December 22, 2008

 

US imports of hogs and pigs from Canada in the latest three weeks have averaged about 98,000 head below a year ago, a drop of about 42 percent from the record numbers in 2007.

 

After starting the year strong with gains through most of April, imports began declining. The year-on-year reductions have been magnified since late summer, and during the latest 13-week period, live swine imports are down by nearly one-third.

 

Record high feed costs earlier in the year, a sow buyout program initiated by the Canadian government last spring to help its producers, and reaction to the US mandatory country of origin labelling law, known as COOL, have caused production in Canada to decline.

 

If the lower trend for imports continues into 2009, US packers could have around 3.0 million fewer hogs of Canadian origin for slaughter. In 2007, imports totalled slightly over 10.0 million head. The 2008 total is projected to be around 9.1 million.

 

Factors that could affect imports of live swine from Canada in 2009 include cheaper grain prices and feed costs compared with a year ago, swings in exchange rates, expected growth in Canadian slaughter capacity, and how both the US and Canadian pork industries cope with the COOL regulations, industry analysts said.

 

Feeder pigs make up the majority of the swine imports. Through the week-ended December 13, feeder pigs account for nearly 75% of the 2008 total. Since it takes about 5 months for the feeder pigs to reach slaughter weight, second quarter 2009 hog supplies are expected to reflect this autumn's smaller imports.

 

Since Canadian imports have made up 10 percent of US slaughter supplies in the past two years, each 10 percent drop in imports means about 1 percent less in total slaughter.

 

In other news this week, a winter storm swept across the Midwest with heavy snow in some areas and freezing rain in others, causing slowed transportation for livestock and meat trucks. Analysts and livestock dealers said a downward revision is likely for Friday's hog slaughter estimate on Monday. The US Department of Agriculture's estimate for Friday was 421,000 head, but the actual figure may be a few to several thousand below that figure, analysts said.

 

Last week's cattle slaughter was estimated at 592,000 head, compared with 607,000 a week ago and 659,000 a year ago. Year-to-date cattle slaughter is down 0.4 percent from a year ago.

 

The week's hog slaughter estimate was 2.379 million head, compared with 2.335 million a week ago and 2.470 million a year ago. Year-to-date slaughter is up 6.1 percent.

 

The USDA estimated total beef, pork and lamb production for the week at 952.8 million pounds. Previous week's output was 954.2 million pounds, and the year-ago figure was 1.018 billion pounds. Year-to-date combined meat output is up 2.5%.

 

Broiler/fryer slaughter this week was estimated at 154.189 million head, compared with 158.061 million a week ago and 174.400 million a year ago.