“According to Rabobank’s annual Global Animal Protein Outlook Report, November 2023, the swine breeding herd will continue to contract in North America,” says Ann Boyda, provincial livestock market analyst with the Alberta government. “Productivity gains in terms of piglets per sow per year have seen production sustained, despite herd liquidation. Although some moderation in feed costs is evident, productivity gains have resulted in oversupply in the North American market and is putting pressure on hog prices. 2024 is predicted to be faced with continued challenges against disease and weather, tight margins and uncertain consumer sentiment.”
The Western Hog Exchange’s Weekly Regional Hog Price Report monitors national hog markets and reports that hog margins are weakening across North America. As of December 1, 2023, losses ranged from an estimated $27.81 per hog in Ontario to between $12 and $17 per hog in Manitoba. Alberta margin losses were estimated to be between $20 and $21 per hog for the same period. Quebec margins were estimated at a loss of over $24 per hog.
“In Alberta, Index 100 hog prices have been declining since August 2023. Although a price decline is seasonally expected, in combination with higher production costs, producers have been faced with a narrowing window of opportunity for annual profit. In comparison, the profitability window for 2021 and 2022 was from February to November but in 2023 this window narrowed from June to October.”
The CME Group Lean Hog Futures can provide some insight into 2024. A hog price forecast based on the lean hog futures settlement prices for December 1, 2023, adjusted for exchange rates and United States (U.S.)-Alberta price conversion factor, pegs an average 2024 hog price at $2.07 per kilogram live weight. The conversion factor is determined by the U.S. and Canadian dressing percentages. The forecasted average price for 2024 represents a decline of 8.7% from the average for 2022, but a potential 4.5% increase over the 2023 year-to-date average hog price of $1.99 per kilogram.
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