By Bruce Cochrane
The director of risk management with h@ms Marketing Services says the low value of the Canadian dollar, compared to its U.S. counterpart, has been extremely positive for Canadian pork producers.
Higher than anticipated U.S. slaughter numbers have put pressure on the North American market for live hogs.
Tyler Fulton, the director of risk management with h@ms Marketing Services, says, although higher feed costs combined with the typical fall decline in live hog prices could result in some short lived losses for most producers in Canada this fall, Canadian pork producers are generally profitable and next year is already shaping up to be a profitable year.
Tyler Fulton-h@ms Marketing Services:
Canadian producers have benefitted hugely from the exchange rate moving the way that it has.
When the Canadian dollar is weak against the U.S. dollar it effectively inflates the value of the product that they're selling because the price of pigs in Canada is based on a U.S. market.
Alternatively it does mean that they pay a little bit more feed products or feed ingredients that are from, in particular, a U.S. origin but in general it's definitely a positive.
It's probably made the difference between being competitive and profitable here in Canada while U.S. producers have probably been struggling a little bit.
Of course they don't have the same feed price issue quite as much.
The corn crop in the U.S. looks like it's in good shape and so consequently prices have not climbed up as wheat and barley have in western Canada.
Fulton notes improved economic performance in the U.S. has resulted into some better domestic demand for pork and that improved demand has brought some strength to the market.
Source: Farmscape