SASKATOON — Hog prices appear to be entering the high part of their four-year cycle and that bodes well for 1994 prices.
Jim Morris, manager of SPI Marketing in Saskatoon, predicted Index 100 hog prices will average $154.50 per hundred kilograms in 1994, compared to an average of $146.22 in 1993 and $125.22 in 1992.
Low feed costs, a weaker dollar, a narrow Canada-U.S. price spread and a narrow Eastern-Western Canada price spread all characterized 1993. These factors will be working in 1994 prices, Morris said.
“In January, we’re already back to $1.55,” Morris said in his analysis of the hog market during the broadcast of Market Prospects ’94. “The early price depression is over. We’re going to have a positive year in 1994.”
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Saskatchewan’s biggest constraint is the number of hogs it isn’t producing. At one million hogs, compared to North American production of 130 million, Saskatchewan is an insignificant region, Morris said, adding just that day he had to turn down an offer to buy six truckloads because of lack of supply.
“We’re not growing fast enough to take advantage of the opportunities.”
Among the factors that will affect the market in the coming year are changes in the grading grid, the end of the national tripartite stabilization program and the end of the feed grains adjustment programs in both Saskatchewan and Alberta.
Internationally, Morris said the settling of the current round of the world trade talks may open up some markets for Canadian hogs in Japan and particularly Europe.
Mexico, too, holds some promise, with per capita consumption of pork predicted to go up by five kilograms in six years.
“Mexico is as close to us by truck as Toronto.”
Morris predicted average prices for Index 100 hogs of $1.45 per ckg in quarter one; $1.55 in quarter two; $1.65 in quarter three and $1.53 in quarter four.
