May 19, 2006

 

Canada to export more hogs and less cattle to the US next year

 

 

Next year's trends would be similar to this year's developments: increased meat supplies and lower retail prices, according to an analysis from industry sources

 

However, larger imports of Canadian finishing hogs into the US is expected next year and would further boost US hog production according to Cattle Network. US import of finishing hogs from Canada has already increased by two-thirds this year compared to 2005.

 

The increase would be augmented by higher litter rates from a stable US breeding herd and higher average dressed weights.

 

US pork production is expected to hit 21.7 billion pounds next year, about 2 percent more than the 2006 forecast production.

 

The import of animals weighing less than 50 kg is expected to increase beyond 70 percent next year as the Canadian dollar strengthens, forcing producers to send their finishing hogs to the US as Canadian exporters curtail prices. 

 

The processor bids in the US are usually higher than in Canada.

 

Despite moderately higher prices for hog feeds anticipated next year, the trend of feeding hogs to larger live weights is expected to continue.

 

Exports of 3.0 billion pounds of pork are expected next year, an increase of 5 percent over the 2006 forecast.

 

Exports would likely account for 14 percent of production next year,

 

Factors favouring exports include favorable exchange rates, lower prices brought about by larger supplies, and continued strength in the economies in the consumer markets of Japan and Mexico.

 

Canada is expected to account for more than 80 percent of US imports while Denmark is expected to contribute up to 12 percent. 

 

Prices of live hogs are expected be down 7 percent from expected 2006 average prices.

 

For cattle, imports to the United States during 2006 is expected to increase to 2.2 million head, up 21 percent from the 1.815 million cattle imported during 2005.

 

Canada continues to clear cattle surplus accumulated from bans imposed in 2003 due to mad cow disease.  

 

Its January 2006 cattle inventory of 14.8 million head was still above pre-ban levels of 13.5 million. However, it is expected to finish clearing its accumulated inventory next year.

 

2006 is the first full year of imports from Canada since imports were banned due to mad cow disease in 2003. Imports were resumed in July last year.

 

About 62 percent of the cattle imported from Canada during the first quarter of 2006 were fed cattle and 38 percent were feeders.

 

The difference between US and Canadian fed cattle prices has narrowed due to the weakening of the US dollar against the Canadian dollar.

 

Lower US prices and a smaller inventory in Canada are expected to reduce cattle imports for 2007 by 9 percent.