Canadian farmers have shed sows swiftly this year because of the pig price catastrophe.
But Americans, already slow to cull, appear to be hunkering down for a war of attrition.
“The liquidation is progressing slowly in the U.S.,” said Iowa State University hog analyst John Lawrence. “Weaker corn prices in August and stronger weaned pig prices in October is providing temporary relief to some producers, who are postponing sow culling decisions.”
Sow slaughter in September was lower than a year ago, Lawrence said, but was above the five year average.
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The U.S. Department of Agriculture reported Oct. 22 that sow slaughter for the week ending Oct. 10 was 4.1 percent lower than in 2008, continuing the trend.
This is bad for Canadian hog producers, who have only a small part of the North American herd but a large share of the hurt.
The strong Canadian dollar has made U.S. prices, which look poor but not terrible to American farmers, a nightmare for Canadians.
Analysts said North America needs a 10 percent reduction in sows to make up for lower demand and higher average feed grain prices. The Canadian herd has shrunk by 15 percent and seems set for more big cuts, but that won’t make up for only moderate declines in U.S. sow numbers.
The first bids for the Canadian sow buy-out federal aid program were to be considered Oct. 28, which may reveal how much the Canadian herd is likely to shrink.
“We’ll start to get a feel on how the numbers are going to go,” said Manitoba Pork Council general manager Andrew Dickson.
“Some cuts are planned but haven’t been undertaken yet.”
Lawrence warned U.S. hog producers months ago against complacency. Producers should not assume their neighbour will make cuts alone.
“The perennial game of chicken continues,” Lawrence wrote in a summer commentary titled Are Pork Producers Playing Chicken?
“Each producer is waiting for the other guy to quit and so prices will be higher for the survivors. What happens when you become the ‘other guy’ rather than the ‘survivor?’”
Some major producers announced culls, but to be effective the whole industry must shrink.
Up to the summer, almost all the culling occurred in Canada, taking the pressure off U.S. farmers.
