Our most recent snap shot tells us on a US dollar and liveweight by the pound that all countries currently have higher prices that both Canada and USA.

It doesn’t take a rocket scientist to see that 60¢/lb. in the USA is significantly lower that anywhere but Canada. The higher prices, in each of the other countries is an obvious reflection of supply and demand. Also their consumers are paying significantly more for pork than US-Canada consumers. Consumer will and are paying for Pork at high prices!

China for example: Market hogs are bringing at least $100 more per head than USA. It’s obvious that pork brought and sent from USA would be competitively priced. Any enterprising capitalist will be figuring on capturing the spread. Ditto Russia & Mexico, both are major pork importing countries.

Brazil is a major exporter of Pork. Their price at 72¢ versus 60¢ (USA) is higher. Brazil does not have cheaper pork to export. We expect as we get through January the USA hog price will rapidly rise to Brazil’s price.

Bottom-line: We expect as we look at the hog prices in Major importing countries that USA-Canada exports will stay strong in 2014. This will support the price of hogs in USA-Canada.

PED

Last Saturday the Wall Street Journal did a feature on PED. Of course few of us read the Wall Street Journal, as it is for the gentrified of the East Coast (We got an article sent to us). What the article talked about is PED will mean fewer pigs and pork, which will probably lead to record retail pork prices this coming summer. Couple that with record beef prices, the American consumer will almost pay as much for Pork as the people of Russia, China, Mexico, Japan, etc. do now. Of course the GDP per capita in the United States which should mean more consumers buying power is significantly higher that where people are buying pork in markets at $1.00 US b. liveweight now.

PED continues to move with over 2,000 officially reported cases. We expect that many are not reported, there is no mandatory reporting and when all your baby pigs are dying, you don’t need to have a lab tell you why. WE expect that when the dust settles on PED the US will have lost at least 5 million pigs from PED (mid 2013-2014). Currently Canada has seen no PED cases. We believe the 5 million fewer hogs will have added $10-20 of value on a market hog. (This includes the extra carcass weight of current hogs)

Minnesota and Iowa Pork Congress

We will be at the Genesus Exhibits at Minnesota this week and Iowa next. We look forward to you visiting and giving your opinion on our industry. Genesus is also having a reception on the Wednesday of the Iowa Pork Congress, please come, visit and have a drink on us.

Canadian Dollar

The Canadian Dollar a year ago was worth more that the US dollar ($1.01). Last Friday it closed at 91.75¢ to the US Dollar. Canada’s hog industry was not competitive with the US at a par dollar. The drop in US Dollar is a very positive win for Canadian hog producers. With Canada’s hog price tied to the US hog price, Canada exports 50 per cent of its pork production (priced US dollars), labour cost, electricity, taxes etc. stay in Canadian but the hog price moves higher. For example a load of feeder pigs sold for $92.00 US per pig, when converted into Canadian dollars is $100 per pig, $8.00 more. Many expect the Canadian dollar will continue to decline relative to the US dollar. We believe 85¢ is where it will go. A much needed win for Canadian hog producers.