CNS Canada — Improving trade relations and the emergence of swine fever in China have made their presence felt on the Canadian hog market.
Weekly signature No. 5 base slaughter weight cash hog prices averaged $117.83 per 100 kg as of Friday, up by roughly $15 over the past two weeks.
Those numbers are a stark departure from the previous month, according to provincial livestock economist Brad Marceniuk in Saskatoon. “During the month of August we saw a big drop in hog slaughter prices, down 35 per cent or more.”
China and Mexico’s decisions to slap tariffs on imports of pork from the U.S. weighed down Canadian prices in August, he added.
Mexico announced it would lower its penalties after it reached a deal with the U.S. over the North American Free Trade Agreement.
“So there’s a variety of reasons, but some of the trade issues are starting to wane,” he said.
As well, the emergence of African swine fever in China has led to ideas that country may be forced to import more pork than it normally does.
“China produces 50 per cent of the pork in the world,” he said.
Chinese pork imports typically tend to be inconsistent, he said, but there are fears the current outbreak could get worse, which is one reason why prices are on the rise.
“Prices are still very weak overall but stronger than they were two weeks ago,” he explained.
Another factor impacting the market is the increasing spread between the wholesale pork cutout value and the cash price paid for hogs.
“We may continue to see some rebounds but I think prices will remain weak in the fourth quarter and likely below production costs,” he said.
— Dave Sims writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.