Hog prices won’t increase significantly until some time in May, depending on American slaughter numbers, predicts one industry observer.
Brad Marceniuk, an economist with Saskatchewan Agriculture, told the Saskatchewan Institute of Agrologists that if U.S. slaughter is reduced, it could result in a significant 15 to 20 percent price increase.
“The general trend indicates decreased farrowing and production for 2003 in the U.S.,” he said.
But first quarter slaughter numbers were instead about 1.9 percent higher than last year.
“A one percent change in slaughter numbers can affect prices seven to 10 percent,” Marceniuk said.
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In Saskatchewan, the average cost of production ranges from $155-$165 per hundred kilograms, but prices range from $111- $121, Marceniuk said April 11.
He forecasts a second quarter price range of $120-$150, $135-$155 in the third quarter and $125- $135 in the fourth quarter.
Marceniuk said there continues to be opportunities in exports.
The United States buys $1.2 billion worth of pork each year, accounting for 56 percent of Canadian sales. It is a long-term stable market but one Canada shouldn’t be so dependent upon, he said.
There is potential in Japan, Mexico, Hong Kong, South Korea and China, as well as Australia and Russia, despite recent import quotas imposed by the latter country.
Canada, and Saskatchewan in particular, could easily expand production to supply a larger export market because it has land.
In the Netherlands, there are 1,440 pigs per sq. kilometre; in Saskatchewan there are seven.
In 2001, Saskatchewan exported $70 million worth of pork to the U.S., which represented 86 percent of exports.
