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Strong U.S. Dollar Expected to Benefit Canadian Pork Producers

By Bruce Cochrane

The vice president pork analysis with EMI Analytics expects the strength of the U.S. dollar to result in extremely strong live hog prices in Canada heading into 2016.

Despite higher U.S. slaughter numbers resulting from decreased losses from Porcine Epidemic Diarrhea, U.S. pork producers are expected to remain profitable.

Dr. Steve Meyer, the vice president pork analysis with EMI Analytics, predicts Canadian prices are going to be extremely strong, given the strength of the U.S. dollar going into next year.

Dr. Steve Meyer-EMI Analytics:
The dollar, the strength of the U.S. dollar, is certainly hurting us in export markets right now.

We've made everybody more competitive with the strength of the U.S. dollar.

It's strong relative to the euro, it's strong relative to the Canadian dollar, it's extremely strong relative to the Brazilian real, it's even strong relative to the yuan given the devaluation of the yuan last week by China, and so that makes our products more expensive and that's shown up.

We're down about 5 percent on exports so far this year.

I think that number is going to get smaller as we go through the year because we're going to be comparing exports this year to really bad exports last year and so I think we're going to probably end up the year about even with last year.

That's different than we were for about a 10 or 12 year period in the 2000s when we saw very rapid growth of exports.
I think that's encouraging for Canada.

Canada is going to be in a position to sell product to our customers and into the United States at a very competitive price because of this strong dollar and I don't see that ending any time soon.

Dr. Meyer says you hear lots of talk about possible higher interest rates but he doubts that will happen anytime soon.

He says higher interest rates will further strengthen the U.S. dollar, and that's one of the reasons the fed will probably not be making much of a move on interest rates, at least in the foreseeable future.

Source: Farmscape

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