By Bruce Cochrane
The manager of industry and policy analysis with Sask Pork expects the current strong market for live hogs to fuel renewed interest in building new feeder barns in Saskatchewan.
North American pork producers have seen record live hog prices this summer fuelled primarily by reduced production in the U.S. due to Porcine Epidemic Diarrhea, and although Russia's announcement that it's responding to new sanctions imposed over the crisis in Ukraine by banning a range of food imports from Canada, the U.S., the European Union, Australia and Norway including pork has impacted prices, markets remain strong.
Mark Ferguson, the manager of industry and policy analysis with the Saskatchewan Pork Development Board says, while everybody's cost of production is a little different, profitability is currently running somewhere between $70 and $90 a hog and for the entire year we'll probably be looking at a profit of over $50 a hog.
Mark Ferguson-Saskatchewan Pork Development Board:
Despite the profitability in the industry Canadian slaughter plants are operating below maximum capacity so more market hog production is required to fill those plants and we would expect to see more interest in investing in the industry again and building feeder barns if this level of profitability continues and we sure hope it does.
We're going to have to keep an eye on the PED virus in the U.S.
That's one of the main reasons we've got these excellent prices right now, the fact that the number of hogs slaughtered in North America is down so much from last year and total production is down so, depending on how that virus affects the industry this winter, that will have a big impact on prices.
Ferguson says producers should be able to hedge profits through the winter and he encourages everyone to try to lock in something that works.
Source: Farmscape