Hog losses escalate

After years of money-losing hog prices, prices have gone even lower. Livestock economist Brad Marceniuk of the Saskatchewan Ministry of Agriculture reports that North American daily average hog prices have declined by more than 15 per cent over the last two weeks. He cites continued high U.S. pork production and weaker pork exports due to H1N1 concerns as the main reasons. At the current Saskatchewan Index 100 price of around $100 per 100 kilograms, losses are huge. Producers in Western Canada are losing an estimated $45 to $55 on each slaughter weight hog they sell. Marceniuk says that based on the current lean hog futures prices and the Canadian exchange rate futures, Saskatchewan Index 100 hogs could decline further in the fourth quarter of this year, dropping to around $80 or $90 per ckg. For the first quarter of 2010, the price projection is for only a slight improvement. It’s amazing that there are any hog producers left. If the losses continue, you have to think that only the large, vertically integrated companies are going to survive. I’m Kevin Hursh.

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Kevin Hursh, PAg, CAC