August 11, 2006

Canadian pork producers urged to secure feed supplies

The Saskatchewan Pork Development Board is calling on hog producers in Western Canada to secure feed supplies for this winter in anticipation of rising prices.

The latest cereal grain production estimates from the Canadian Wheat Board indicate barley production would be down by about two million tonnes from last year, making this year's crop one of the smallest in the past five years at a time when there are lesser cereals downgraded to feed.

As feed costs make up around 50 to 60 percent of the total cost of hog production,  feed price increases have significant impacts on the profits of pork producers.

Most producers who purchase feedgrains have supply agreements with local farmers and producers can benefit by extending these forward at current prices, analysts said. 

As both barley and feed wheat futures have been steadily increasing over the summer, producers have been encouraged to lock in prices through contracts at the Winnipeg Commodity Exchange, which can be bought up to a year in advance.