Articles in this document:
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Lower
Dollar, Lower Feed Costs Improve Canadian Swine Industry Outlook
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Lower
Canadian Dollar Improves Picture for Western Canada’s Pork Industry
Lower Dollar, Lower
Feed Costs Improve Canadian Swine Industry Outlook
Brad Magnusson - Credit Union Central of
Farmscape for November 17, 2008 (Episode 3018)
An agriculture consultant with Credit Union Central of
Manitoba says the lower value of the Canadian dollar and reduced feed costs
have been key to improving the situation for western
Canadian swine producers.
Live hog prices are projected to bottom out in western
Brad Magnusson, with Credit Union Central in Winnipeg, says
the combination of rising feed costs, a par Canadian dollar, the fallout from
U.S. Country of Origin Labelling and record U.S.
weekly hog slaughter numbers has squeezed cash flows and caused a huge cash
crunch for the swine industry.
The drop of the Canadian dollar is tremendously important as
we export a tremendous amount of both live and meat products to the
Anytime that the dollar is going to be falling is going to
be positive.
We are conscious of the fact though that we are an oil
producing nation and we could ultimately see that Canadian dollar move back up
slightly over time.
That's something to consider but it's absolutely paramount
that the dollar stays as low as possible as an exporting meat nation.
From a feed perspective absolutely
incredibly important as well.
The feed costs doubling essentially in a very short period
of time absolutely was devastating to individual producers, particularly if
they were buying corn out of the United States or even barley.
You can't make profitability when corn is at eight dollars
and barley is at 4.50 or five dollars.
Magnusson stresses Credit Union Central of Manitoba believes
the hog industry is still very stable in
He notes we have a tremendous number of producers with
equity in their operations and in western
For Farmscape.Ca, I'm Bruce Cochrane.
*Farmscape is a presentation of Sask Pork and Manitoba Pork Council
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Lower Canadian Dollar
Improves Picture for
Farmscape Staff
Farmscape Article 3017 November 16, 2008
North American slaughter numbers,
Hog market Update Shows Price Decline
The Saskatchewan Ministry of Agriculture’s November Hog Market Update shows North American hog prices have continued their decline as we move through the fourth quarter.
Livestock economist Brad Marceniuk
explains, “
However, he notes, “While slaughter numbers were higher, we have actually started to see some signs in recent weeks that U.S. slaughter numbers may be levelling off and could start to decline later in the fourth quarter.”
At the same time, “In Canada weekly hog slaughter numbers have been increasing over the last few weeks compared to the same period a year ago. A combination of more hogs staying at home due to COOL (U.S. Country of Origin Labelling) and a decline in the value of the Canadian dollar making Canadian processors more competitive have helped increase slaughter numbers in Canada.”
Lower Canadian Dollar Eases Losses
Current prices [106 to 116 per 100 kilograms Thursday November 13] are well below current production costs, Marceniuk states.
However, he stresses, while Canadian hog prices have been
declining, the drop in the value of the Canadian dollar over the last two
months has tempered that decline so Canadian producers probably haven’t felt
the impact as much as
Losses Blamed on Several Factors
Brad Magnusson, an agriculture consultant with Credit Union Central of Manitoba blames the losses on a combination of factors, most notably high feed costs in early 2008.
“With corn rallying from some $4.00 a bushel in the fall of 2007 up to as high as $8.00 in the central United States, that’s pushed up our feed costs tremendously.”
He says the virtual doubling of feed costs in a very short
period of time was devastating to individual producers, particularly if they
were buying corn out of the
“You can’t make profitability when corn is at $8.00 and barley is at $4.50 or $5.00.”
He acknowledges, while the cost of corn and barley have been coming down easing the situation, the result has been a huge pressure squeeze on cash flows.
As well, Magnusson recalls, the improving Canadian dollar
over the last several years caused a huge cash crunch for the swine industry
while Country of Origin Labelling is causing
difficulty now for swine producers in western
Marceniuk adds, “With increasing
Pork in cold storage is up close to five percent from a year ago. Beef is down from a year ago. Chicken stocks and turkey stocks are up significantly from a year ago.
“Overall we’ve seen more meat production in the
“Also too, if we were to add insult to injury we’ve had a very large kill especially in the fall of 2008 in the United States and that has also brought commodity prices down,” Magnusson observes.
Increased Live Hog Prices Projected
Marceniuk expects live hog prices
to bottom out later in the fourth quarter as
“Prices should start to rise later in the fourth quarter and
into the first quarter of 2009 as
Value of Canadian Dollar Expected to be Key
Marceniuk concedes, fluctuations in the value of the Canadian dollar could significantly impact prices into 2009.
Magnusson agrees, “The drop of the Canadian dollar is
tremendously important as we export a tremendous amount of both live and meat
products to the
However, he cautions, “We are conscious of the fact though that we are an oil producing nation and we could ultimately see the Canadian dollar move back up slightly over time. That’s something to consider but it’s absolutely paramount that that dollar stays as low as possible as a meat exporting nation.”
Lower Canadian Dollar Widely Welcomed
Bob Mazur, the president of the Brandon based Mazur Group, a network of farm equipment dealerships, admits, with the U.S. economy in the state it is he finds it hard to understand the drop in the Canadian dollar but he welcomes it.
“Our dollar going down against the U.S. dollar really, in a
lot of ways, is very good news for our producers and for the agriculture
community in
He is confident the price of our commodities will rebound from the lack of participation in the commodity markets, particularly for the livestock sector, because of the dollar.
He acknowledges the concerns related to COOL but he believes, “World wide we’re positioned very well to have some pretty reasonable times in the agriculture sector.”
Western Canadian Swine Sector Still Viable
Magnusson notes, “Credit Union Central of Manitoba believes
the hog industry is still very very stable in
“Looking forward,” Marceniuk
concludes, “
Staff Farmscape.Ca
Wonderworks
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