Glacier FarmMedia COVID-19 & the Farm

Hog inventory down from last year: StatsCan

(Resource News International) — Canada’s hog inventories as of Oct.
1 totalled 12.795 million head, down from 14.36 million
at the same time a year ago and lower than the 12.985 million
during the quarter ended July 1, figures released by Statistics
Canada revealed.

The government agency said the decline in hog numbers has
been ongoing for the past three years and reflects rising input
costs for feed and declining hog prices which have cut into
profit margins for producers.

Although hog inventories had levelled off at the beginning
of 2008, they continued to decline slightly over the past two
quarters, Statistics Canada said. Uncertainty surrounding the U.S.
country-of-origin labelling (COOL) rules, which came into effect
on Sept. 30 and the Manitoba hog moratorium
legislation, were major events that occurred during the third
quarter. For the most part, producers are waiting to see how
buyers and markets in North America will react to the new
labelling rules.

The government agency also noted that several hundred
operations also took advantage of the Federal Cull Breeding Swine
program to scale down their breeding herd over the last few
quarters.

The national breeding herd is down over eight per cent from last year.
Registrations from the cull program indicate that
124,000 breeding animals have been taken out of the herd since
Nov. 1, 2007. Under this federal program, the registered
barns must remain out of production for at least three years.

StatsCan said the breeding herd is declining at a
lower pace in the West, which may explain why the area continues
to increase its share of the national breeding herd. Hog
production per sow continues to be higher in the West as opposed
to the East, with new technology and farm management
improvements. Within the last decade, sows increased by two per cent in the
East compared with 21 per cent in the West.

For the last two quarters, hog exports continue to stand at
about 2.1 million head. Year-to-date exports for January to
September 2008 are up by 0.9 per cent from last year, while domestic hog
slaughter reported a marginal decline of 0.1 per cent from a year ago,
the government agency said.

Statistics Canada also noted that Canadian hog producers
have had to cope with very narrow or even negative profit margins
in the past several years. The hog price cycle has traditionally
been described as a three year cycle. However, the prices paid to
producers for slaughter hogs have remained low beyond this time
frame. The increased price of coarse grains which are used in
feed, and which normally account for almost half of the hog farm
operating expenses, has reduced profit margins. In 2008, the
average price received by hog producers was 21.7 per cent below the price
for the first half of 2007, as robust U.S. hog production and the
higher Canadian dollar continued to apply downward pressure on
prices.

Financial pressures, the Canadian currency overtaking the U.S.
dollar, the hog moratorium, the U.S. COOL legislation and uncertainty over market conditions have created a changing
environment for the Canadian hog producer, Statistics Canada
said. Structural changes, barn and farm closures have taken place
in the hog industry, as almost 16 per cent of Canadian hog producers left
the industry since October 2007. Among all hog farms, regardless
of size or degree of efficiency, the most financially vulnerable
have been at risk, the government agency said.

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