End of US Ban on Canadian Cattle Expected to Benefit Canadian Hog Prices

Farmscape for January 10, 2005  (Episode 1687)

 

Sask Pork predicts the planned reopening of the US border to the movement of live Canadian cattle will be positive for all sectors of the livestock industry.

North American hog prices have started to rebound after dropping over 25 percent in December as a result of seasonal weakness.

Sask Pork Industry and Policy Analyst Brad Marceniuk says several factors will play a role in the direction of live hog prices in the first half of this year.

 

Clip-Brad Marceniuk-Sask Pork

Some of the main factors that will influence where Canadian hog prices will go in 2005 will include global demand for pork, US slaughter numbers, the Canadian dollar and the basis between US and Canadian and hog markets.

A final decision will be made in March regarding the dumping duty on live Canadian hogs entering the US and this will potentially change the current basis between Canadian and US hogs.

A recent announcement by the USDA will allow live Canadian cattle under 30 months of age into the US starting on March 7, 2005.

This will be positive for the livestock industry as a whole.

We should see improved Canadian cattle prices, a reduction in beef surplus and this should also be positive for the domestic pork demand.

In the short term no significant change in pork prices from increased cattle trade is anticipated.

With anticipated continued strong demand for pork and no major changes in US slaughter numbers in the first half of 2005, hog prices are expected to be strong in the first half of 2005.

Based on lean hog futures, Saskatchewan index 100 hogs are estimated to average about 145 to 155 dollars per 100 kilograms in the first quarter of 2005 and 150 to 160 dollars per 100 kilograms in the second quarter of 2005.

 

Marceniuk says, because it'll take some time to reestablish the movement of live Canadian cattle, the initial impact of the border reopening will be minimal but the impact will gradually build.

For Farmscape.Ca, I'm Bruce Cochrane.

 

       *Farmscape is a presentation of Sask Pork and Manitoba Pork Council