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US Swine Economics Report - 11th November 2003.

by 5m Editor
11 November 2003, at 12:00am

Regular report by Ron Plain on the US Swine industry, this week discussing how if the current pace of importing Canadian pigs continues, pig imports for 2003 will be nearly 16 times as many as we imported in 1993.

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The number of weaner/feeder pigs being imported from Canada has increased each year for the past decade. In 1993, the U.S. imported 277,299 pigs from Canada that weighed less than 100 pounds when they crossed the border. Last year, the U.S. imported 3.758 million weaner/feeder pigs from Canada. During the first 43 weeks of 2003 we imported 17% more Canadian pigs weighing less than 110 pounds than we imported during the same weeks of 2002. If this pace continues, pig imports for 2003 will total 4.4 million head, nearly 16 times as many as we imported in 1993.

There are a number of reasons for this increase. Obviously, U.S. hog finishers are aggressively seeking Canadian pigs. There are a number of corn farmers in the upper Midwest who like to finish hogs, but don't like to deal with a sow herd. Historically, these producers have purchased feeder pigs from the south. Missouri, Arkansas, Tennessee and Kentucky were major feeder pig exporters 15 years ago. Today, Corn Belt hog finishers are increasingly looking to Canada as a source of feeder pigs.

Canadian farrowing operations are more productive than their American counterparts. In 2002, the U.S. averaged 16.4 pigs per animal in the swine breeding herd and Canada averaged 19.3 pigs per animal in the breeding herd. (Part of this difference may be due to differences in how USDA and Statistics Canada define and collect data.) Not only are Canadian producers ahead of us, but Canada's lead is increasing. Canadian productivity has increased 22.3% since 1996 while pigs per breeding animal went up 16.1% in the U.S. This difference in productivity is one of the reasons that Canadian feeder pig production has increased while U.S. production has declined.

A third factor is the exchange rate between U.S. dollars and Canadian dollars. In 1993 one U.S. dollar would buy, on average, 1.29 Canadian dollars. Last year, it bought an average of 1.57 Canadian dollars. This shift in the exchange rate meant that what U.S. hog finishers paid for Canadian feeder pigs generally translated into more Canadian dollars over time. The Canadian dollar has gone up sharply in value this year. In October, the average exchange rate was 1.32 Canadian dollars per U.S. dollar. If the stronger Canadian dollar lasts, it should eventually slow the southward movement of pigs.

5m Editor