Weak Canadian Dollar Expected to Maintain Hog Industry Profits

Oct 01, 2015

By Bruce Cochrane

A business development specialist pork with Alberta Agriculture and Rural Development expects the weak Canadian dollar to result in continued profitability with the Canadian hog industry through the winter months.

The U.S. Department of Agriculture released its quarterly Hog and Pigs report last week.

The total number of hogs in the U.S. was up 4 percent to 68.4 million and the number of market hogs was up 4 percent to 62.4 million, the highest numbers on record but the breeding herd was up by only 1 percent.

Ron Gietz, a business development specialist pork with Alberta Agriculture and Rural Development, says, while we do have large total numbers, the growth of the breeding herd is fairly conservative.

Ron Gietz-Alberta Agriculture and Rural Development:
This report was well anticipated.
There's no big surprises in there.
We know we have a lot of supply right now, kind of the post PED increase in numbers but it's also showing, from this point forward, that we're kind of tapering off in our numbers so, with the breeding herd at a fairly modest level and with the farrowing intentions for the next couple of quarters actually below year ago levels, we'll start getting back closer to a steady state on the hog industry.
It's kind of putting that whole PED episode behind us, first the sharp decline and then the subsequent run up in production and now we're kind of leveling off as an industry.

Gietz says Canada didn't feel the impact of the PED virus to the same extent as the U.S. so we never ran up our production to the same extent as occurred in the U.S.

He says, for Canada, the big factor is the weak Canadian dollar and that's been a big benefit for Canadian producers keeping them in a profitable condition while the U.S. is getting close to break even.

Moving through the winter he anticipates the Canadian industry to remain in a generally profitable position and suggests exchange rates will be the factor to be watching.

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