May 4, 2006

Smaller Canada herd boosts US hog prices

A decline in Canadian hog numbers is expected to lift US prices, livestock analysts said on Wednesday (May 3).

Typically, the US absorbs a quarter of the herd in Canada in the form of feeder pigs or slaughter hogs.

A decline in the Canadian herd means that prices would benefit, said Ron Plain, livestock economist at the University of Missouri.

At the same time, expansion of the US herd is slowed by high construction costs for new facilities and legislative factors such as waste disposal and measures protecting ground water from contamination.

Canadian market hog inventory was down 2.4 percent at the start of April, Statistics Canada's survey showed.

The smaller swine-herd is an indication of increased pig exports to the US, lower prices in Canada, problems with porcine circovirus and concerns about future profitability, Plain said.

Over the past 10 years, the Canadian pig crop have grown almost 85 percent to reach 15.22 million head in 2004. Over the same period the U.S. pig crop increased just about 1 percent. However, the 2005 Canadian pig crop saw a drop of 527,300 head over the 2004 pig crop.