February 18, 2008

Canadian hog production continues unabated despite troubles

Canadian breeding hog inventory has not fallen as sharply as expected, bringing fears the current overproduction situation in both Canada and the US will not abate anytime soon.

Canadian hog breeding inventory on Jan. 1, 2008, declined by less than 2 percent from a year ago, against expectations it would fall 5 to 10 percent.

According to Statistics Canada, Jan. 1 breeding inventory stood at 1.55 million head, down only 1.9 percent from a year ago, a figure analysts said would not be enough to alleviate the current overproduction situation in the US and Canada.

Even as low hog prices increased the losses of producers with each hog they sell, US producers have not been cutting back on production.

Canadians were expected to cut back first as they would felt more of the pain. The stronger Canadian dollar would have compounded their problems, compared to the weak dollar in the US. Both faced high feed costs.

A year after reaching a record, Canada's hog exports to the US hit a new high, with 9.9 million exported in 2007.

More than two-thirds of exported animals were destined for feeding in the United States.