Ministry of Agriculture:
North American hog prices have been declining the last few weeks.
Hog prices for slaughter weight hogs are down about 20 dollars per hog since early February with current western Canadian hog prices around 140 dollars per hundredweight.
The lower prices combined with high feed costs have resulted in significant financial losses for hog producers in the short term.
Several factors have contributed to these lower hog prices.
The big story really internationally has been the export issues regarding the use of the feed additive ractopamine.
Russia has stopped importing U.S. pork while China is requiring third party verification that U.S. pork is ractopamine free.
Canadian pork exported to Russia also needs ractopamine free verification.
The new trading requirements really are definitely hurting North American pork exports.
Weekly hog slaughter numbers in the U.S. have not declined so far in 2013 while pork production is only down about less than one percent compared to the same period in 2012 and combined with all of that we've seen rising pork in cold storage both in Canada and in the United States.
Marceniuk notes the volume of red meat and poultry in cold storage has increased in the last few months particularly pork and the USDA revised its red meat and poultry production estimates upward for 2013 with broiler and turkey production estimates noticeably higher.
He says this will likely be negative on meat prices in the short term unless we can get our export markets stronger again.
For Farmscape.Ca, I'm Bruce Cochrane.
*Farmscape is a presentation of Sask Pork and Manitoba Pork Council