Farmscape for June 13, 2005 (Episode 1832) Sask Pork expects the global demand for pork and US slaughter numbers to be the primary factors that will drive North American live hog prices over the rest of the second quarter and throughout the third quarter of 2005. Hog Prices in North American have been trending downward the during past month, dropping 15 to 20 percent. Currently SPI index 100 hogs are ranging from 129 to 139 dollars per 100 kilograms. Sask Pork Industry and Policy Analyst Brad Marceniuk points out this is running contrary to the normal trend for this time of year, which would typically see prices strengthening during the spring and summer. Clip-Brad Marceniuk-Sask Pork With the United States slaughter numbers only up about one percent from 2004, the main driving factor behind the reduction in hog prices is believed to be a reduction in the demand for pork. United States pork stocks in cold storage have increased by almost 26 percent over the last year and are up 13 percent over the last three months. The pork cutout value in the United States has dropped by 15 percent over the last three weeks with pork bellies dropping almost 30 percent. These are leading indicators of reduced demand for pork. The two main factors that will affect hog prices this summer will be the demand for pork and the number of hogs slaughtered in the United States. If the demand for pork rebounds we could see a rally in hog prices. If the number of hogs slaughtered decreases in the US, reducing the supply of pork, hog prices would also rebound. In Canada, the Canadian exchange rate has been relatively stable over the last two to three weeks and is not expected to be a major factor. Marceniuk says, with the removal of the dumping duty on live Canadian hog exports to the US, we have seen some increase in feeder hog exports but exports are not expected to sustain the pre-duty numbers. Based on the lean hog futures, he estimates Saskatchewan index 100 hogs will average 135 to 145 dollars per 100 kilograms for the remainder of the second quarter of 2005 and 130 to 140 dollars for the third quarter. For Farmscape.Ca, I'm Bruce Cochrane. *Farmscape is a presentation of Sask Pork and Manitoba Pork Council |