January 12, 2009

The Saskatchewan Ministry of Agriculture in Canada predicts a return to profitability in the western Canadian swine sector by the middle of this year.

Following reported declines since mid-December as pork in cold storage increases; North American hog prices have started to increase, and seen to continue increasing in the first half of 2009.

According to the December Quarterly Hogs and Pigs Report by USDA, the breeding inventory and market inventory numbers were down from a year ago.

With smaller breeding herd, sow farrowing numbers were down about six percent during the September to November quarter and projected to be down 3.3 percent in the next quarter which is the December to February 2009 quarter.

Based on the recent USDA pig crops and lower live hog imports from Canada, US hog slaughter numbers are expected to decrease by about three percent in the first quarter of 2009 and six percent in the second quarter of 2009.

While these reductions should be positive on North American hog prices, projected reduced US pork exports during the first half of 2009 may limit some of these US price increases.

Canadian producers will see a bigger benefit due to the weaker Canadian dollar in 2009 compared to 2008.