June 14, 2006

Canadian pork prices to hold steady until fall

Canadian hog prices should remain firm through this summer but a decline is expected in the fall due to the US market, according to a Canadian livestock analyst.

Brad Marceniuk of Saskatchewan Agriculture and Food said the cyclical nature of the market suggests a downturn by August or September. However, prices should hold steady through July, he added.

Current hog prices in Canada are slightly better than break-even. Hog prices are usually strong in summer due to stronger demand, said Marceniuk.

Heat in the summer would also slow hog growth, thus many producers would rather keep them on the farms than sell them.

However, producers would release these pigs into the market in fall, causing prices to head down at that time, said Marceniuk.

Currently, the US has been slaughtering 1.9 million hogs a week and should move down to 1.8 million over the summer, according to Marceniuk. However, a move above 2.0 million head a week would put pressure on prices.

Since cold storage levels for US poultry and beef are both higher than they were at this time a year ago, there is increased competition for pork. Pork prices could pick up if US poultry and beef production were cut or more are exported.

Saskatchewan hog prices for Iowa Plant Index 100 hogs are roughly C$135 (US$121) to C$145 (US$130) per 100 kg, while Manitoba prices relative to the Index 100 are in the C$150(US$134.8) to C$160(US$143.8) per 100 kg range.