CNSC/Winnipeg – A record week for U.S. slaughterhouses is weighing on hog prices in Canada. According to the USDA, hogs slaughtered under federal inspection for the week ended November 5 were pegged at 2.532 million head, which is an all-time record. That number is also up 7.2 per cent from the 2.362 million head processed a week earlier.
“The Canadian price is based on the U.S. price; adjusted for exchange rate and transportation. That causes our price to crash,” said Brad Marceniuk, a livestock economist with Saskatchewan’s Ministry of Agriculture.
Nearby lean hog futures softened by about US$1 per cwt. Weekly Saskatchewan Signature#5 base slaughter weight cash hog prices averaged $118.48 per ckg, down $1.83 per ckg, according to information supplied by Marceniuk. “We were at a C$1.80 (per 100 kilograms) this summer, now we’re at a C$1.18 to $1.20. So producers are losing money here,” he said.
Last week was so busy that the number of pigs slaughtered technically exceeded what most analysts said was the entire capacity for U.S. hog slaughter facilities.
“U.S. economists say weekly capacity in the U.S. is just over 2.4 million pigs a week. Last week it was over 2.5 million pigs a week,” he said.
He says some pork producers in Canada may have been able to lock in higher prices over the summer but many will likely be forced to take whatever cash price then can get.
“It’s hard to say what they’ll do in the short-term,” he added.
One thing that could support prices is if exports improve dramatically.
However, overall meat production in the U.S. is estimated to be up three per cent in 2016, compared to 2015, Marceniuk noted.
“There’s a bit of a glut of meat in north America which will pressure all the meat commodities — including pork.”