This week the Western Producer introduces a feature designed to help producers keep abreast of the hog market. This column by David Kraut, called Pig Tales, will appear after each quarterly Statistics Canada hog inventory report and U.S. Department of Agriculture hogs and pigs report. Kraut has been the head of marketing and risk management at Elite Swine’s producer services arm for eight years.
The Statistics Canada April 1 hog inventory report indicates that the number of heavier hogs is down in Canada and slaughter in the second quarter will likely drop 8.3 percent from last year at the same time.
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It also shows that Eastern Canada has been liquidating the sow herd since 2005 while the western Canadian sow herd is in a holding pattern.
Total hog inventory on Canadian farms as of April 1 was 14.1 million, down 3.1 percent from spring 2006.
Hog inventories dropped 2.9 percent in Western Canada to 6.3 million and dropped 3.3 percent to 7.9 million head in Eastern Canada.
Canada-wide the breeding herd was down 1.6 percent.
A regional breakdown shows Eastern Canada’s breeding herd dropped 2.9 percent to 861,000 sows while the West was steady at 751,000.
Alberta lost 4,800 sows, or 2.2 percent, Saskatchewan gained 2,400 sows, or 1.8 percent, and Manitoba gained 2,600 sows, or 0.7 percent.
Ontario lost 9,600 sows, or 2.2 percent and Quebec lost 14,900 sows, or 3.6 percent.
The inventory of grow-finish hogs heavier than 20 kilograms fell 7.5 percent in Ontario and 5.37 percent in Quebec. This indicates there will be a reduction of about 18,000 market hogs per week in eastern Canadian slaughter over the next three to four months.
In Manitoba, grower-finisher inventories fell 9.65 percent. Saskatchewan was down 4.67 percent and Alberta dropped 3.2 percent, suggesting western Canadian slaughter numbers may drop about 14,000 per week over the same period.
The report said pigs lighter than 20 kg in Western Canada rose 3.4 percent. In Eastern Canada, the same class rose two percent.
Statistics Canada co-operates with the U.S. Department of Agriculture to produce a North American hog inventory report that was released at the same time.
The combined Canada-U.S. report showed the inventory of all hogs and pigs for March in the two countries was 75.2 million head, up only slightly from March 2006.
The combined breeding herd was 7.69 million sows, unchanged from the previous quarter and the same quarter in 2006. The pig crop was 34.3 million head, up one percent from March 1, 2006.
An analysis of the North American slaughter hog supply shows it will be virtually unchanged from 2006 totals, a combination of a sharp decline in Canada and modest increase in the United States.
The survey results suggest that Canadian slaughter in the April to June quarter may be down 32,000 head per week or 8.3 percent from the 383,000 slaughtered each week in the second quarter of 2006.
Canadian slaughter to April 14 has been about 398,000 per week, down 3.2 percent or 13,000 per week from 2006.
U.S. slaughter will likely rise about two percent, or 33,000 per week, over the 2006 second quarter.
Canadian pork production began to gradually increase in 1994 and started growing quickly in 1997. Production peaked in 2005 and has been declining since.
The graph called Loonie pressures hog inventories shows historical Canadian live hog inventories as a percentage of January 2000 levels.
In January 2000, Canada had 1.345 million sows, 3.91 million pigs lighter than 20 kg and 7.64 million grow-finish hogs.
The April 2007 inventory was 1.61 million sows, 4.52 million pigs lighter than 20 kg and 7.98 million grow-finish hogs.
Despite the recent downtrend, the sow herd has grown 20 percent over the last seven years, the lighter than 20 kg category increased 16 percent and the grow-finish category rose four percent.
Grow-finish inventories started to drop after October 2002, but pork production has not fallen because hogs are being fed to a larger size. Weights have increased more than four kg, or 3.6 percent, since 2002 to 113 kg from about 109 kg live.
Regionally, Western Canada’s April 1 inventory was 750,900 sows, up 31 percent from 2000, 2.04 million pigs lighter than 20 kg, an increase of 28 percent, and 3.46 million grow-finish hogs, up 16 percent.
Eastern Canada’s inventory on April 1 was 861,400 sows, up 11 percent from 2000, 2.48 million lighter-than-20-kg pigs, up seven percent, and 4.51 million grow-finish hogs, down three percent.
The Statistics Canada survey shows finishing production is declining sharply, particularly in Eastern Canada.
Liquidation is never a positive development for those selling and this year it is Canadian producers.
However, the long-term picture is promising.
North American population and pork exports continue to grow while supply is essentially static. Supply of competing meats is moderate and they also enjoy strong export trade prospects.
