Lower Live Hog Prices Temper Thoughts of Expanding North American Hog Production

Apr 01, 2015

By Bruce Cochrane

A swine specialist with Alberta Agriculture and Rural Development says the recent slide in live hog prices appears to have tempered any plans to expand North American hog production.

The USDA's Quarterly Hogs and Pigs report, which was released Friday, shows we're going to see considerably more pork production this year than in 2014 when U.S. swine herds were devastated by Porcine Epidemic Diarrhea but the numbers are still lower than industry expectations.

Ron Gietz, a business development specialist pork with Alberta Agriculture and Rural Development, says markets have come down dramatically from the extreme highs we saw in 2014 prompting producers to rethink any plans for expansion.

Ron Gietz-Alberta Agriculture and Rural Development:
In the U.S. they were fairly aggressive on expansion.
They took the breeding herd up by about 43,000 sows over the last quarter so there's some expansion dialed in in the U.S. but this seems to have curbed that in combination with the lower markets.

Most of the industry would be in a loss position at this time with the downward trend in markets so far in 2015 so that's kind of taking out the enthusiasm for expansion at this time so it's not necessarily going to go away all together but we saw the breeding herd up 2 percent as of March 1, 2.2 percent and the traders had expected a 3.5 percent increase so that shows you how the expansion is starting to be reined in.

In terms of Canada we're basically flat, maybe at the most a 1 percent expansion would be going on on this side of the border, certainly quite a bit more conservative.

Gietz says the Hogs and Pigs Report suggests that we may have reached the low point in the price cycle and we can look forward to at least slightly better times moving into the summer months.

Source: Farmscape

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