Analysis

Hog inventories

Hog inventories on Canadian farms declined 7.3% between the third quarter of 2008 and the third quarter of 2009. The main factors in the decline were low market prices, the restructuring of farms and farm closures.

As of October 1, 2009, Canadian farmers had an estimated 11.8 million hogs on their farms. This is down from 12.7 million on the same date last year and down from 14.4 million two years ago. At the same time, the number of farms with hog operations declined from 8,500 to 7,700.

The number of sows reported on farms reached 1.3 million, down 4.4% from October 1, 2008. While the United States is still experiencing efficiency gains in hog production, Canada’s investment in hog production has remained stagnant. Combined Canada and US breeding herd inventories continue their decline by 3.5% last year and another 3.4% this year. The US breeding herd accounts for more than 80.0% of the North American breeding stock.

The number of sows anticipated to farrow is expected to continue declining, according to industry. Sows expected to farrow in Canada during the fourth quarter 2009 and the first quarter 2010 are down 6.4% and 3.6% respectively from the same period one year prior. Many hog producers reported in the past survey cycle uncertainty of their farrowings intentions. Several producers reported that they are waiting to see if they can make use of the recently announced federal program to leave production.

On August 15, 2009 the Government of Canada announced a restructuring program for hog producers. It includes creation of a loan loss reserve fund for hog producers, a marketing fund and a transition program to help producers leave the industry.

Domestic slaughter of hogs increased 5.9% during the third quarter of 2009 as slaughter capacity improved in some regions.

Hog producers exported an estimated 1.6 million hogs during the third quarter of 2009. Year to date exports total 5.0 million head and are down 31.5% from the same period in 2008.