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More Concentration in Hog Sector

18 September 2012, at 2:47pm

CANADA - The prospect of high feed costs and a reduced demand for feeder hogs in the United States have the potential to jeopardise the recovery in the hog sector, which began during the first part of 2012 with increased pig production and exports.

Facing higher costs and struggling financially, some smaller producers started to liquidate their inventories in the second half of the year, a trend expected to continue into 2013. Post forecasts a 2.5 per cent decline in the sow herd and a three per cent decline in pig production.

After a modest increase up until mid-2012, exports of live hogs are declining, and will continue to do so in 2013.

Hog slaughter remains relatively flat, forecasted only slightly down for 2013, after another small decline in 2012. Based on relatively similar weights, pork production will show a modest drop in 2013 as well.

Both exports and imports of pork are estimated to come down in 2013, after higher than expected volumes in 2012.

Shipments of pork to Russia are the driving force behind an estimated 4.5 per cent increase in exports in 2012. Limited supplies on the domestic market triggered a surge in pork imports, estimated now to exceed by 18 per cent the previous year’s level.

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