June 9, 2004

Pork Profits Up, But Canada's Pork Council Say Situation May Not Last

After several years of poor prices and failed crops, Canada¡¯s Saskatchewan hog producers are finally getting a break as pork prices return to a profitable level and the drought ends in most areas. The return to profitability has created a degree of optimism not seen in the hog industry for several years.

John Germs, who operates a small family hog farm just outside of Saskatoon and had a tough time coping with the economic downturn, was on the verge of giving up.

"If the prices didn't come to where we could make some money this summer, and especially if we hadn't had any rain or decent spring moisture, we decided that by June 30 of this year we would slowly liquidate the herd," he said.

But then prices started climbing, from $115 a hog to $190 two weeks ago.

Prices have since fallen back, but Germs said he can still make money.

He hopes that hog prices remain high for the next year so he can recover his losses, but Canadian Pork Council executive director Martin Rice is not too optimistic that will happen.

"[There is a] strong likelihood that prices will not remain at the current level for much more than a few months," he said.

Germs, however, is gambling that growing demand for pork from North American consumers as well as the Japanese will keep prices up for the rest of the year.