March 3, 2010

This information is provided as a resource by Saskatchewan Agriculture staff.
All prices are in Canadian dollars unless otherwise noted.
Please use this information at your own risk.

North American daily average hog prices (carcass  Iowa/Minnesota.) declined early in February before rebounding with stronger prices over the last week.  Average daily Iowa prices in February ranged between US$62.26 and $69.98 per hundredweight (cwt).  The Iowa/Minnesota carcass price on Tuesday, March 2, averaged US$70.13 per cwt, which is equivalent to just over CDN$150 per ckg.  The price of Saskatchewan SPI Index 100 hogs on March 3 ranged from $128 to $138 per ckg, with last week's weekly pool price being $129.20 per ckg.  The recent rally in the value of the Canadian dollar, which closed yesterday at 96.48 cents was negative on Canadian hog market prices.

United States Hog Slaughter

The number of hogs slaughtered under federal inspection in the U.S. for the week ending Feb. 27, 2010, was estimated at 2.163-million head, down 0.7 per cent from

2.179-million head over the same period a year ago.  Slaughter numbers in the U.S. over the last eight weeks averaged an estimated 2.152-million head per week, down 4.5 per cent from 2.254-million head over the same period a year ago (Table#1).  U.S. hog slaughter numbers over the last four weeks averaged an estimated 2.156-million head, down 2.4 per cent from 2.210-million head over the same period in 2009.  

Table 1: United States Weekly Hog Slaughter

Source: USDA, LMIC

U.S. pork production over the last eight weeks averaged an estimated 436-million pounds (lb.) per week, down 5.2 per cent from 460-million lb. the same period a year ago, while pork production over the last four weeks averaged 436-million lb., down about 3.3 per cent from about 451-million lb. the same period a year ago.

Canadian Hog Slaughter

In Canada, federal and provincial hog slaughter numbers over the seven weeks ending Feb. 20, 2010, averaged 440,389 head, up 0.84 per cent from 436,707 head for the seven weeks ending Feb. 21, 2009.  In Western Canada, federal and provincial hog slaughter numbers for the seven weeks ending Feb. 20, 2010, averaged 172,123 head, up 7.70 per cent from 159,811 head for the seven weeks ending Feb. 21, 2009. 

Canadian Live Hog Exports

Based on United States Department of Agriculture (USDA) APHIS data, Canadian weanling and feeder hog exports to the U.S. averaged 98,992 head per week over the six weeks ending Feb. 13, 2010, down 4.2 per cent or 4,382 head compared to 103,374 head per week over the six weeks ending Feb. 14, 2009.  According to Statistics Canada data, total Canadian weanling and feeder hog exports in 2009 which were virtually all to the U.S., were 5.222-million head, down 25.9 per cent from 7.036-million head in 2008.

Canadian slaughter-weight hog exports to the U.S. averaged 23,024 head per week over the six weeks ending Feb. 13, 2010, down 14.6 per cent from 26,967 head per week over the six weeks ending Feb. 14, 2009.  According to Statistics Canada data, Canadian slaughter-weight hog exports in 2009 which were almost all to the U.S. were 1.143-million head, down 50.5 per cent from 2.308-million head in 2008.

Canadian Hog Production

In Statistics Canada's February Canadian hog inventory report, total inventory of hogs in Canada for Jan. 1, 2010, was estimated at 11.630-million head, down 4.5 per cent, or 550,000 head from 12.180-million head on Jan. 1, 2009, and down 1.5 per cent from 11.180-million head on Oct. 1, 2009.  Total Canadian hog inventory has declined by 3.575-million head or 23.5 per cent since peaking at 15.205-million head on Oct. 1, 2005.

The Canadian market herd inventory on Jan. 1, 2010, was estimated at 10.295-million head, down 4.5 per cent, or 490,000 head from 10.785-million head on Jan. 1, 2009, and down 1.6 per cent from 10.460-million head on Oct. 1, 2009.  The Canadian market herd has declined by 3.291-million head or 24.2 per cent since peaking at 13.586- million head on Oct. 1, 2005.  In Western Canada, the market herd inventory on Jan. 1, 2010, was 4.250-million head, down 3.2 per cent from 4.391-million head on Jan. 1, 2009, but up slightly from 4.231-million head on Oct. 1, 2009. 

The Canadian breeding herd, consisting of sows and bred gilts, was estimated at 1.313- million head on Jan. 1, 2010, down 4.3 per cent from 1.371-million head on Jan. 1, 2009, and down 1.1 per cent from 1.327-million head on Oct. 1, 2009.  In Western Canada, the breeding herd of sows and bred gilts was estimated at 574,800 head on Jan. 1, 2010, down 6.0 per cent from 611,500 head on Jan. 1, 2009, and down 0.9 per cent from 579,800 head on Oct. 1, 2009.  The Canadian breeding herd will continue to decline into 2010 with the last Hog Farm Transition Program bid held in January 2010.  The Canadian breeding herd has declined by 284,500 head or 17.8 per cent since peaking at 1.597 million head on January 1, 2005.

In Saskatchewan, total hog inventory as of Jan. 1, 2010, was estimated at 780,000 head, down 3.7 per cent from 810,000 head a year ago, and down 624,000 head or 44.4 per cent from the peak in Oct. 2005.  The sow and bred gilt inventory as of Jan. 1, 2010, was 87,900 head, down 11.2 per cent from 99,000 head from a year ago, and down 43,300 head or 33.0 per cent from the peak in July 2005.  Market inventory numbers as of Jan. 1, 2010, were 689,300 head, down 2.6 per cent from a year ago, and down 580,800 head or 45.7 per cent from the peak in Oct. 2005.

According to Statistics Canada data, total Canadian farrowing numbers for the third and fourth quarters of 2009 were 728,900 head, down 5.7 per cent from third quarter 2008, and 724,600 head during the fourth quarter of 2009, down 7.9 per cent from the fourth quarter 2008.  Total farrowings in 2009 were estimated at 2.947-million head, down 6.7 per cent from 3.159-million head in 2008.  Farrowing intentions for the first quarter of 2010 are estimated to be 722,200 head, down 4.5 per cent, while farrowing intentions for the second quarter of 2010 are estimated to be 713,900 head, down 3.2 per cent from the second quarter 2009 (Table#2).

The total number of pigs born in Canada during the third and fourth quarters of 2009 was estimated at 15.658-million head, down 6.6 per cent or just over 1.1-million pigs from 16.762-million head during the third and fourth quarters of 2008.  Based on Statistics Canada data, total hog marketing's in Canada in 2009 are estimated at 28.2-million head, down 2.85-million head or 9.2 per cent from 31-million head in 2008.  

Table 2: Sows Farrowing and Pigs Born, Canada (thousand head)

(1) Estimated farrowing intentions
     Source: Statistics Canada, February 2010

In Western Canada, farrowing numbers were estimated at 337,000 head during the third quarter and 337,000 head during the fourth quarter of 2009, down 8.4 per cent and 8.1 per cent, respectively, compared to the same quarters in 2008.  Total farrowings for Western Canada in 2009 were estimated at 1.378-million head, down 9.5 per cent from 1.522-million head in 2008.  Farrowing intentions for the first and second quarters of 2010 are estimated at 337,000 head and 335,700 head, down 4.8 per cent and 4.1 per cent, respectively, from the same quarters a year ago (Table#3).

The total number of pigs born in Western Canada during the third and fourth quarters of 2009 was 7,491,000, down 635,500 head or 7.8 per cent from 8,126,500 head born during the same quarters in 2008.  Total pigs born in Western Canada in 2009 was estimated at 15.335-million head, down 1.474-million head or 8.8 per cent from

16.809-million head in 2008.  Based on Statistics Canada data, total hog marketing's in Western Canada for 2009 are estimated at just under 13.6-million head, down almost two-million head or 12.7 per cent from 15.5-million head in 2008. 

Table 3: Sows Farrowing and Pigs Born, Western Canada

(1) Estimated farrowing intentions
     Source: Statistics Canada, February 2010

Meat in cold storage

The United States' pork stocks in cold storage totaled 495.6-million lb. on Jan. 31, 2010, up 5.2 per cent from 471.1-million lb. on Dec. 31, 2009, but down 18.3 per cent from 606.9-million lb. on Jan. 31, 2009.  Increases in storage month over month have come primarily from hams and butts.

Table 4: United States Stocks in Cold Storage (Frozen)

Source: NASS

The U.S. beef stocks in cold storage totaled 432.8-million lb. on Jan. 31, 2010, up 0.6 per cent from 430.3-million lb. on Dec. 31, 2009, but down 6.4 per cent from 462.6-million lb. on Jan. 31, 2009.

The U.S. poultry stocks in cold storage totaled 927.9-million lb. on Jan. 31, 2010, up 3.2 per cent from 898.7-million lb. on Dec. 31, 2009, but down 18.9 per cent from 1,144.0-million lb. on Jan. 31, 2009. 

U.S. combined pork, beef, chicken, turkey and duck stocks in cold storage totaled 1.856-billion lb. on Jan. 31, 2010, up 3.1 per cent from 1.800-billion lb. on Dec. 31, 2009, but down 16.1 per cent from 2.214-billion lb. on Jan. 31, 2009 (Table#4). 

Pork cutout values (All prices in U.S. dollars)

The pork cutout value (185 lb.) in the U.S. ended the week of Feb. 27, 2010, averaging $72.16 per cwt, up $2.92 per cwt or 4.2 per cent from $69.24 per cwt the previous week, and up $15.85 per cwt or 28.1 per cent from $56.31 per cwt a year ago.  Hams (51 to 52 per cent lean) ended the week averaging $68.55 per cwt, up $4.70 per cwt or 7.4 per cent from $63.85 per cwt the previous week, and up $27.84 per cwt or 68.4 per cent from $40.71 per cwt a year ago.  Loins (51 to 52 per cent lean) averaged $83.52 per cwt, up $4.02 per cwt or 5.1 per cent from $79.50 per cwt the previous week, and up $12.16 per cwt or 17.0 per cent from $71.36 per cwt a year ago.  Bellies (51 to 52 per cent lean) closed the week averaging $87.45 per cwt, up slightly from $87.20 per cwt the previous week, but up $16.09 per cwt or 22.5 per cent from $71.36 per cwt a year ago (Table#5). Overall, pork cutouts were up for the week.

Table 5: U.S. Weekly Pork Price Summary (Weekly Average)

Source: Livestock Marketing Information Center

Market Overview and Prices 

North American daily cash hog prices (Iowa/Minnesota) had declined late January/early February before rebounding strongly over the last week.  Pork cutout values had declined below US$70/cwt early in February before increasing to more than US$73/cwt over the last few days.  The amount of pork in U.S. cold storage has increased 5.2 per cent from December/January, but is 18.3 per cent lower year-over-year.  Pork stocks were below 500-million lb. for the third consecutive month, only the third month in two years.  U.S. pork exports had rebounded late in 2009 with December 2009 pork exports up 7.8 per cent from December 2008 pork exports, by quantity.  Total meat in U.S. cold storage has increased by 3.1 per cent from December to January, while total meat supplies were more than 357-million lb. or 16.1 per cent lower than a year ago.  Total meat supplies were below two-billion lb. for the third consecutive month, and only the third month in two years.

The nearby lean hog futures prices had peaked in mid January, declined late January/early February, but have been trending upward since mid-February and were stronger the last two weeks.  The nearby months (April to June) have increased by over $6 per cwt since the low in early February, while the July lean hogs future contract has increased by well over US$7/cwt.  On the negative side, the Canadian dollar has rebounded over the last week and is back in the mid 96 cent range, which is negative for Canadian hog prices.  Cash hog prices for Canadian hog producers are still expected to trend upwards into spring and summer but will continue to be affected by swings in the value of the Canadian dollar. 

Based on the current lean hog futures prices and the Canadian exchange rate futures, the futures market is indicating that Saskatchewan Index 100 hogs could average between $143 to $148 per ckg in the second quarter of 2010, and average between $138 to $143 per ckg in the third quarter 2010.  Fluctuations in the value of the Canadian dollar over the coming months can have a significant effect on Canadian hog prices going into spring/summer.

North American pork exports will need to continue improving and U.S. hog slaughter numbers will need to continue declining to improve cash hog prices into spring and summer.  Reduced weekly U.S. hog slaughter numbers into spring and summer could be the main factor affecting hog prices unless there is a big change in demand, particularly exports.

For more information, contact the Livestock Branch:
Brad Marceniuk, PAg, BSA, MSc
Livestock Economist
933-5098
Brad.Marceniuk@gov.sk.ca