The USDA's Quarterly Hogs and Pigs Report, released 31 March, showed a four to five per cent increase in slaughter hog numbers and about a one and a half per cent increase in the breeding herd.

Tyler Fulton, the Director of Risk Management with h@ms Marketing Services, says now is typically a tighter time for hog supplies so we'll be well short of packer capacity at this stage.

Tyler Fulton-h@ms Marketing Services

It's in that fall time frame when we usually see the capacity of hog plants met.

The thing about 2017 is that there's expectations that there'll be two new plants coming on stream in the US.

The expectation is one to come in July and the other one maybe later in the fall.

That will aid in that relationship.

It will cause packers to likely have to compete more heavily for the hog supplies and hopefully we'll be able to move through the fall time frame without too much concern that hog supplies will exceed capacity.

But it is critical to see those plants come on stream because we had several weeks last year in the fourth quarter where we hit that slaughter capacity mark and, without new capacity coming on stream, these expectations of anything from a three to four percent increase in hog numbers into the fourth quarter would make it very difficult to get those hogs killed and consequently have very negative impacts on price.

Mr Fulton says the expansion of the breeding herd will have longer term implications, in late 2017 and through 2018.

He says we're in a growth phase of the hog cycle so the hope is, with these new plants, that Canada will be able to handle the increased hog numbers.