February 18, 2008

Canada's hog inventory plummets by 6 percent

Canada's total hog inventory has decreased significantly by 6 percent on-year, from 14.9 million to 14 million heads, with appreciation of the Canadian dollar and high feed costs believed to be the reasons behind the decline of hog numbers.

Canada's hog inventory of all hogs on January 1, 2008 was 14 million heads, down 6 percent on-year.

Breeding inventory was at 1.55 million heads, down 2 percent on-year and down slightly from last quarter.

Market hog inventory was at 12.5 million heads, down 7 percent on-year and down 3 percent from last quarter.

Pig crop was at 8.2 million heads, down slightly from 2007. Sows farrowed during this period totalled 837,000 heads, down 1 percent on-year.

Statistics Canada has linked the decline to the strong Canadian dollar and high feed costs. Prices for slaughter and export hogs have weakened during the second half of the year due to a strengthening Canadian dollar, while feed prices have been driven up by over 50 percent in 2007.

Examining the results of a calculation that divides the hog prices by a feed cost, Statistics Canada said, can highlight the financial pressure on hog producers. The higher the ration, the better the situation is for hog producers.

By November 2007, Ontario and Alberta hog rations have gone down much lower than the 10-year average of 20.8. 

Farmers have exported a record of 9.9 million hogs to the US in 2007, with over two-thirds being younger hogs. Export market for younger hogs has remained attractive to Canadian producers, as feeding costs increase.

Domestic slaughter has also dropped by 2.4 percent between 2006 and 2007, Statistics Canada said, which was consistent with low domestic pork demand, low prices paid to producers and higher feed costs.