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Reduced Feed Costs Offset Lower Hog Prices

by 5m Editor
19 August 2003, at 12:00am

CANADA - Farm-Scape: Episode 1324. Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council and Sask Pork.

Manitoba Pork Council


Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

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Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork.

Farm-Scape, Episode 1324

A Saskatoon based livestock economist is advising swine producers to keep a close watch on slaughter numbers in the US for the remainder of this year.

Over the past two months the promotion of beef, in reaction to the BSE situation, has lowered domestic demand for pork.

That lower demand has forced Canadian hog slaughtering facilities to reduce their kill resulting in increased exports which have pressured live hog prices in the US.

Saskatchewan Agriculture, Food and Rural Revitalization Livestock Economist Brad Marceniuk says hog prices have fallen by five to ten dollars per 100 kilograms over the past month in Saskatchewan but lower feed costs have offset that drop.

"Over the last two months we've seen the demand for feedgrains drop significantly.

This has in turn dropped the price of feed wheat and barley significantly here in Western Canada. This has reduced the cost of production from 150 to 155 to about 140 to 145 dollars per hundred kilograms.

With the current prices, even though they've dropped five to ten dollars per hundred kilograms in the last month, producers are actually probably making a profit of about five to ten dollars per pig today compared to a loss to a break even position two months ago.

Over the next little while, with fall coming on, we typically see increased slaughter numbers in the United States and this typically has the effect of reducing prices across the board. We expect to see prices slowly fall over the next few weeks.

Probably for the remainder of this third quarter we're looking at 130 to 145 dollars per hundred kilograms here in Saskatchewan and going into the fourth quarter probably dropping to the 115 to 130 dollars per hundred kilograms".

Marceniuk says demand for pork in Canada must increase so we can get our slaughter numbers back up to lower the number of hogs going south.

He advises producers to keep an eye on the US slaughter because it will be those numbers that will determine hog prices this fall.

For Farmscape.Ca, I'm Bruce Cochrane.

5m Editor