The latest figures from Statistics Canada reveal that, as of 1 July, the total Canadian pig inventory fell by 2.3 per cent while the breeding stock inventory fell by 4.8 per cent since this time last year but since 1 April the breeding herd has increased slightly.

Saskatchewan Pork Development Board industry and policy analyst Mark Ferguson says while the year over year numbers have declined, things appear to have stabilized since the last quarter.

Mark Ferguson-Saskatchewan Pork Development Board

I think what the numbers are showing is that it's clear there's going to be fewer animals available for slaughter.

This is leading to tighter supplies of hogs which in turn leads to tighter supplies of meat and hopefully in the end this is going to translate into higher prices for both meat and hogs and I think it is translating into higher prices for meat and hogs and a situation where both farmers and packers can be profitable.

As of 30 July the stocks of pork in cold storage are at their lowest level since 2004 and they're down five percent since last month so the amount of pork we have in cold storage continues to come down.

Also the cutout values which attempt to estimate the meat value of the carcass have also hit record highs over the past couple of weeks.

If you convert that to Canadian dollars and kilograms the value of a carcass is well over 200 dollars per 100 kilograms so the shorter supplies of hogs and meat are definitely having an impact on the market and it's translated into good hog pricing.

Mr Ferguson says, with the index 100 hog price running at about 150 dollars per 100 kilograms most producers would be above their cost of production.