Farmscape for November 9, 2010   (Episode 3453)

The Saskatchewan Ministry of Agriculture reports the biggest factor putting downward pressure on North American live hog prices right now is the seasonal increase in the number of slaughter hogs going to market.

The Saskatchewan Ministry of Agriculture released its November Hog Market update last week.

Livestock economist Brad Marceniuk reports, year over year, breeding numbers and market numbers in Canada and the U.S. are down and combined inventory numbers are down by about two percent but what we've seen in the last few weeks is a build-up of hogs coming to market pushing up slaughter numbers.

Clip-Brad Marceniuk-Saskatchewan Ministry of Agriculture:
Hog prices have declined significantly in October from September.

We've seen a really big drop in prices.

They did recover slightly last week over the last few days as I think overall marketing conditions have improved.

In western Canada depending on the pricing grid, pricing contract used, prices have been in that 1.08 to 1.15 per hundred kilograms for index 100 hogs, so not very strong.

Looking at the factors, the biggest factor has probably been the increase in slaughter numbers going into the markets.

U.S. slaughter numbers over the last three weeks have actually been over 2.3 million head which is basically the highest they've been for a whole year.

Combined with that we've seen reduced pork cutout values.

When you have lower pork cutout values and higher slaughter numbers that really pushes hog prices lower.

Pork cut-outs have declined significantly here in October from September and bottom line is we're seeing weaker demand here this fall versus the summer but it's going to be very important to get export numbers to keep increasing and to be stronger and local demand to increase and be stronger also if we want to get the prices back to where we had this summer.

Marceniuk says exchange rates have significantly influenced Canadian hog prices.

He notes we've seen the Canadian dollar touch par a with the U.S. dollar a few times in the past couple of days and as we get a stronger dollar that negatively affects our Canadian prices as our prices are based on the U.S. market.

For Farmscape.Ca, I'm Bruce Cochrane.

       *Farmscape is a presentation of Sask Pork and Manitoba Pork Council