Canadians are hog happy
The April 1 Statistics Canada pig inventory report shows although hog prices have been falling for months, Canadian producers appear optimistic. If statistics indicate hope, the report shows producers here are more upbeat than their American counterparts.
First the broad numbers.
The report says Canada’s hog herd has reached a record size just shy of 12 million head, up 2.3 percent over the same time last year. Twenty years ago the herd stood at seven million.
In the last year, Western Canada’s herd size has grown by 3.5 percent to 4.8 million. That’s 40 percent of the national herd compared to 32 percent 20 years ago. Producers are gearing up for more growth.
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The national breeding herd has increased by almost six percent over last year. Although a small producing province, Saskatchewan showed strong optimism with a 12 percent increase in the breeding herd.
That compared to a breeding herd increase of only two percent in the United States Department of Agriculture March 1 hog report.
The western Canadian numbers show that an upheaval in the industry might be settling down.
Throughout 1997 and early 1998, there were fewer hogs in the West than there were in 1996. The explanation was that small producers were leaving the industry faster than big operations were building.
But the April 1, 1998 numbers show more hogs than in April 1996.
As for the market outlook, Agriculture Canada noted in a March report an expected boom in exports in 1997 were hurt by the Asian economic crash that made North American pork imports more expensive. But since then, Canadian and American hog prices have fallen a lot and that is expected to boost domestic consumption and export sales.
Canadian fresh and frozen exports in the first two months of 1998 were more than 75 percent higher than in 1997. Processed pork exports were up almost 30 percent.
The trend will be more clear by mid summer because Japan usually makes most of its purchases in June and July. The labor dispute at Fletcher’s slaughter plant in Red Deer, Alta., if it drags on, might reduce potential exports.
This demand and a gradual reduction in American hog supplies are expected to improve prices. Agriculture Canada expects prices to rise through summer, see a seasonal fall downturn and then improve into 1999.
It expects the 1999 price average will be about $18 per 100 kilograms better than in 1998.
