April 28, 2008

  

Canadian cull sow programme to have little impact on US hog slaughter

 

 

Current cutbacks in hog production in Canada would have little impact on total US hog slaughter supplies until the first quarter of 2009, according to market analysts.

 

Canadian hogs make up nearly 10 percent of US slaughter in 2007. Hog shipments from Canada to the US rose 25 percent in the first quarter of 2008 as high feed prices and the strong Canadian dollar forced hog farmers to send more feeder pigs to the US.

 

The Canadian government recently implemented a CAN$50 million buyout programme of cull sows and boars to reduce the nation's swine herd by about 10 percent.

 

The Canadian swine breeding herd, as of April 1, was down 4.6 percent from a year ago and the smallest since 2001 analysts said.

 

However, increased productivity of the sows has resulted in 4.4 percent more pigs per litter than in 2001.

 

Even with the smaller breeding herd, sows farrowing in January through March were down just 1.8 percent from a year ago, according to Statistics Canada. Farrowing intentions for the second quarter were down 1.6 percent.

 

Describing the descent as "a slow creep down", Brown said the January-March pig crop in Canada was down just 1.0 percent from a year ago.

 

Ron Plain, agricultural economist at the University of Missouri, said the smaller farrowings estimates in Canada for the first half of this year is favourable for the market but "it is far from what is needed to return the industry to profitability."

 

According to the USDA, the December-February US pig crop was up 6 percent from a year ago. March-May farrowing intentions were estimated at 100 percent.

 

North America needs to reduce pork production by about 10 percent, Plain said. But data from both the Canadian and US side shows no sign of that happening until the first quarter of next year.

 

Regarding the Canadian sow buyout programme, Plain said although the government payout is generous by market standards, producers must stay out of business for three years.

 

Many producers may not be willing to participate in the program because of capital investments they have made, he said.

 

Analysts and livestock dealers said it may take a few weeks to assess the number of Canadian producers who have signed on to the buyout programme and the number of sows involved.

 

However, culling sows now would not affect the supply available for slaughter until about a year from now.