July 10, 2008

Continued high levels of US hog slaughter and abundant pork supplies in cold storage are pressuring live hog price from increasing, according to the Saskatchewan Ministry of Agriculture.

North American live hog prices have dropped by about US$10 per 100 kg over the past month.

The high slaughter rate and supplies have prevented hog prices from gaining the increases typical of summer, according to livestock economist Brad Marceniuk.

Marceniuk said based on the June quarterly hogs and pigs report, US hog market inventories grew 6.5 percent from June 2007 while breeding herd numbers declined only 1 percent from last summer.

The report has led to estimations that fourth quarter US hog slaughter numbers could exceed 31 million head, which could challenge slaughter capacity and impact fourth quarter prices negatively, Marceniuk said.

As with Canadian pig producers, US hog producers are incurring heavy losses due to high feed costs which have shot up about 40 percent from the same period of 2007.

Corn prices in the US are rising continuously and as a result, have also increased feed costs.

Marceniuk said while pork stocks declined in May from April, but they are still about 15 percent higher than a year ago. Overall meat stocks also dropped in May but are still about 18 percent higher than a year ago, Marceniuk added.