May 9, 2008

High demand and robust exports to sustain Canada hog prices
 

Hog prices in western Canada have increased dramatically in the past few weeks despite a high level of production and supply, thanks to healthy demand and exports.

Live hog demand in the US, which has increased about 8 percent, and strong exports have led to the rising hog prices, according to Brad Marceniuk, a livestock economist with the Saskatchewan Ministry of Agriculture.

Based on lean hog futures prices index 100 hogs for western Canada could average in the upper 130's for the second quarter and could average in the mid 130's for the third quarter.

Live hog demand and strong pork exports would be vital in sustaining the current prices in the face of high production levels.

The rate of North American sow liquidation and weekly US hog slaughter numbers will also be key in pushing up pork prices and for sustaining long-term price improvements.

However, a high level of pork production poses uncertainty whether the prices will remain strong into autumn.