Meat Industry INSIGHTS Newsletter

980847 Canadian Hog Sector Growth Continues

August 24, 1998

Winnipeg, Canada - Statistics Canada's livestock estimates showed the hog sector continued its long-term expansion, which was fueled by exports of live animals and pork.

“Canadian farmers have been competing aggressively in the U.S. market, taking advantage of economies of scale, abundant feed supplies and the shrinking Canadian dollar,” said the report, based on a telephone survey of 26,000 farm operators as of July 1.

“As of July 1, hog inventories had climbed to a record level of more than 12.0 million head, up 1.0 percent from the same period a year earlier,” the estimates stated.

“The sector has grown steadily for the past six quarters, following a cyclical drop in 1996.”

But it said Canada's cattle herd continued its contraction for the second year, down by 2.9 percent to 14.4 million head from 1997.

“Abundant supplies of beef in North America, declining international exports and weak prices since 1993 have resulted in low profits for cattle producers,” it said, adding despite an improvement 1998/97 prices remain below peaks of 1993.

Demand from U.S. slaughterhouses was cited as the reason for a 28.6 percent increase in live pig exports in the first half of 1998 against the same period last year, reaching 1.9 million head.

“Exports have nearly quadrupled during the 1990s. Live hog exports were worth $445 million in 1997,” the report said.

“Exports are crucial to the expansion of the hog industry because Canadians in general are eating less red meat,” it added.

The U.S. is Canada's largest customer with Japan, Russia and South Korea becoming increasingly important, it said.

The report also said hog producers have become more efficient and have expanded their operations, although low hog prices, which have been falling since last September, were limiting expansion.

“In addition, the abundance of feed grain on the Prairies has provided a comparative advantage fostering the expansion of the hog industry,” it said.

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